In our area an HOA can make (but mostly break) the reputation of a community. To learn more about why that is, we turn to Ed Collins. Ed currently serves as president of the Madison Homeowner’s Association Network and Director for the Alabama Concerned Homeowner’s Alliance. Check out Ed’s tips and advice in the video below:
Have you ever wondered who takes care of the landscaping that does not fall on anyone’s property lines in your neighborhood? Who makes sure the pool, the fitness facilities, and the walking trails are maintained within a community? Or, who is going to deal with “that house” on the street that strongly resembles the one behind “The Bates Motel”? Enter the Home Owner’s Association (HOA).
An HOA is a non-profit organization comprised of community homeowners who’s purpose is to take care of community property and amenities. Sort of like a “neighborhood watch”, but without the crime solving. HOA’s are most common in “planned communities” or builder developed communities.
Most issues facing homeowners in an HOA community stem from the fact that Alabama, has no set laws regulating the actions of an HOA. Currently, they’re mandated by corporate code which is dealt with in civil law suits. (Civil: being the stuff you see on “The People’s Court”, or as Ed so eloquently states, “If you don’t like it, sue me!”) Add to that the limited training and resources provided to HOA board members about running an HOA or Non-Profit, and suddenly it becomes obvious how these things can get “messy”.
HOA’s are initiated by the builder or developer until the community is mostly finished – at which point they’ll transfer ownership of the HOA to the homeowners. It’s understandable that the developer wants to see his or her project to near completion, and therefore may want to oversee the HOA until that time. However, there have been instances where homeowners end up paying years of HOA dues only to find that the “pool” or “walking trails” were not included in those dues, and now homeowners are being assessed thousands of dollars for planned community amenities. This is why it’s generally frowned upon for a “for profit” organization to spear head a “non profit” that stand to directly profit from.
Of course, not all HOA’s pull these shenanigans, however it’s extremely difficult to identify which HOA’s are thriving because of the lack of state regulations and transparency of the HOA’s actions. This is a primary reason that homeowners and home buyers need to be cautious when deal with buying into an HOA community. So what can you do to protect yourself?
- First, if you’re buying into a community with an HOA, PRESS for copies of the covenants and restrictions as well as financial statements. (A good realtor will do this for you.)
- Second, ask current residents about the HOA – you might uncover pending legal action you wouldn’t have known about otherwise.
- Ask/Advocate for transparency you want to know that even after seeing the initial covenants and restrictions, you want to know that meeting minutes, financial records, or “projects” information can be obtained from the HOA without a huge fuss.
- As a buyer, if you run into an HOA that won’t provide you with copies of these documents, save yourself some major headache and move on to the next community
- visit www.alabamahoa.org for information and advice on how to deal with current HOA problems.
Keep in mind, not all HOAs are “out to get you”. Some are well run, helpful organizations. The trouble is, it’s not always easy to determine the “good” from the “not so good”. So be sure to do your homework, or choose a real estate agent who can do it for you! A well informed consumer is a happy consumer!