Obtaining concrete advice on the matter of Home Owners Associations is a difficult one for the average home buyer, and their discovery of whether or not it is a good idea to belong to one is usually realized long afterafter closing escrow. Also known as ‘common interest communities,’ HOAs were originally created in the 1960’s as a way for land developers to market and sell their homes, many HOA’s in communities around you have been in place since then but hopefully with its purpose having evolved to protect the value of the property within it. Unfortunately, due to over regulation or self-serving enforcers at the helm of the HOA board, this is not always the case. Across the country, legal disputes between property owners & home owners Associations occurrence with abundance which is why it is of paramount importance to know what type of association you are getting involved with when you purchase a home.
One way to educate yourself to the implications of belonging to a certain HOA if you buy a home is already stated in the contract you signed to purchase called the Offer & Acceptance agreement. In the State of Nevada this is located on Page 3 line 35 whereas the seller is responsible for providing the buyer HOA information through the title company for review prior to closing escrow. Within 5 days (unless otherwise agreed upon) of opening escrow, the title company will provide you, the buyer, the HOA packet which contains agenda, minutes, rules & regulations and anything else you may need to understand if the home owners association you are about to be a part of is a functioning one or not.
Here is the hard part though; are you ready? You have to read them… I know, it’s asking a lot but I only do it cause I love you. Read the minutes and you will have a clearer picture of the current issues the HOA is facing and more importantly, how that board of people choose to address those issues. Should you seek further validation as to the legality of board actions & practices, one only needs to comb through the Nevada Revised Statutes for clarity.
Secondly determine if there is an assessment whereas the HOA is receiving money from owners on top of their dues to remedy a problem or whether it is to add value to the community or both! You will want to know how frequently these assessments occur. If you are going to belong to a home owners association, you want it to be a stable one.
Lastly, and this can apply more broadly: To find peace with your decision on which home you are buying you must look at your lifestyle: Is having land important to you? Is using your land in sync with parameters of an HOA? Do you want amenities in your neighborhood such as a pool, golf course, gym or clubhouse? Does a gated community give you peace of mind? or do you like the idea of more space between you and your neighbor? Do you mind paying $160-750+ in HOA fees to have said amenities? All very valid questions that I cannot answer for you and there will be many important decisions you must make during your next home purchase and the question of belonging to an HOA is, in my opinion, one of the most important.
I’ve left you with the right tools, compliments of your trusty real estate advisor to make a truly informed decision. For those of you who already belong to an HOA or do not want to lose a home you are in escrow for because of it, know that one person can make immense positive impact by joining their home owners association. Yes, anybody can do it so go ahead and be that change you want to see in the world… or your own neighborhood anyway.
Authored by Devin J Reese, CRS, REALTOR
Re/Max Gold – Reno, Nevada
*Home pictured is in the Harbour Cove Community in an HOA located in Sparks, Nevada
*Intellectual property not to be circulated without the written consent of its Author
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