Purchasing a home or a condo represents a significant monetary investment. It also requires investing a considerable amount of time and energy to secure the ideal dwelling. While real estate agents can speak the “language” and provide necessary insight, a little homework can go a long way, particularly when it comes to the differences between homeowners associations and condo associations.
Both entities have their own rules and fees and require prospective real estate buyers to know every detail regarding the roofs over their respective heads.
Homeowner associations: Benefits and drawbacks
A homeowners association (HOA) oversees a planned community. Essentially, the HOA serves as a governing body that establishes and enforces rules. Single-family homes account for 60 percent of HOAs and 80 percent of houses in new subdivisions. Dwellings can also include townhouses.
While some HOAs charge an annual fee, others request monthly dues for services that include common area maintenance, upkeep of buildings, and insurance to cover shared spaces. On average, the fee can be around $250 per month based on location and included amenities for those living in the area.
Prospective homeowners considering a home in an area governed by an HOA should know that community rules will be in place when it comes to such things as lawn maintenance, the number of occupants in a home, house color, fencing, and regulations involving parking, just to name a few.
Condo associations can also establish HOAs, with the only difference being that condos are housing that is attached. Those who purchase condos typically have ownership of common areas shared with all residents. Fees are also required, with payments due monthly, quarterly, or annually.
Whether moving into a new home or a condominium, owners should know the exact costs, particularly when it comes to HOAs, if only to avoid significant “sticker shock.”