H to the izz O, A to the "oh no"...

Ah the three most dreaded letters in any real estate or living situation, right? H.O.A

But why do many people feel that a homeowners’ association (HOA) is something to be avoided, or if unable to be avoided, loathed?  It probably has to do with our innate sense of individuality and personal freedom, particularly when it comes to our property.  Why should anyone else have a say in what I do with my home?

In many ways, this feeling is understandable, especially with first time homebuyers that have likely been living in restrictive rental properties.  They are finally looking forward to a place where they can have pets, paint the walls, grow a garden, or simply have a place that they can call their own.  Buying into a community that then puts those same restrictions on them doesn’t seem like that much of a step forward, does it?

And it’s true, HOA’s can sometimes be even more restrictive than a landlord or property management company.  But it’s not meant to be punitive.  For the most part HOA’s are meant to preserve the value of the community’s property, and that of the individual owners.  Regulating homogeneity or similarity of properties helps to stabilize home values for the whole community, which is why that sense of “cookie-cutter” homes in suburban neighborhoods can sometimes be very strong, as HOAs can stipulate the type of landscaping, construction, or exterior cladding allowed.  In condominium or townhouse communities, HOA’s are helpful in controlling parking situations, garbage collection, and building maintenance, as well as shared liability for community areas.  While the HOA looks like just one more thing to pay for as a homeowner, it will typically offset other, regularly paid expense.

The fees for HOAs varies greatly.  In some single family housing communities, the HOA fee may be annual or quarterly, which simply goes toward maintaining the monuments at the entrance of the community, or landscaping of shared community elements (eg: playgrounds or green spaces).  While in condo or townhouse communities that fee may go toward utilities such as water, sewer, or garbage, with some even including cable, internet, etc.  In those communities where common walls can be found, a solidly managed and budgeting HOA is usually responsible for large capital maintenance projects as well.  Budgeting for these large projects is usually done over 30 years, as new roofs, siding, and paving projects require much forward planning.  In many respects, planning for these expenses well is a sign of good and healthy HOA management.  While it might be nice to have a low HOA payment, it’s not nice to receive a large assessment when your 50 unit complex needs all new siding.  If the costs for those large projects hasn’t been budgeted for in the monthly HOA payments, they are assessed against all of the owners in the community, typically based on the percentage of ownership of each individual owner (usually based on square footage).

The main thing is for a buyer and their broker to do their due diligence in researching a property’s HOA, so that they are aware of the details before making an offer.  If you're considering buying into a community in the Portland area that has an HOA, we would love to help with your research and buying decision.  Just give us a call!