You’ve weighed your options and decided on the HOA community that best fits your lifestyle and needs, with perks like managed grounds, pool facilities, and hassle-free exterior maintenance. But each community operates differently, so how do you choose the right one for you?
Whether you’re looking for a home in Austin, Texas, Phoenix, Arizona, or Tampa, Florida, this Redfin guide will walk you through the important steps to vet HOA communities so you can move in with complete peace of mind.
1. Review key governing documents (CC&Rs and Articles of Incorporation).
When vetting an HOA, your first priority should be to start with the rental policy and review its terms, conditions, and restrictions (CC&Rs) and bylaws. Lease and short-term rental restrictions are one of the most common and costly surprises for new homeowners, so it’s essential to understand what you can and cannot do with your property.
Katie Carson, Director of Operations at Athens Property Management, highlights why rental restrictions need immediate action:
“The big contradiction we see is short-term rentals and rental restrictions. Buyers sign up for a home with the intention of operating it entirely as an Airbnb, or at least maintain it as a long-term rental in the future, and only then do the HOA allow short-term rentals. Some associations require you to own and occupy the home for one to two years beforehand if you are buying as an investment. It’s very important to check your HOA’s rental rules to ensure they don’t interfere with your cash flow. ”
In addition to rental restrictions, the governing documents will also list some other day-to-day rules that you should consider carefully before making an offer.
Pet Policy: Check weight limits, breed limits, and maximum total number of pets allowed. Architectural guidelines: Find out how strict the board is about making changes to the home’s exterior, painting, landscaping, and adding structures like fences and decks. Parking and Storage Rules: Review restrictions on street parking, commercial vehicles, guest spaces, or driveway parking for other vehicles such as RVs and boats.
2. Evaluation of financial soundness and reserves
The financial stability of your HOA has a direct impact on your monthly wallet. An HOA’s lack of funds can lead to surprise special assessments, or unexpected out-of-pocket fees charged to homeowners to cover major repairs, such as replacing a roof or repaving a street.
To protect yourself, always request the HOA’s current budget, balance sheet, and recent preliminary survey. As Kelly Hawkins, president of Main Street Management Group, points out, the preliminary investigation is the most powerful tool in this check.
“The best document to help you understand not only what you should budget for each year for future major repairs and replacements, but also what you should already have set aside is a reserve fund study. Compare that recommendation to your HOA’s balance sheet and annual budget to make sure your reserves are actually funded and on track.”
3. Evaluate the property management company
Although HOA boards are made up of volunteer homeowners who make high-level decisions, most communities hire professional management companies to handle day-to-day operations, maintenance requests, and financial collections. Simple repairs can turn into major headaches if the management team is unresponsive, so it’s essential to assess their track record before moving in.
Steven Jordan, director of marketing at HOA Explore, recommends gathering first-hand insights and testing your company using these key strategies.
“For new homeowners looking to gain insight into potential management companies, there are several places to consider.
Talk to the homeowners and board members: Have the homeowners been involved with the company in the past? If so, how long did it take for the management company to respond? And were the management company’s questions answered satisfactorily? If you have access to board members, ask them what they think about the company and what’s going on. Ask how long the association has been using them and whether they have recently considered hiring a new administrator. Check reviews and industry credentials: If you can’t get in touch with anyone, try reading online reviews from other homeowners and executives about how the company has run their community. Does your current management company have any certifications from the Community Associations Institute (CAI)? This can help differentiate between a random startup and a well-educated, established management company. Test your readiness: If you want to take it a step further, have your real estate agent contact the company and obtain a copy of the association’s CC&Rs. See how long it takes them to respond, or if they respond at all. ”
4. Audit fee payment history and special evaluation record
Reviewing past dues will give you a clear idea of how well the community has managed inflation and predictable maintenance costs.
Dues increases: Consistent small fee increases (e.g. 2-4% per year) generally indicate a realistic inflation plan. A sudden 25% or zero increase over a five-year period, followed by a large increase, may indicate poor financial oversight. Past special assessments: Ask if any special assessments have been imposed in the past three to five years, how much they have been funded, and whether new assessments are currently being discussed by the board.
5. Walk around your neighborhood and talk to your future neighbors.
Paper documents only tell half the story. A walk through your neighborhood on a weekend afternoon will give you a first-hand look at daily life, property management, and the general feel of the community.
Things to look for Key details to check for common elements Are the pool, clubhouse, landscaping, and roads clean and well-maintained? Compliance with regulations Are cars parked legally? Are trash cans kept out of sight, as required by the rules? Community atmosphere Are the residents friendly and seem happy with how the board operates?
Summary: Find what’s right for you
Finding the perfect HOA community requires transparency. By reviewing financial statements, speaking with current residents, touring the property, and scrutinizing management responses, you can buy your next home with confidence knowing that the area fits both your lifestyle and long-term financial goals.
FAQ
1. What happens if I violate HOA rules after I move in?
If you violate an HOA rule, the commission will usually send you a written notice or warning and give you time to resolve the issue. If a violation is not resolved, it could result in increased fines, loss of access to amenities (such as a pool or clubhouse), or, in severe cases, a lien against your home.
2. Can the HOA collect monthly dues without owner approval?
In most states and communities, the HOA board has the authority to increase regular monthly dues up to a certain percentage limit established by ordinance without a full vote from homeowners.
3. What is the difference between an HOA board and a property management company?
HOA boards are made up of volunteer elected residents who write rules, set budgets, and oversee community decisions. Property management companies hire third-party vendors to handle day-to-day management, vendor contracts, maintenance, and dues collection.
4. What is a “special rating” and how can I avoid being surprised by a special rating?
A special assessment is a one-time fee charged to homeowners when HOA reserves do not cover an unexpected or significant capital expense, such as replacing a roof or pool. You can avoid surprises by checking the community’s preliminary research and balance sheet before making a purchase to ensure that reserves are adequately funded.
5. Who pays HOA transfer fees and document request fees during home sales?
The burden of fees is negotiable between the buyer and seller, but local customs often determine who pays. The seller typically pays the HOA resale disclosure package and transfer fee, but the buyer should review the terms of the purchase agreement.
Read: Do Renters Pay HOA Fees?Who Pays HOA Fees on Rental Homes?
