HOA 101- What You Need to Know
Thinking of moving to Myrtle Beach, you will notice many communities have an HOA. This can be a positive or a negative to some buyers. Some might view an HOA as a way to keep the community easily regulated and kept up nicely. Others might view an HOA as a hindrance to their property with the many rules and regulations that come with owning in an HOA community. Regardless of what side you fall on here is a quick knowledge check to make sure you understand what an HOA is and how it works.
A homeowners association is a not-for-profit organization that maintains the communities common areas and guidelines to enrich property values while offering benefits to the homeowners. An HOA is governed by a board of directors generally residents of the community that volunteer.
1. Rules, Regulations, and Governing Documents
When purchasing in an HOA community homeowners will receive the Governing Documents for the community. These are the foundation documents of the community and generally will state the articles of incorporation, rules and regulations, and by-laws. These legal documents will state the obligations of the HOA and of the homeowners. In the articles of incorporation, you will find information about the legal name and location of the Home Owners Association. The Covenants, Conditions, and Restrictions, will state the rights the association and homeowners must abide by. The by-laws will show how the association is set up and includes information about the board members and their responsibilities to the association. Rules and Regulations are a part of the CC&RS but will state more clearly what the association expects from homeowners and vise versa. It will state important information on regulations regarding property changes, landscaping, parking, pets, and more.
2. HOA Dues and Assessments
Along with these documents you will find the Assessments and HOA dues for the homeowners. All members of the HOA will be required to pay any mandatory assessments. You will want to know the total cost you will need to pay along with if it will be paid monthly, quarterly, or yearly. It’s also important to find out how the amount is determined by the association.
3. Budgets and Reserves
It’s important to know where the money is going and how funds are used in the association. The balance the association holds in reserves is important to know in case of unexpected expenses. The reserve will ensure that you as a homeowner won’t have to pay any special assessments. Inquiring about any current or pending litigation is important to ensure you aren’t receiving any additional fees or special assessments.
Once you know the community you’d like to buy in has an HOA, you should ask your real estate agent for all of the HOA documents and information. Your real estate agent will be able to access any additional information needed to help make sure you are confident in purchasing your new home. Your real estate agent is there to help guide you through the buying process. Staying informed as a buyer will help ensure you are happy with your new purchase and avoid any additional fees from the Home Owners Association.