I remember moving to Florida and noticing multiple communities as we traveled around learning the area. They had beautifully landscaped entrances that gave way to gorgeous homes, the brick or stone entryway proudly emblazoned with the neighborhood's name. That name is usually written in an elegant script and you somehow understand that if you lived there, you'd be living your best life. Then, more times than not, there is a sobering box underneath it with a font that is much more serious stating "Deed Restricted". I'll be honest... I did not know exactly what "deed restricted" meant. Do you?
Typically, "deed restricted" means that a community is a neighborhood with a governing homeowner association (HOA) that enforces certain rules and regulations regarding the look of a neighborhood, as well as property uses. There are lots of pros and cons but what I found the most head-scratching was their huge differences. There is no governing body that governs HOAs so each one in each neighborhood can make it's own rules... or have no rules at all. There are lots of things they can do to help you and lots of things they can do to make you want to move.
What you need to know:
Before you buy in any neighborhood, the listing agent or the HOA itself will be able to provide all of the information you will need regarding the rules and regulations. Besides what you can and can't do with and to your property, you'll want to note the HOA fees and the schedule they are paid on. Some require a small annual payment (maybe just for upkeep of that beautiful sign) and some require hundreds of dollars monthly. Of the communities with higher fees, you sometimes get other services (trash removal, WiFi, cable, etc). Definitely take the time to explore the community and it's fees. If you are financing, the HOA fees could make your monthly payment unmanageable.
- What I love the most about HOAs is that they keep the resale value of your home intact. In some neighborhoods, you may find a mansion next to a shack. The shack can have a huge impact on the sale price of the mansion it resides next to. HOAs and their requirements help retain a more uniform property value throughout the community even when the homes are different shapes and sizes. More often than not, they also have and maintain community pools, docks and clubhouses solely for their residents' use.
- When HOAs offer services, many times they are able to negotiate rates that are lower than you would be able to negotiate on your own. When HOAs provide, for instance, trash removal, cable and WiFi, you may find that the rate you pay to your HOA is far less than you would pay in those monthly bills.
- If you are not a full time resident at your home in Florida, your HOA can be invaluable in making sure your home is maintained.
-HOAs can be horribly restrictive. Some reserve the right to approve the color you choose to paint your home, your shrub height, whether you can have a fence, how many and what size pet you can own and what your mailbox looks like... just to name a few. If you like order, this may be something that appeals to you. For most, a home is the largest purchase they will make. Having a governing board of neighbors tell you what you can and can't do on your own property has proven to be maddening for some.
- The fees for some HOAs can be astronomical, leaving residents hard pressed to understand where the value lies.
- Sometimes homes in deed restricted neighborhoods are much more difficult to sell when the time comes. When buyers are telling agents what they want (three bedrooms, two bathrooms, a pool), many times they say, "Oh... and no HOAs!"
Buying a home can be such a wonderful and exciting experience. To be sure you love it for years to come, please be sure to consider what your neighborhood will be like long term. To HOA or not to HOA... that is (at least one of) the question(s)!