Even if you’ve never owned a home in a community that was governed by a homeowners association (HOA), you likely already know that it involves homeowners paying dues and abiding by certain rules. There’s more you should know about HOAs, however, if you’re considering purchasing a home in a community that has one. In this post, we’ll answer the questions we hear most often about HOAs.

What is an HOA?

An HOA is an organized group of volunteer residents that governs a neighborhood by creating and enforcing a set of rules. A condominium owners association (COA) serves the same purpose.

The members of the association are elected by residents who are on the community’s board. The members’ full slate of duties will vary in different communities, but in general, the group is expected to help protect the community’s home values by making and enforcing rules and assessing fees that help pay for the maintenance of shared spaces and amenities. 

What are HOA Fees?

HOA fees are dues paid by homeowners that go toward the maintenance of common areas and amenities in a community. Depending on the terms of the HOA agreement, fees may be paid monthly, semi-annually, or annually. The amount of these fees may be adjusted from time to time to ensure the association maintains sufficient funds to cover rising costs or additional needs.

What do HOA Fees Cover?

No two HOA-governed communities are the same, so you should verify what the fees cover in a neighborhood you’re considering moving to. These are just some of the expenses that HOA fees may be used for:

• Gate security guards
• Landscaping and grounds maintenance
• Maintenance of swimming pools and spas, tennis and basketballs courts, playgrounds, fitness centers, clubhouse facilities, and other shared amenities
• Electricity, water, heating, and air conditioning, and other utilities for common areas
• Reserve funds, which are kept on hand to cover irregular or unexpected costs
• A professional property management company
• Insurance policies for common structures and property

Does an HOA Have Legal Authority?

New homeowners in an HOA community must agree to abide by HOA rules and regulations by signing a legally binding contract. That means the association does have legal power to require homeowners to abide by the contract’s terms.

An association has several options for enforcing HOA rules. The most severe options include forcing a foreclosure on a home if the owner doesn’t pay HOA fees or filing a lien that may become a problem if the owner wants to refinance or sell the home.

With so much at stake, it’s critical that you fully understand the terms of any contracts before signing.   

Are HOA Fees Tax Deductible?

For primary residences, you can’t deduct HOA fees or dues from your taxes. If you own a rental property in an HOA community, however, you may be able to deduct the fees. Please consult a tax expert for advice.

What are Covenants and Restrictions?

Communities governed by HOAs will have their legally binding rules defined in the Declaration of Covenants, Conditions, and Restrictions (CC&Rs). In the simplest terms, CC&Rs spell out everything you can and cannot do with your home and property. Requirements and restrictions may apply to a number of things, such as:

• Parking areas
• Trash container handling and storage
• Fencing
• Home businesses
• Types or numbers of pets
• Exterior decorations
• Exterior maintenance of lawns

Pros and Cons of HOA Communities

Deciding if you’re a good fit for an HOA neighborhood depends on your priorities and the kind of lifestyle you prefer. The following pros and cons can help you determine what’s best for you.

Pros of an HOA:

• The neighborhood will look better, thanks to mandated lawn and landscaping upkeep, restrictions on paint colors, rules for boats or RVs parked in driveways, and more.
• You’ll have access to amenities but won’t have to share the expense of maintaining them by yourself. One good example is a swimming pool, which is expensive to build and requires constant maintenance.
• If you have a conflict with a neighbor over issues such as noise or something that encroaches on your property, you can take your complaint to the board of the HOA or the company that manages the HOA.

Cons of an HOA:

• You won’t be able to make changes to your house or property (perhaps not even minor ones) without the approval of the HOA or its architectural review committee. Thinking of building a shed in the backyard or planting daisies along the street? You may be able to, but not before you get permission.
• You will, of course, have to pay dues to the HOA and you’ll need to consider this expense when you calculate how much a house will really cost you each month. In communities where there aren’t any big-ticket amenities, such as tennis courts or a large swimming pool, the dues can be surprisingly low. You may be paying only for the maintenance of common areas such as landscaping at the community’s entrance and on its medians, for example. At the other end of the spectrum, a brand-new HOA community with a fitness center, multiple pools and playgrounds, walking trails, and electric car charging stations are going to put a sizable dent in your budget each month.
• If you experience financial troubles that keep you from being able to pay your HOA dues, you may be in danger of losing your home through foreclosure.

Questions about HOAs in Amelia Island Communities? Get in touch.

If you’re thinking about buying a property on Amelia Island, take the time to become familiar with the HOAs that are part of several communities here. Our Amelia Island Real Estate agents will be glad to answer any questions you may have about a property you’re considering or help you find your new home here if you’re just getting started. Contact our real estate professionals today.