A Home Owners' Association (HOA) is usually a not-for-profit organization established by a community which governs rules regarding what can and cannot occur in homes, and also determines the rules and money spent on shared property.
Many condominium and townhomes/ houses available for purchase are part of a homeowners' association. As well, many new developments of single-family homes establish a homeowners' association to hopefully protect the rights of all in the community. When a person buys a home in an area with a home owners' association, he or she becomes a member of the HOA and is responsible for membership dues (monthly membership fees); thus, the decision to purchase a house or condo belonging to an HOA should be considered from a financial point of view.
Mortgages and Assessments
Living in a condominium or townhome/house can make life a lot easier!
- A live-in maintenance engineer to fix little things on the spot
- A manned or gated parking lot
- Assigned parking space(s) and additional storage
- Great amenities like pools, tennis courts, fitness centers, party rooms, and more
- Close proximity to shopping and entertainment
Enjoying this lifestyle in the heart of it all will be reflected in your monthly Homeowners' Association (“HOA”) maintenance fee. Living in a condo saves you from having to paint your home, do yard work, or clean the pool. Your HOA fee supports the upkeep of the building(s) and common areas. A misconception about condo living is that the cost of the HOA fee is somehow more costly than the cost of maintaining a single-family home, however, a careful review of the various costs of properly maintaining a single-family home shows that the costs are comparable.
Association Rules and Regulations - These rules may limit
Whatever amount you are calculating for a mortgage payment, taxes, and insurance; remember that you will also be paying monthly for the HOA maintenance fee. Ask to see the past 2 years’ condo board meeting minutes, the last 2 years’ budgets, and the current year's projected budget. (These can be obtained from the manager of the HOA.)
- Find out if there are any large-scale improvement projects that are coming up, and how much your share of those might be.
- Make sure that the previous owner has no past due charges from the Homeowner’s Association. Watch out for any assessments due after closing— especially in complexes hit by last year’s hurricanes.
Monthly HOA fees can range between 35 cents per square foot to over $1.00 per square foot depending on the cost of maintaining the building(s) and the services provided. Be sure to know the amount of the monthly HOA fee and what is included before you sign an agreement to purchase. A 'low' HOA fee should be examined thoroughly to make certain that adequate reserves are being maintained for future repairs and replacement. Florida law gives the Buyer of a condominium a period of time to cancel a contract to purchase after he or she has had an opportunity to review the condominium documents. When buying a condo from a developer, the Buyer has 15 days from the date that an agreement was executed by both Buyer and Seller, or, 15 days after the condominium documents have been delivered to the Buyer (if delivered after the date of the Agreement) to rescind and cancel the transaction. When buying a resale condo, the Buyer has only 3 days from the date that an agreement was executed by both Buyer and Seller, or, 3 days after the condominium documents have been delivered to the Buyer (if delivered after the date of the Agreement) to rescind and cancel the transaction.
read more about Florida Statute 720 "Homeowners' Associations"
Know your Neighborhood/Know Your Neighbors
- The number, type, and/or size of pets;
- How many guests you may have, as well as how often, and for how long they may visit;
- Whether you can rent your unit, and for what period of time;
- The reservation and use of the common areas;
- When you can have work performed in your unit; and,
- What days you can close and move into your unit.
Ask the listing broker for a copy of the current rules and regulations as they may have evolved since the building was constructed or converted.
Visit the condominium at various times of the day and evening to get an idea of the true life of the community, and the neighbors you will be living next to, above, and/or under. Consider the proximity to elevators, pool or community center, and weigh convenience against noise and traffic.
Serving Central Florida Homebuyers for over 30-years
ORANGE COUNTY HOUSING FINANCE AUTHORITY
2211 E. Hillcrest St. | Orlando, FL 32803 | 407-894-0014