MUD Taxes: Understanding the Charges (and benefits!) When Buying in a MUD
Many communities have a homeowner's association (HOA) in place to help keep the community in tip-top shape. For a lot of homebuyers, though, this is something completely new.
Read on to learn more about HOAs—also known as community associations—and their role in keeping your neighborhood looking great.
What Are HOAs?
HOAs exist to protect and enhance the value of your home “by making sure everyone’s following the rules, all the properties look good, and the community is kept up,” says Brady Hedglin, Director of Development for Kuester Management Group, an association management company headquartered in Fort Mill, SC.
What Do HOA Fees Cover?
Typically, you and your neighbors will pay for maintenance of the grounds and landscaping, pool and clubhouse, walking trails, playground, or other amenities.
Fees may pay for utilities and pest control in common areas, insurance, street lighting, and upkeep of the community entrance.
You can see details about what your HOA fee covers in your community’s “covenants, conditions, and restrictions” documents, or CCRs.
HOA boards make sure all neighbors take care of their homes’ basic needs, such as keeping the grass cut, pressure washing if needed, and storing trashcans away from the curb.
The ultimate goal is to keep your community as visually appealing as the day you first decided to call it home.
For that reason, HOAs usually require a homeowner to get permission before making changes to the home’s exterior. HOAs often have an architectural committee to review proposed additions or modifications to a home, according to attorney Mike Hunter, who represents several hundred community associations in North Carolina.
The HOA protects you as a homeowner, Hunter says, from living “next door to an owner who’s built a geodesic dome or put a statue of a T-Rex in his front yard,” not to mention a driveway full of junked cars or a chain-link fence.
HOAs may deal with parking issues like a long-haul truck driver who regularly parks his semi in a cul-de-sac, homeowners keeping dangerous animals as pets, and behavior that affects the neighborhood, such as an amateur race car driver working on his cars and revving the engines at all hours.
“An HOA is legally required to keep certain records,” Hedglin says. “We can go into our files and pull out statistics that we sent a household 13 violations about an issue” before instituting fines.
More recently, Hunter has been fielding calls from HOAs about how to prevent corporate investors from buying homes and turning them into long-term rentals or short-term vacation lodging. It can be possible to change a community’s restrictive covenants to forbid owners from leasing their home for any term shorter than, say, 12 months.
If you’re not in an HOA-governed community, it’s likely the city or county that would address problems like the racing insomniac with the loud engine. Issues can take longer to resolve.
A city or county government has a much larger geographic area to handle and may not have detailed records to help speed along a solution.
Who Does the HOA Belong To?
Some community associations are self-managed. For those that seek outside help, a third common expense is a management fee for a company like Kuester to handle collection of dues, vendor management, accounting, and related services.
Who is on the HOA board can vary for new communities depending on the phase of construction.
In the Charlotte area, for example, M/I Homes representatives sit on the HOA board while homes are still under construction. Once the new community is fully built and sold, homeowners elect a board entirely of homeowner volunteers, and M/I Homes’ staff is no longer part of the HOA.
Hunter is among those who love living in a community with an HOA for the protections it provides.
In a non-HOA community, you might be powerless against the neighbor across the street who wants to light up her house like the Las Vegas strip. With an HOA, you could get those high-wattage lights dimmed or eliminated and see the stars again.
Having a better understanding of your specific HOA helps you truly understand where your dollars are going and why. Get to know your HOA leaders and get involved where you can!
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