How Florida Homeowners Associations Work
The general idea behind a homeowners’ association (HOA) is that you have a group of people elected by the residents who make up the board directing the homeowners association. The main duties are to 1) represent the best interests of the residents of the community especially in the capacity of protecting home values through the implementation and enforcement of rules, known as covenants and restrictions and 2) to assess and collect homeowners’ fees to help pay for the upkeep of common areas of the community as well as any other areas provided for in the covenants and deed recordings.
Fees and Dues Homeowners’ association dues vary widely depending on the amount of amenities that are provided to the homeowners. Some just cover the maintenance of the common areas including medians, right of ways, lakes, and ponds. Other dues can cover things such as upkeep of the streets (if they are private streets), and streetlights. Some communities negotiate for a group rate on cable TV or Internet access with service providers. You may be charged fees for those services monthly, quarterly, or yearly. Failure to pay your homeowner’s dues can result in the association placing a lien on your property and eventually foreclosing if you get far enough behind on your payments.
As a prospective purchaser in a community, you are entitled to and encouraged to review the budget. When deciding whether a homeowners’ association’s dues are a good deal or not, add up what you think it would cost you to obtain the services provided on your own. Don’t forget the aggravation the association saves you by not having to deal with finding and scheduling the services and vendors yourself.
If you are buying a home in a new subdivision where homes are still under construction, odds are that the developer still controls the homeowners’ association. Until control of the HOA is given to the resident owners, called turnover, which the state of Florida requires to occur when 90% of the units in a community have sold and closed, the developer is still responsible for maintaining the public aspects of the community (streets, common areas, etc.) and carrying out the duties of creating a budget for the Association and setting HOA dues accordingly. Oftentimes the developer will over-subsidize the budget, in order to keep the initial HOA fees low, in an effort to attract more buyers. But when turnover occurs, and the developer is no longer subsidizing the budget, homeowners can be hit with a sharp increase in their HOA dues. Before purchasing in a community where the developer controls the HOA, make sure that you carefully review the budget to make sure everyone is paying their fair share, or if that is not the case, try to reasonably figure out what your dues might be when control of the development turns over.
Common Rules and Regulations Another aspect of communities with homeowners’ associations is that most involve rules and regulations, or covenants and restrictions (C and Rs) also referred to as covenants, conditions, and restrictions (C, C and Rs). Be sure to ask for a copy before you sign any purchase agreement, and make sure that the agreement is contingent on (depends upon) your understanding and approval of the covenants and restrictions and rules and regulations. Some common rules and regulations that may be included in the documents are rules regarding:
Fences Some communities have restrictions on what type of fence you may have, the material it can be made of, how high it can be, or if any fences are allowed at all. If a community you are considering does not allow fences at all, and you have pets that require being fenced in, you might have to consider an invisible fence.
Playground or sports equipment Basketball hoops are not allowed in more and more communities, while some allow portable basketball hoops as long as they are stored in the garage when not in use. Swing sets and slides are also commonly not allowed because of how they can deteriorate in appearance, and in maintenance-free communities where lawn care is included they are a hindrance to the easy cutting of your lawn.
Parking Overnight or long-term street parking are often not allowed. This is as much a fire and police safety issue as it is an aesthetic issue. Boats and trailers are usually not allowed to be stored outside, so you must find room in your garage or park them offsite.
Changes to the exterior of your home Most homeowners’ associations require that an architectural or design review committee approve any changes you wish to make to the exterior of your home. This includes things such as adding a screened-in patio, swimming pool, or painting your home a different color. Even changes to your landscaping must sometimes be approved.
There is usually a form they have you fill out on which you must describe in detail any changes you plan to make, including a list of materials to be used, who will do the work, and so on. You are also typically required to submit any drawings or plans that show how the change will look when complete. This is to keep everything in the neighborhood looking nice and congruent.
Pets Some communities have restrictions on the number of pets you may have in a home, as well as the size. These are typically implemented to reduce the number of potentially aggressive dogs such as pit bulls, and are most common in condominiums or townhouses due to the close proximity of your neighbors. Also, most communities and municipalities now have rules requiring you to pick up after your pets. Be mindful of these rules and laws, especially if the area you are moving from had no such ordinances, as you can be heavily fined for ignoring them.
Protection of home values It can sound like a pain to have to pay these fees and abide by these restrictions especially if you are coming from a community that doesn’t have any fees or restrictions. But all these fees and rules, as inconvenient as they may sometimes seem, do serve the important purpose of protecting your home values. If you are going to pay a quarter of a million dollars or more for your new home here in Florida, you want to know that someone is looking out for you and your investment. Ask any reputable real estate agent or property appraiser and they will tell you that communities governed by homeowners’ associations have the best track record of preserving and increasing home values.
Deciding if an HOA is for you So, based on the above information, do you think a community with a homeowners’ association is for you? If you’re at all like me, the answer is a resounding yes. I like knowing that my best interests are being looked after and my home value is being protected. You basically just have to weigh out the pros and cons of living in such a structured environment. While it’s not for everybody, I think that most people, especially boomers such as you will ultimately choose to live in and be happy in communities with a homeowners’ association. I think it’s best for your lifestyle and the future value of your property.
Condo Association Fees As an owner of a condominium you will be responsible for paying condo fees. Before buying a condo, make sure these fees have been explained to you in writing. You should also ask to see the budget. When buying a resale condo in Florida you have a three-day “cooling off” period (7 days for new condo construction) during which you may ask to cancel your contract. This is so that potential condo buyers have ample opportunity to examine and understand the condo fees, rules, and budget. Remember though that this only applies to condos, the same “cooling off” period does not apply to any other type of property.
The condo fees are collected to pay for things like maintenance of the exterior of the condo, including insurance on the building, maintenance of the common areas, such as the grounds, swimming pool, and other amenities. Quite frequently in a condo the condo fee includes water, sewer, and garbage service. This is often more convenient for you: almost no one complains about having a few less checks to write.
Special Assessments Eventually, if you live in a condo (and even with a homeowners’ association) long enough, you may fall prey to what is called a special assessment. A special assessment is sometimes a necessary evil, and is used to pay for items such as a new roof or unexpected repairs beyond ordinary maintenance. Your condo’s budget should have a reserve set aside for unexpected events, but sometimes if there is not enough money to pay for what needs to be done, unit owners will be assessed. If you are on a shoestring budget or have a fixed income with little reserves, you may want to rethink a condo because just one special assessment can put you in the red.
Also note that failure to pay any of your condo fees or special assessments can result in the condo association placing a lien on your property, which can eventually lead to foreclosure.