The process of buying a property is one that is so exciting! Viewing new homes or condos, deciding what style you love, finding the perfect place to move — it's all so fun! And when you find that perfect place, nothing can bring you down! Well… almost nothing. When you find out that the perfect place comes with an HOA — which also brings HOA dues — it can cause you to wonder if you even want the place to begin with. But what are your options with HOA dues? Are they absolutely mandatory? Or more of a suggestion? Will not paying an HOA due affect your credit score? Here are some answers, as well as some ways that you can get out of paying your HOA dues.
Basically, an HOA, or a Home Owners Association, is an organization located within a planned subdivision or condominium complex that creates and enforces rules and regulations meant to keep the neighborhood pristine. Sometimes, these regulations include what can be present in your driveway, how your lawn needs to be maintained, and what hours there shouldn’t be any loud noise. Oftentimes, the HOA is also responsible for developing and maintaining the common spaces of the neighborhood. This can include any neighborhood parks, pools, fields, and more.
More often than not, the HOA is comprised of volunteers from the neighborhood itself. There are elections that are held where neighborhood residents can run for the board. The elections determine who is on the board, as well as any changes to the HOA regulations that may require resident approval. In some cases, like with condominiums that have a complex manager, there is a chance that you will have a paid staff on the board.
So, why do you have to make monthly payments? The simple answer is this: since they are in charge of maintaining the common areas of the neighborhoods, they need funds to do so. There are typically many things that require monthly upkeep in these planned subdivisions or communities. Pools, fitness areas, parks, general landscaping, and more all require someone to maintain them. And since these are perks that are available to all, everyone is expected to help pay for them.
HOA dues can range drastically. Some charge quarterly, some monthly, and some yearly. The amount can also range drastically. From just a few bucks every month to hundreds of dollars every month, each community is different. There are also times when the HOA dues can increase if the HOA decides it is necessary. Typically there has to be an open meeting that residents are notified of if there will be a discussion or a vote to raise the rates.
However, HOAs can also require their residents to pay something called a special assessment. For instance, say you live in a condo with an HOA. If one year there is a bad hail storm, and the HOA decides that the roofs need to be replaced (something that would be considered a common area that would be covered by the HOA), then that cost would be unattainable with normal dues. The HOA would send out a special, one-time, required payment request to help cover the cost.
Unfortunately, yes, you are required to pay whatever the HOA requires. When you purchase a property that is already under an HOA, you are agreeing to the terms of the HOA. This means you are agreeing to make the payments, abide by the regulations, and accept any special assessment or citation the HOA gives.
Again, you are required to pay the HOA dues. However, an HOA is a civil organization. This means the justice system (specifically, law enforcement) will not be the one to enforce your cooperation. That doesn’t mean that a court won’t prosecute you, however. If you stop paying your HOA dues, the HOA board can decide to take legal action against you. While there are a few steps in the process, ultimately, the HOA can get a lien placed against your property for not making the HOA payments. With a lien against your property, you will not be able to sell or refinance your home without paying off what you owe the HOA. And, if you fall behind far enough on your payments, the HOA will actually be able to then foreclose on your house to recoup what you have missed in payments.
So, there are obviously consequences to not paying your HOA dues. However, there might be some ways that you can get out of paying your HOA dues. Let’s take a look at some reasons why you might be able to get out of those pesky payments.
Ultimately, the choice is yours! Even before purchasing a property, decide NOW whether or not you are willing to pay HOA fees. If you aren’t make that clear to your realtor. This is the ONLY way to guarantee you aren’t paying dues. Otherwise, you are opening yourself up to legal action if you decide to stop paying the dues. If you’d like to talk about your HOA situation, feel free to contact Ascend!
