Is it good to live in a community with an HOA?
This is probably one of the least asked questions in real estate, but a very important one. The best answer is this… It depends.
Each homeowner association is different based upon amenities and services. New Construction communities are completely different than a well-established community. Until the builder has sold out of new builds, the Developer has full control of the HOA. They must provide you with the By-Laws that govern each property owner, but do not provide HOA financials. State laws does, however, provide protections to these communities that mandate the Developer leave the HOA financially healthy.
Generally, HOA’s are governed by “elected board members” (homeowners) whose purpose is to ensure the community by-laws are being adhered to. Normally, larger communities will hire a Community Management Company to collect HOA dues and to pay out expenses to maintain all service areas. Many of these communities offer Pools, tennis courts, playgrounds and fitness facilities. Newer communities will have a bundled package to include basic internet/cable, and some will offer lawn care as part of the monthly dues.
The overall purpose for an HOA, is to help ensure higher property values for the homeowners.
With these benefits, also comes the down side of an HOA. Remember when I said a “well-run” HOA adds value? The downside of an HOA is when those who are supposed to be financial stewards, mismanage the HOA fund causing a sudden increase in HOA dues to pay for delayed maintenance repair items. Or, you have an HOA that doesn’t enforce the rules, causing a decline in property values.
The benefits of not having an HOA? You don’t have the added expense of a monthly fee and you are responsible for your own property as per zoning and city/county ordinances. Property values are associated with how well your neighbors keep their properties. Not everyone will have the same standards with lawn care and house upkeep, which will be different from property owner to property owner. If this doesn’t bother you, then this may be the best solution for you. If you want to paint your front door red, you can either submit a formal written request to an HOA Board for approval, or you live in an area where you can paint it red without permissions.
The Lake Nona area has a lot of new construction communities requiring an HOA fee. Although most of Lake Nona has these types of communities, there are also areas that do not require one.
The most important recommendation I can provide with HOA’s, is to make sure you receive a copy of the Rules and By-Laws. Understand the restrictions for what you can and cannot do with your property. The second most important recommendation is to receive a copy of the financial statements. You want to make sure the balance sheet is healthy and there is enough money in reserves for repairs and replacements.