Buying a home is one of the biggest investments you can make. It’s essential to think about the size, price, and the property’s location. That also means considering whether you should live in a neighborhood managed by a homeowners association (HOA).
Is buying in a Texas HOA community right for you? What are the key things to consider when choosing an HOA neighborhood?
In this guide, we’ll break down the advantages and drawbacks of living in an HOA community. We’ll also share some practical tips and questions to ask when house hunting to ensure you invest in the right home.
What Is an HOA Community in Texas?
A homeowners association (HOA) is an organization that maintains and enforces rules and regulations in subdivisions, planned communities, and condominiums. They set the standards for homeowners and their properties to ensure safe and orderly living conditions.
How Does an HOA Work?
HOAs are managed by a board of directors. They’re usually elected by the residents (the homeowners) to act on the organization’s behalf. The board of directors enforces HOA regulations and manages its finances.
Membership in HOAs is typically automatic. That means, if you purchase a property within the association’s jurisdiction, you’re deemed a member by default and are bound by its rules and guidelines.
Most associations have their rules and regulations outlined in a document called the Declaration of Covenants, Conditions, and Restrictions (CC&Rs). Before buying in an HOA, consider asking for a copy of their CC&Rs.
Benefits of Living in an HOA Community in Texas
HOA communities can be appealing because they typically have attractive and well-kept surroundings. If you’re thinking of moving to a neighborhood governed by a volunteer board, here are some of the benefits of HOA you can look forward to.
Maintained Community Appearance
An HOA enforces rigorous community standards for residents to follow. And while some may find these rules off-putting, they greatly contribute to improving the area’s aesthetic and character.
Within the CC&R, you’ll usually find guidelines for property appearance, including paint colors, decorative elements, landscape requirements, and even architectural styles.
All these regulations ensure the neighborhood preserves its unique appeal and that no resident neglects their home, which can compromise the neighboring properties.
Access to Shared Amenities
Besides an attractive curb, one of the most compelling reasons to buy into an HOA community is access to amenities you can’t otherwise afford. Think about swimming pools, tennis courts, fitness centers, picnic areas, and clubhouses.
Some neighborhoods also feature golf courses or family-friendly facilities such as dog parks and children’s playgrounds.
These convenient amenities allow homeowners to enjoy a community-oriented living. They encourage active involvement in shared activities, fostering a sense of community and improving the overall quality of life.
Not to mention, HOAs are generally responsible for the maintenance and upkeep of these common amenities. For you, the homeowners, that means fewer responsibilities and more time for work or family.
Protection of Property Values
From a financial standpoint, investing in a home managed by a homeowners association can be worthwhile due to the stable property value. If one day you decide to sell your home, you’re less likely to lose money from depreciation.
Properties in planned communities are valued higher mainly because HOAs maintain the streets and enforce vital rules to enhance curb appeal.
According to a survey by the Cato Institute, HOA houses are valued 6% higher than regular properties. These homes also tend to have a higher demand, which means finding potential buyers is easier if you’re forced to resell.
Sense of Community
While often underappreciated, a well-run HOA can go a long way in fostering a genuine sense of community for the residents.
When everyone pays their fair share, participates in social activities, and is active in HOA initiatives, the members become more connected and invested in their neighborhood.
Some organizations also offer lifestyle programs, including workshops and classes tailored to the homeowners’ interests.
HOA Dispute Resolution Process
When you’re living in a close-knit neighborhood, sooner or later, disagreements among the residents are bound to occur. And without a reliable body to resolve these disputes, differences can turn into serious conflicts.
Homeowners associations deal with disputes through carefully established procedures. Complaints typically go through internal dispute resolution (IDR) first, where the members review the HOA regulations to address the conflict.
They then provide mediation and arbitration, facilitating reconciliation without litigation, referred to as alternative dispute resolution (ADR). Legal action is only a last resort when all efforts at resolution don’t pan out.
