When you purchase a condo, townhome or a house within a managed subdivision, you automatically become a member in that development’s Homeowners’ Association (HOA).  A HOA is an agreement amongst the homeowners to take care of the common areas and the development as a whole. Part of the upkeep and maintenance the HOA covers are “rules of conduct” of residents and visitors. The expenses for the upkeep come from the individual homeowner in the form of a monthly common area fee (CAF).

Here are a few things you want to understand about HOAs to be sure you are comfortable with purchasing within a managed development:

  1. What is the monthly CAF? This amount can vary from $60 to $1000, depending upon the amenities and services provided. You will need to build this amount into your monthly budget.
  2. What does the CAF cover? Some examples are hazard insurance (earthquake, fire, typhoon), security, pool, building repainting, grounds maintenance, elevators. Each HOA has its own CAF coverages.
  3. “Rules of conduct” or House Rules – Review these to make sure that they are not an impediment to your lifestyle.
  4. Are you okay with living in a community where every home looks the same (particularly the exterior). Some HOAs determine the colors of your home, the type of door, the type of fence, etc..
  5. Can you have a say in the HOA? Yes, HOAs are mandated to hold annual homeowner meetings. Go to the meetings. Or, you may volunteer to serve on the HOA Board.

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