The Rise of Homeowners Associations: What You Need to Know
When searching for a dream home, many buyers hope to avoid properties governed by a homeowners association (HOA). However, with HOAs on the rise in the US, understanding their inner workings is crucial before making a purchase.
A Growing Trend
According to recent data, nearly three-quarters of surveyed homeowners prefer a community without an HOA. Yet, 70% of new single-family homes are built within HOAs, up from 49% in 2009. Today, HOAs represent about 30% of the US housing stock, housing 75.5 million Americans.
How HOAs Work
Homeowners associations are composed of community residents elected to a board of directors, governing the neighborhood by a set of rules and regulations. Homeowners pay dues to maintain common areas like parks, roads, and community pools. These organizations exist for various property types, from single-family homes to condominiums and cooperatives.
Benefits and Drawbacks
While HOAs provide a financial benefit for local governments, they can be a double-edged sword for homeowners. On one hand, they offer amenities and a sense of community. On the other hand, mandatory membership can come with a hefty price tag, ranging from $100 a year to over $1,000 a month, depending on the community and amenities.
The Cost of HOA Membership
In addition to the initial cost, HOA fees tend to increase over time, rarely decreasing. According to a survey, 51% of current HOA members experienced an increase in their fees, and 65% say price increases happen frequently.
Homeowner Satisfaction
While many Americans are satisfied with their HOA, others have grievances. About 1 in 3 homeowners reported having a negative experience that made them want to move, citing issues with fees and inconsistent rule enforcement.
Things to Consider
If you’re currently in the market for a home, here are a few things to consider:
- Research the HOA’s rules and regulations
- Review the community’s amenities and fees
- Talk to current residents about their experiences
- Weigh the pros and cons of HOA membership
By doing your due diligence, you can make an informed decision about whether an HOA community is right for you.
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