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Considerations when buying a home with an HOA

A homeowner’s association, commonly called an HOA, governs single-family home, condominium and townhome neighborhoods. When you purchase a property in an HOA community, you automatically become a member and must pay dues and abide by the HOA rules.

Review these considerations before putting money down on a home with an HOA.

Review the fees

HOA dues vary significantly by community and might cover a host of different amenities, from snow removal and lawn care to security and recreation areas. Before signing on the dotted line, review the fees for the HOA and exactly what they cover. You should also take a look at the association’s financials. If they often have budgetary shortfalls, homeowners have to make up the difference.

Read the covenants

HOAs document their rules and regulations in the organization’s covenants, conditions and restrictions. When looking at a home in a specific neighborhood, get a copy of the CCR and review it closely. Some HOAs have few rules while others mandate everything from the type of landscaping you can have to the color of your front door.

Specifically, check to make sure none of the rules are dealbreakers for you since you could end up paying hefty fines for running afoul of regulations if you purchase the property. The HOA could even place a lien on your property for too many violations.

According to the Community Associations Institute, more than 25% of Americans live in a home managed by an HOA, including a significant number of California homeowners. Understanding how your HOA works can protect you from financial loss in the event of an issue or dispute.