Association costs can slam your budget.
Associations have their pluses and minuses, and are certainly not for everyone, particularly for homeowners desiring freedom of expression including what color to paint a home, whether to have an in-ground or above ground pool, and other personal touches.
Homeowner association fees can vary widely and will sometimes scare potential buyers away. However, on closer examination your association may present some value beyond maintaining order in your neighborhood, including the following:
Pool access
— The cost of maintaining your own pool may not be worth it to you, but having access to a community pool that is included in your association dues might be worthwhile. Leave the cleaning and maintaining to someone else — use the pool as much or as little as you like.
Lawn care
— Some associations provide complete groundskeeping from cutting the lawn to planting seasonal flowers in your yard. This can be beneficial for the homeowner who enjoys a well manicured lawn, but doesn’t want to maintain it herself. If your landscaping tastes are different, you might find the association’s choice of gladiolas instead of gardenias to be a bit restrictive.
Utility coverage
— If you live in an condo or similar clustered housing unit, your utilities may be covered or at least certain expenditures such as water, sewage, trash pickup, heat, cable, Internet and common area lighting. Consider these matters when you see your $400 monthly association fee.
Parking area
— Two spaces for parking may not see like a big deal, but if your community has limited parking it can certainly beat the cost of renting garage space. Your association fee may also cover lot maintenance including snow removal, general upkeep and and blacktop resurfacing.
Exercise amenities
— Besides a community pool, your association may include tennis courts, hiking trails, basketball courts, a fitness center or something as simple as a horseshoe pit or bocce ball court.
There are some cautions potential homeowners should know about before buying a home with a homeowner’s compact. Firstly, you’ll need to abide by the rules — no exceptions, except as approved by board approval. Secondly, there are many hidden costs that can spring up including major renovations to the grounds, parking areas and streets and in the case of clustered housing the buildings, such as the roof. Your monthly fees may not cover these expenses; you could be billed thousands of dollars separately for your share of the improvements. Thirdly, the association board should be financially solvent. Although stricter laws in recent years have required associations to have reserves, these funds can quickly become depleted if a major improvement or maintenance issue arises.
Ultimately, your decision to buy a home with a neighborhood compact should be weighed by your willingness to submit to sometimes onerous regulations and the cost of maintaining such an arrangement. Beyond that, your attorney may have a thing or two to say, with the appropriate warnings to help you make an informed decision.
Further Reading
St. Paul Real Estate Blog: Sky High Association Dues; Teresa Boardman; Feb. 2009
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