The real estate market has picked up over the last six months throughout the country. There are some parts of the country that have established HOAs in place. HOA stands for Home Owners Association. It is a legal entity to maintain common areas and enforce the rules to protect property values. This is the main objective for the HOA is to maintain house values by enforcing rules and regulations so everyone adheres to them. Otherwise, your neighbor will have his car up on cement blocks. That would be an ugly scene while selling your house.
A couple here in Phoenix, AZ just won a lawsuit against the HOA board. Things can get ugly in a hurry when the HOA board abuses their power. The lawsuit has gone on for the last few years. Now, they are negotiating a settlement in the amount of $200,000 plus $80,000 in lawyer fees. Who pays that fee? The other members in the community will be assessed $8,000 each to pay for the claim. Is that legal? The Realtor did not tell me when I purchased this house.
http://www.azcentral.com/news/articles/2009/06/17/20090617condosuit0617.html
Here are a few tips when considering purchasing a home governed by a HOA
1. Read the CC&Rs(Covenants, Conditions & Restrictions): This document represents the rules and regulations for the particular neighborhood. Many people purchase a house to only realize after they purchased a house that they have limiations such as no additions to the house or not allowed to put in a swimming pool.
2. Monthly HOA Fees-Find out what these fees cover. Find out who is responsible for items on the property so one can budget correctly. Furthermore, check to see if any large assessments were charged or going to be charged to the home owners for improvements or lawsuits as mentioned above. Also, many HOAs will not allow you to run a business out of your home because it will bother your neighbors.
3. Financials-Review the financials of the HOA board to see where the money is going. Is it being managed correctly or not? Monies are used to neighborhood improvements such as paving the road or trimming the trees every two years.
4. Attend Monthly Meeting-I encourage my home buyers to attend a HOA meeting before they purchase the home. Meet the board members and neighbors to see if it will be a good fit or not. Ask questions when present.
5. Rules Set in Stone-Rules can change as time goes on. Nothing is set in stone when it comes to HOAs.
Phoenix real estate is becoming very popular for many people. We have people from around the world purchasing homes because of the location and what it has to offer. The Real Estate and Beyond Network is here to assist all buyers. Please visit www.DeliaTeam.com for further information.
Make the Call, Set the Plan, Do the Deal$!
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