FTHer Series - 7. Homeowners Associations

Homeowners Association are most commonly referred to as HOA's. They are made up of a management company and perhaps a homeowner's committee that is put in charge of a neighborhood of homes, condos or townhomes. These groups of people act as a jury to the fellow homeowners in the and enforces the rules, decides where the money goes, whether to raise the monthly HOA and a bevy of other issues.
However, the purpose of HOA's varies. If you live in a townhome or condo chances are you're HOA pays for the upkeep of common grounds such as a pool, the entrance, the workout room, etc... and might only consist of a management company with no homeowners committee.

Such amenities are sometimes found in single family residences (houses) but more often than not in Southern California you're paying to keep the neighbor uniform. It's you're HOA's job along with maybe a neighborhood committee to enforce the rules of the neighborhood. What might those rules consist of? Here's a small list of some possibilities:

-Color of home
-Parking issues (such as no parking boats/rvs on streets or in driveway)
-Landscaping of front yard
-Whether you can rent your home

Homeowners may worry that their neighborhood could lose value because of the neighbors not keeping their homes up that's when an HOA is great. However other people consider HOA's to be over bearing with unnecessary fees. So what is the going rate for HOA's? They differ from each neighborhood and are monthly fees that can range - from $40 to $300+ a month.

Worried about what HOA you might step into? When you open escrow on your home you will receive the HOA's past meeting notes and their rules and regulations to see what you're paying for and if for some reason you don't like what you see you can cancel escrow and move onto another home. So before you start looking for your first home - make sure you check out the HOA's.