Big Challenges Involving The Home Owners Association.
A good friend of mine was relating a story to me about common homeowners association problems. I remember it distinctly. She was sharing this story with me while we were out looking at properties together, I think perhaps out of complete frustration from what she experienced. It’s always interesting to hear the perspective of someone you know well. There are subtleties you can pick up on giving you a wealth of information on a given topic.
She found herself in a place where she thought was an excellent choice. It was supposed to be a place to live with her husband for many years. After all, they also had some friends in the same complex too. They lived right near a golf course and were able to play many times a week, it was a nice piece of real estate. She said it looked fantastic, and the grass was a deep green. She said the gardens looked beautiful and very well kept also. Then she dropped the shoe, she spoke about voting and control. She talked about how this led to additional costs making it difficult to afford. She also spoke about protecting her equity which caught my attention.
We need the first take a look at what the homeowners association Is trying to accomplish for their building or community. Many people can live in the same area and have made substantial investments in their properties. The last thing they want to is to have one unkept property possibly bring the value down in the entire area which could affect the price, the equity, and the all-around living environment. In some communities, this could also impact your choices when it comes to painting your house, how you would like to groom your yard, and what you can do with your driveway. Some places don’t even allow propane BBQs.
So in her community, the Tipping Point was when, out of the blue, the homeowners association put forward a vote. This vote was asking for additional fees from every resident because they wanted to turn the fitness facility into a recreation center where people can sit out and have coffee instead. Not only did this cause friction with the homeowners association, but this also created a split amongst the residents. Ultimately people turned on each other and began to express their differences. Now people were feeling stuck having to live next to a person they didn’t get along with and certainly didn’t want to sit in a recreation center to share a drink. She did share some people living there could not afford what the HOA was asking. She felt this could cause some of the families to miss payments and even worse potentially put some of them into foreclosure. The foreclosure process can be different from state to state, but the HOA can initiate foreclosure proceedings.
Protect Yourself From Homeowners Association Headaches
1)Take a good look at the contract to see what is in their control.
You’re going to want to get a good understanding of how that building assesses situations and how they go about bringing change or even maintaining the things they have in place.
2)Determined if they’ll be any hidden costs
Do your due diligence and get a clear answer to what projects they’re considering in the future. These projects can start with good intentions, but they can also be the root that causes a lot of disruption amongst others in the area. After all, you’ll be living with these people. You want to make sure you get along with them.
3)Protect your investment.
Make sure you have the right people on the board, perhaps get to know these people fairly well. The last thing you want to have is someone come up with crazy ideas, implement them, and it costs you concerning equity. You might find yourself in the position of my friend where she ultimately rented her place out and went looking for somewhere else to live. Determine if you’re even allowed to rent it out. Something else to check into as well.