Before you sign on the dotted line to purchase a single-family home, townhouse, or condo that has a homeowners association, you should be aware of the particulars of that governing board in terms of covenants, restrictions, services, fees, assessments, and fines. The purpose of this organization is to provide a common basis for preserving, maintaining, and enhancing homes and property. Since most homeowners' associations are non-profit corporations, they are subject to state statutes that govern such groups.
Covenants, conditions, and restrictions: The HOA sets down covenants, conditions, and restrictions (also known as CC&Rs) that govern the use of property within the community. A wide variety of items can be controlled by these restrictions, including exterior paint color, the number of vehicles that may be parked at the residence, the age of the residents, and the use of common property. Since CC&Rs vary greatly, especially in terms of scope, strictness, and enforcement from one community to another, it is important that you are familiar with (and accepting of) them before agreeing to buy a particular Tampa FL home.
Fees and assessments:
- HOAs charge a monthly fee that must be paid by property owners. HOA fees are almost always levied on condominium owners, but they may also apply in some single family neighborhoods. The fees each unit pays are applied to annual operations such as landscaping, water, insurance, property management, pool maintenance, and the like. Any excess HOA fees that exist after paying for pertinent services as described above are stored in an account and are called reserve funds. HOA fees can vary widely depending on factors such as community amenities and how effectively the reserve fund is managed.
- Occasionally, homeowners associations need to levy what are called special assessments. Special assessments are a one-time required expense to pay for significant maintenance or repairs (i.e. a new roof for the building, façade brick repainting, etc.). Low monthly HOA fees, or inadequate reserve funds, have the potential to lead the owners of Tampa FL homes into a situation where a special assessment is necessary to cover large expenses.
- Failure to pay the required fees and/or assessment will most likely result in fines, liens, or even, in extreme cases, foreclosure.
It is important that you know how HOA restrictions and fees will impact your finances and your life. Click here for tips on dealing with such organizations.