Drawbacks of Living in an HOA Community
While you can’t deny the advantages of living in HOA neighborhoods, they may not be for everyone. Here are the reasons why others opt out of properties governed by a homeowners association.
HOA Fees and Dues
The first and most common reason is the fees. And while the funds collected are used for the upkeep of amenities, some people dislike that they’re mandatory.
For those who may struggle to keep up financially, these obligations represent extra costs on top of mortgage, home insurance, and taxes. Not to mention, unexpected special assessments could further strain your budget.
Restrictions and Rules
While the goal of the association’s restrictions is to improve the quality of life, many people dislike that HOAs control what they can and cannot do with their properties. Breaking the rules also incurs fines.
Many organizations regulate parking, holiday decorations, and the types of flowers homeowners plant. They may restrict home-based businesses and even dictate the breed and number of pets you can own.
If you’re a property owner who prefers more freedom with your home, you may find certain HOA limitations to be inconvenient.
HOA Rule Enforcement
While a minor governing body, HOAs possess significant enforcement power. They can legally impose fees and fines for violations, even place liens on properties. They can even foreclose on your house for unpaid commitments and assessments.
To make things worse, volunteer boards may sometimes demonstrate a lack of management skills. From ignoring feedback, imposing seemingly arbitrary rules, and failing to provide transparency, residents can feel dissatisfied with their HOA.
Limited Flexibility
Homeowners associations typically set rules to govern how residents can and cannot use their homes. That means they have the authority to restrict commercial activities if they interfere with the community’s appearance and order.
So, if you’re looking to start a business from the comfort of your couch, check with your board of directors first to avoid future inconveniences.
HOA Fees In Texas: What To Expect
HOAs require member homeowners to pay a periodic charge. These charges can either be monthly or annual. The exact amount depends on various factors, including the neighborhood’s amenities and services.
The association uses the money collected to fund common area maintenance. This can include landscaping, waste disposal, community security, damage insurance, and maintenance projects. For condominiums, HOA fees also pay for the upkeep of lobbies, patios, and elevators.
In Texas, the average monthly HOA fees fall anywhere from $100 to $400. HOAs located in high-cost living areas can exceed $1,000 per month, due to increased maintenance costs and high property values.
What to Ask Before Buying a Home in an HOA
Before you commit to an HOA, it’s wise to do your due diligence and educate yourself on how the organization works and whether it aligns with your preferences.
The first thing to ask about is the association’s governing documents or CC&Rs. If possible, request a copy and familiarize yourself with all the restrictions, regulations, and guidelines for the subdivision.
Unpaid assessments and fees are the primary causes of HOA-imposed property liens. To avoid similar legal hitches, ask about the monthly or annual charges, special assessments, and the procedure for paying fines.
Lastly, learn how the volunteer boards manage the community’s finances. A well-run association should have a thorough budget plan and secure savings. This is important because residents typically shoulder unexpected costs.
The Importance of Professional HOA Management
Not all HOA communities are well-run. Unfortunately, poor management leads to a host of issues that adversely impact the homeowners’ quality of life.
Issues such as fund mismanagement, arbitrary rule enforcement, lapses in maintaining the neighborhood, and a lack of transparency with procedures can make residents distrustful of the HOA. In many cases, the core concern lies with inexperienced board members.
To resolve the problem, HOAs typically hire HOA management companies. These professionals provide expert guidance for vital HOA functions, from accounting to rule enforcement and community upkeep.
FAQs
Are HOA fees mandatory in Texas?
Yes, HOA fees are generally mandatory for all homeowners living within the jurisdiction of a homeowners association. Non-payment can result in various issues, including late payment penalties, amenity restrictions, and even property liens and foreclosure.
What do HOA fees usually cover in Texas?
HOA fees in Texas are typically used for the maintenance of common areas and amenities. These fees also cover the costs for property damage insurance and other necessary services, such as security and waste disposal.
