Today, real estate agents frequently market properties lying within residential developments governed by community associations. During 2016, these groups helped maintain properties housing an estimated 69 million people in the United States alone.(1) The presence of an HOA or a COA sometimes significantly impacts real estate.
Homeowners receive important benefit by attending the member meetings conducted by these organizations. The decisions made at these events sometimes affect real estate owners in significant ways. Not every dwelling lies within an area governed by an HOA or a COA, of course. Yet if your property does provide you with membership in a local community association, consider five excellent reasons to participate:
1. Community Associations Seek to Maintain Property Values
Most developers establish HOAs or COAs primarily as a way to assist residents in maintaining local property values. Creating an effective community organization with the power to enforce real estate covenants helps protect purchasers. Property buyers know they can still count on shared amenities enhancing their real estate even after the sale of every lot or unit in the development.
Many HOAs and COAs hire management companies to help administer common areas and maintain shared assets. For example, if a luxury residential community includes a riding stable for residents, the local HOA typically helps make certain this facility remains in excellent condition. It might hire (and fire) stable management firms, and authorize the replacement or repair of damaged equipment, or the purchase of horses.
2. Many Community Associations Enforce Detailed Rules
Community associations differ widely today in the extent to which they enforce association rules. In some places, following the completion of a development, property owners possess the authority to agree voluntarily to terminate their community association completely. In other cases, a founding developer invests these local organizations with sufficient authority to ensure the HOA or COA remains active in perpetuity.
Before purchasing a home in a subdivision or condo governed by an HOA or COA, buyers usually benefit by reviewing the provisions for the community association carefully. You might consider asking your real estate agent to obtain a copy of these rules for you on a USB drive so you can review then at your leisure. Some local bodies enforce highly specific rules. For example, an HOA may impose restrictions on the color or style of exterior residential improvements. It might prohibit the use of certain types of fences. In some cases, depending upon state laws, a community organization may even impose limitations upon a homeowner’s ability to rent out the property.(2)
3. Your Community Association Fees Help Maintain Shared Facilities
Most community associations charge members monthly, quarterly, or annual fees. These dues contribute to the maintenance of services and common (or shared) areas. While these types of charges do raise the cost of living in a condo or a residential community, they also help ensure vital amenities remain in place.
Most real estate experts caution property buyers against purchasing property within a community association which charges unusually low (or zero) fees. In these situations, buyers run a high risk of acquiring an asset which might depreciate in the future. Imagine how unhappy you’d feel as a new condo owner if the COA does not possess sufficient funds to make necessary roofing repairs to the building? When a community association cannot afford to pay anyone to mow the lawn or to remove snow from the parking lot, condo owners sometimes encounter difficulty re-selling their real estate.(3)
4. Some Community Associations Possess the Authority to Modify Fees
In many cases, founding developers establish community associations which authorize fee adjustments to keep pace with changes to the cost of living index. By attending HOA or COA member meetings on a regular basis, you’ll enjoy a better opportunity to remain aware of possible upcoming modifications. Many community associations also allow participating property owners to express their views about proposed fee increases or decreases.
In some cases, property owners have faced lawsuits from community associations for failing to pay required HOA or COA fees on time. These charges typically do not represent purely voluntary contributions. Most community associations enforce fee collection through legal action, if necessary.
5. Keep Better Informed About Local Real Estate Issues
Finally, one of the most important reasons for members to attend community association meetings involves keeping well informed about local real estate issues. Proposed property tax increases, municipal lawn watering restrictions, pending utility assessments, and other topics of interest to residents often fill these meeting agendas. For example, if a zoning change will soon bring more commercial activity into the immediate neighborhood, you’ll likely hear about this change first at an HOA or COA meeting.
These local gatherings usually provide a great way for busy neighbors to meet one another, too. Some HOAs and COAs sponsor social events from time to time. Whether you reside in a small development, or in a huge HOA composed of hundreds of members, you’ll become better acquainted with people in your neighborhood by attending the community association meetings!