HOA or No HOA?

We have found over the years that our homes are only as valuable as the neighbor’s homes.  With that being said, sometimes it is hard to appreciate a homeowners association until you don’t have one, or until you drive through a subdivision that does not have one.  The difference in the subdivisions can be drastic.  Trucks and cars are parked down both sides of the street.  RV’s, including boats, campers, trailers, motorcycles and vans are parked on the side of the house.  Cars and trucks are parked in the front yard because garage and driveway space is taken.  Grease stains cover the streets.  Front yards are not landscaped or have multiple types of fencing blocking the front yards.  Trash and debris are piled high on the sidewalks. 

Unless there are rules with consequences in place, many homeowners and renter s do not take responsibility for keeping their exterior property clean, presentable and organized.  Therefore, if your neighbor’s house is not presentable, then your home has less value.  We see this example most when we list a property for sale on a run-down street or next to a neighbor who fails to maintain their property.  The neighbors and quality of the neighborhood will turn a potential buyer off right away. Many times when we have buyers in the car and we pull up in front of a home in an un-kept neighborhood or a property adjacent to an un-kept home, we do not even make it out of the car.

In summary, let’s look at the pros and the cons of living within a HOA:

Pros
Below are three ways in which a HOA is helpful and beneficial to a community.

• They are responsible for maintaining and paying for the upkeep of common areas, such as swimming pools, play grounds, public gardens. Without an HOA, the residents may not have a community with these amenities within their neighborhood.
• They help maintain or raise property values by regulating and putting rules and consequences in place to help keep a neighborhood looking good, such as preventing the issues above.
• They are responsible for mediating disputes between residents.   If there is a problem with a neighbor, the HOA should be able to help resolve it quickly and easily with hopefully little animosity left over, as it was the HOA making the final decision, not a complaining neighbor.

Cons
Here are reasons some people don’t like HOAs.

• Residents feel as if the HOA is always watching them to see if their grass is mowed to the right level; if they have planted the right types of flowers in their yards; or if they have a pet that is oversized or of the wrong breed.
• The dues they owe are just another added expense for them to consider when factoring how much home they can afford.  The dues typically will go up over the years, without much warning also.
• An HOA can put a lien on your home if you do not pay your dues within a set time frame. And if you fight them in court and lose, more than likely you’ll have to also cover the HOAs legal bill.
• A management company is usually hired to also help set and enforce the rules, which cause some worry to the homeowners as they feel that they are giving control of their properties/community to a company that is managing several others and thus having no personal tie to the community.

When considering these cons to living in a subdivision, just remind yourself that it is true that some HOA's are overzealous in their enforcement of the restrictive covenants, but those regulations were not created just to harass people about every little detail, but instead to protect the residents' property values. Their purpose is to help maintain a certain consistency, conformity, capital improvements, and conveniences for the neighborhood.  In doing so, an HOA inherently restricts the rights that would otherwise exist for its members based on municipal codes.  The collected dues are used toward the maintenance of the common areas or community property, or for other services.  It is not meant to be a profit-making venture in most cases.

So, what is the value of your homeowner association? If you consider the amount of assessments you are paying annually and compare that to any drop in value of your property, wouldn't you agree that the value you are receiving for the payment you are making is worth it?