How Do HOAs Work?

When you purchase a home, there's a good chance you'll have to pay a homeowners association fee, especially in gated communities, townhouses, condominiums, and other similar planned neighborhoods. The idea is to keep common areas clean and maintained for the benefit of all, and there's usually an HOA board of directors that is responsible for setting the rules and regulations, and carrying out the provisions of the CCRs--a foundation HOA document naming conditions, covenants and restrictions.
Each HOA is different, but most have the same core elements. Most associations employ a qualified professional property manager which assists the Board. You'll typically pay your HOA fees either monthly, quarterly, or annually, and the amount of those fees are an important factor to consider when you're weighing your options for a new home. Lenders, for instance, will need to know that fee amount as part of your purchase mortgage loan approval.

So what is typically included in your HOA fees?

First, the fun stuff Amenities are typically the big perk of living in a community with an HOA. While you lose out on some of the freedom of living without an HOA, you instead get community amenities like a maintained pool, gym, clubhouse, tennis courts, and other amenities. The HOA fees pay for cleaning and maintenance, so-in theory-you'll always have a clean pool whenever you want to use it.
Protecting the community HOA fees often contribute to insurance for the community amenities, as well as a  reserve fund for unexpected repairs to damaged community property--think damage from weather or accidents. California, for instance, requires a reserve fund which is typically contributed to at the rate of 10% of total annual income (usually the HOA fees paid by owners).
General maintenance Your HOA fees will go toward maintaining the general safety and upkeep of the community. This means things like elevator maintenance for condominiums, trash/recycling services, interior roads and other "common area" features as contained in the HOA documents.
Be active in the association There may be a board of directors voted into office by the owners, who are required by law to do certain things, but homeowners associations exist for the betterment of the entire community, and every voice matters. HOA meetings--and the amenities they support--provide great opportunities to meet your neighbors and make your community a better place.

For additional information on condo buying, go to http://www.juliahuntsman.com/condo-living.html

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