Homeowners Associations (HOAs) come with both advantages and disadvantages, so this article will cover how living in an HOA community can help maintain property values, swimming pools, and tennis courts, as well as enforce HOA rules while living within an HOA Community. Many of the popular Chicago neighborhoods like Logan Square, Lincoln Park, and Wicker Park have a high percentage of properties that belong to an HOA community, but your local Chicago real estate agent can provide better guidance on a specific property and if the HOA dues, living in an HOA, HOA meetings, and if the community rules are acceptable.
Living in an HOA: Is It for You?
About 25% of the population of the United States lives within community association-based organizations. As such associations are commonplace, many HOAs provide much value to the residents and owners. If you have never experienced living in an HOA community, you may wonder what makes them popular. Are HOAs a viable option to consider?
Here’s a list of 10 pros and cons associated various aspects of living in a community with an HOA:
- Maintenance and Amenities:
- Pros: HOAs often care for common area maintenance, including landscaping, pool upkeep, and community facilities like gyms or clubhouses. This can result in well-kept and attractive common areas.
- Cons: These amenities and services come at a cost typically covered by homeowners’ association fees. High fees can be a financial burden.
- Property Value:
- Pros: HOAs can enforce rules that help maintain property values by ensuring homes are well-kept, and the neighborhood looks attractive.
- Cons: Strict rules can discourage some potential buyers, and a poorly managed HOA may negatively impact property values. Also, in some situations, HOA rules can become overly restrictive and burdensome for homeowners who want the freedom to do what they want with their property.
- Conflict Resolution:
- Pros: HOAs can provide a structured process for resolving disputes between neighbors, reducing the likelihood of prolonged conflicts.
- Cons: The dispute resolution process might not always be fair, and some homeowners may feel that their rights are being infringed upon.
- Community Standards:
- Pros: HOAs establish and enforce community standards that can help maintain a uniform and aesthetically pleasing appearance and ensure the common elements are maintained, trash cans are emptied on a regular basis, and all the amenities are maintained.
- Cons: These rules can be restrictive and may infringe on personal preferences and freedoms.
- Security:
- Pros: Some HOAs invest in security measures such as gated entrances, surveillance, and private patrols, which can enhance safety.
- Cons: The cost of security measures may increase HOA fees, and crime’s not guaranteed to be completely eliminated.
- Fees and Assessments:
- Pros: HOA fees fund essential services and amenities.
- Cons: High HOA fees can be a financial burden, and assessments for unexpected expenses can catch homeowners off guard.
- Limited Control:
- Pros: HOAs handle common area maintenance.
- Cons: Homeowners have limited control over decisions made by the HOA board, and these decisions may not always align with individual preferences.
- Enforcement Disputes:
- Pros: HOAs provide dispute resolution.
- Cons: Disputes with the HOA over rule enforcement can lead to tension and legal battles.
- Change in Leadership:
- Pros: Leadership changes can bring fresh perspectives and ideas.
- Cons: Frequent changes can result in inconsistent management, and some board members may not have the community’s best interests at heart.
Should your HOA be self-managed or hire a professional management company?
In the state of Illinois, a community association manager license is required by the Illinois Department of Financial and Professional Regulation to manage an HOA Community. Larger HOA Communities tend to outsource the property manager to ensure that strict guidelines are enforced, and all residents enjoy access to the amenities. An HOA-managed community with only a few units, may need to collect more HOA dues to afford a professional management company, however poor management amongst the owners could really affect the value of the HOA community.
Why do HOAs have so much power?
HOAs have powers since their associations grant them rights and privileges voted on by the individual owners. HOA’s power comes from documents created by associations, intending to maintain the HOA with the highest standards created equal for all unit owners. This gives HOAs the power to define regulations on a property. In addition, the documents allow HOAs to apply these rules.
What is included in most HOA fees?
HOA fees usually cover the cost of maintaining common areas such as lobbies, patios, pest control, legal fees, and insurance. The monthly dues may cover expenses for utilities like water, sewerage fees, or waste disposal costs. In larger community associations, your hoa dues could also cover items like golf courses, fitness centers, and clubhouses.
What is the point of living in a HOA?
Neighborhoods: The association of homeowners ensures that the communities have the required décor and appearance for the residents. Generally, it is a pleasant neighborhood. Amenities for Members: Community HOAs may include amenities such as pools, playgrounds, or community areas.
Which states have the most HOAs?
In 2023, Florida will have the largest number of housing units with HOA membership. Approximately 45% of all homes are HOA-type homes in Florida. The state has followed Colorado closely, with 893K homes on 2.3m homes in a HOA – 38.6%.
What are the disadvantages of having HOA?
HOAs are often a great place to live for various reasons, including comforts, maintenance, security, and aesthetic appeal. However, these can come with disadvantages, such as fees or limited access to services, conflicts, or bureaucracies.
Limited Landscaping Management Duties
The HOAs are responsible for landscaping and maintaining the communal space in general. This reduces ownership costs, increases curb appeal, and possibly raises the value of the property in your neighborhood, and speeds up the sale of your property. Depending on what area of the country you live, HOA communities could also include snow removal.
Community Covenants and Rule Restrictions
Generally, HOAs have community covenant and regulation restrictions (CC&R) imposed which may limit what can and cannot be incorporated or painted into the home, when the owner or tenant can park the vehicle or if the home may be leased or not. It is crucial to note this is because these regulations and limitations are enacted to maintain community order and curb appeal. Nevertheless, if you are interested in living in an HOA community you will need to read their rules and covenants. Your real estate agent will be able to explain the documents.
HOAs Might Cover Certain Utility Charges
Buyers wishing to reduce the cost of their mortgage should be aware that homeowners association dues can be used for water, waste and gas as they are billed. However, each community is unique, but perks are listed under the manager’s contracts or by law.
HOA Community: Association Fees
Monthly homeowners association fees can be fairly cheap or extravagantly costly, based on location, age or condition of the building, and all of the amenities offered to residents. The association could levy specialized assessments for major renovations or disastrous events.
Chicago HOA Management Company Options:
Many HOA communities in the city of Chicago choose to self-manage, which means the individual unit owners would be responsible for maintaining the building, enforcing rules, special assessments, and resolving any neighborhood disputes involving multiple HOA members. In a situation where the condo complex is self-managed, it’s important to review the HOA documents and the budget to determine if any financial issues or structural issues are being discussed.
Community Associations Institute: HOA Living
For the eighth time within a span of 15 years, individuals residing in homeowners associations, condominiums, and housing cooperatives have expressed a profound level of satisfaction with their communities:
- A remarkable 89% of residents have rated their overall experience with their community association as either “very good” or “good” (70%), or “neutral” (19%).
- An impressive 89% have indicated that the members of their elected governing board are either “absolutely” or “largely” serving the best interests of their communities.
- A substantial 74% have affirmed that their community managers consistently provide value and support to residents and their associations.
- An overwhelming 94% have attested to the fact that the association’s rules either protect and enhance property values (71%) or have a neutral impact (23%), with a mere 4% asserting that these rules are detrimental to property values.
In summary, homeowners associations have the potential to provide a well-maintained community with shared amenities and a structured dispute resolution process. However, they can also be associated with high fees, strict rules, and limited individual control. Whether an HOA is a pro or con depends on personal preferences and priorities. It’s essential to thoroughly research and understand the HOA’s rules and financial obligations before buying a home in such a community.