In searching for a home to buy, you might find that many of the available or most enticing ones are within existing developments and governed by a homeowner's association (HOA). However, if you've done any research at all, you've probably noticed that some of these places have very high fees: often several hundred dollars per month. Particularly if you're hoping to stay in this home for several years, that raises a potential worry: could these fees keep going up and up?
That's what we'll discuss here, including suggestions for how to dig deeper.
You're right to take homeowner's association fees into account when buying a property. They represent the ongoing financial obligation you'll have as an owner to pitch in on the costs of building and maintaining common areas and in some cases parts of your own property, such as a shared roof or walls.
Too-high fees can be a problem not only for you but if they exceed some other owners' ability to pay. That can result in disputes and foreclosures, which ultimately could lower your quality of life and the market value of homes within that community.
Yes, the possibility exists that the HOA monthly fees will rise. The trouble is, that possibility exists whether the fees are high now or not. In fact, unusually low fees are sometimes a sign that the association hasn't been able to talk the owners into paying for needed maintenance, repairs, and improvements. The day will come when they can't put this off any longer, and you may have to pay some whopping special assessments along with the usual fees.
You'll definitely want to do more than take the existing monthly fees at face value when considering buying a home in an HOA. Check out:
How do you find out such things? First, review the master deed or "Covenants, Conditions, and Restrictions" (CC&Rs). Then, talk to the other owners, read over the minutes from recent HOA meetings, and follow up on any unsettling information you uncover.