THREE THINGS TO LOOK FOR IN AN HOA MANAGEMENT AGREEMENT
OCT 26, 2014
As of 2012, an estimated 25.9 million homeowners were members of the 325,203 total homeowners associations (HOA) in the United States. The structure of these organizations is typically very simple: every property owner in a HOA development is a member of the neighborhood association and therefore required to pay membership fees on a monthly, quarterly or yearly basis. These homeowners are encouraged to attend HOA meetings and even run for positions on their local board. In exchange for these payments, homeowners have the chance to reap a number of benefits, including shared neighborhood values and decreased ownership responsibility.
If you and your neighborhood are interested in forming or joining an HOA, however, you’ll first have to sign an HOA management agreement. This agreement, which lays out the rules you must abide by as a member of the organization, can mean the difference between living in a neighborhood you enjoy and one you don’t. Keep an eye out for these three common rules and consider how they might affect you.
Does your HOA management agreement set guidelines for the types of pets you can have, the size of these animals, or even prohibit certain breeds entirely? If so, make sure your pets meet all of these rulings and think about whether or not you can be happy with them in the future; after, a limit on dogs over 60 pounds might include that golden retriever you were planning to adopt in a few short years. If you are planning to create an HOA, this rule is often best discussed with the neighborhood to ensure that no one will have to get rid of their pet.
NOISE AND NUISANCE RULINGS
This is typically an easy restriction to understand, as no one wants to listen to a loud party next door when they have to go to work tomorrow. However, it is also one of the easiest rules to violate. Make sure you understand the hours and specific rules that are associated with this regulation, and be aware of any potential fines or problems. If you are in the process of creating this ruling, consider consulting with property management services to establish limits that are both fair and beneficial to your neighborhood.
Many homeowners invest in residential property as a method of income. However, many HOA management agreements do not allow homeowners to act as residential property management companies by renting out their homes to tenants. Make sure this isn’t a problem before you buy a home in an HOA development, or you could suddenly find yourself with an expensive property you can’t use. For those in the process of writing an agreement, this can be an effective way of ensuring that all people in the neighborhood have similar values and that properties are correctly maintained.
Living in an HOA can be a great experience with many benefits. However, it is important to carefully consider how the neighborhood’s rules might affect you and other residents if you are creating an HOA management agreement or considering moving into an area with one in place. If you are a new HOA, consider hiring an HOA management company to consult on this and other important tasks to avoid causing problems for residents. Meanwhile, if you are a potential resident, discuss the items on the agreement with the neighborhood’s board to prevent any misunderstandings or unexpected problems.