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Thursday, 19 February 2015
Know Your HOA-Part 1
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If you're looking for a home in the Brentwood, Tennessee, area, odds are you're going to become interested in homes that are situated in neighborhoods governed by an HOA, or Homeowners Association. According to Community Associations Institute, one in six Americans live in an HOA neighborhood, and since the 1990s, four out of five homes have been built in an HOA neighborhood.

The initial documentation of a Homeowners Association begins with the developer of each individual neighborhood. According to Hoa-usa.com, "The restrictive covenants prepared by the developer are filed on the deed records and are legally binding. The restrictive covenants are intended to define the standards of the community for the purpose of protecting property values."

Once a neighborhood is near completion, administration of these codes and guidelines is then shifted to an elected board of property owners in the neighborhood. They will be the ones to collect voted-upon dues, or they will choose a professional management company to handle some of those details. Either way, be sure you keep a record of where to make your payments so you don't get behind and start receiving notices. Because of a new law in Tennessee, HOA transfer fees are built into a real estate contract as a fee for the buyer, which means they are no longer negotiable. This also means that you need to make sure you're clear about when you'll need to take over payments once the home is yours.

Homeowner fees mainly go to cover maintenance of common areas, and it is important for them to also collect enough for a reserve fund to handle bigger problems when they arise without having to borrow money to make repairs. Some property owners pay as little as $10 a month if they are simply helping maintain a front entry or a walking path, but neighborhoods with amenities such as a pool or clubhouse will raise that monthly or quarterly fee significantly, so be sure to know what fees you are responsible for so you can factor that into your budgeted living costs.

In Part 2 of my post on HOA's, I'll explain how you can be involved with decisions and the legal rights they have to your property.

Jarod
jarod@realtracs.com
615-669-8265

 

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Posted on 02/19/2015 11:08 PM by Jarod
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