| HOKE: Who controls your HOA? |
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By: ANN HOKE, Post Columnist
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Posted: Sunday, December 19, 2010 7:13 am
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Last week’s column shed some light on the importance of inquiring about the homeowner association before purchasing a home in any restricted community.
Let me share a couple of questions that you may want to ask your real estate agent, property owner or builder before committing to the purchase of your dream home.
Who controls the HOA?
It’s important to know who is in control of the HOA, especially in newer neighborhoods.
In many cases the developer (which may also be the builder) controls voting rights in the association by creating two types of membership – and granting more votes per lot to the developer.
The developer is able to protect the company interests for a longer period of time with greater control over the HOA budget and architectural control.
Who serves on the board?
Residents may be appointed to an advisory board while the HOA is still under developer control.
Regardless, when the developer no longer owns enough lots to maintain legal control of the association, the HOA nominates or elects members (residents) to serve staggered terms.
In smaller communities, there may be more open board seats than volunteers.
It’s reassuring to know that the HOA board is served by residents who really care about the neighborhood.
What’s my investment?
You might consider the monthly fee as an investment since it arguably helps protect the value of your property.
The required dues will vary depending on the amenities, budget and number of homes in the community.
Payment terms are dictated by the association and usually payable monthly, quarterly or annually. You also need to inquire and ask if there is a transfer or capital fee payable at the time of purchase.
This fee is frequently goes undetected during the purchase of a home (on occasion not discovered until after closing), but is normally stated in the restrictive covenants.
Be sure to verify the precise amount – this one-time fee is often credited to the HOA reserve account and may range from zero to more than a thousand dollars (on a condominium or upper end community).
How strict is the architectural control?
This is an important question when the neighborhood is still under construction.
There is nothing more disappointing than seeing the developers resolve to maintain good architectural control wane over time.
It’s not uncommon for the builder or developer to relax standards during a down economy or just plain lose interest.
The architectural control committee also approves additions to homes, fencing requests and streetscapes or landscape modifications.
Have you received a copy and reviewed the Restrictive Covenants?
Always be sure to get a copy of the Restrictive Covenants and review them before purchasing the property.
If you have concerns, seek the professional advice of your real estate agent or legal advice from an attorney.
Future columns will take a closer look at the budgeting process for an HOA and provide some insight into the services the association provides.
REMINDER – With your help, we would like to recognize HOA presidents in Murfreesboro and Rutherford County.
On Sunday, Jan. 9, we will publish the names of HOA leaders submitted by my readers as a way of saying thank you for their service in the neighborhood.
If you would like to nominate an HOA president for recognition, simply e-mail their name, position, community and phone (or e-mail).
Include your own contact information to assist us in verification of your nominee.
We want to salute those who have earned your special appreciation.
Send your nominee’s information to HOA@annhoke.com or ann@annhoke.com.
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