What To Know About Homeowners Associations
Before You Buy Your Nashville Condo
When you purchase a townhome, condominium, or any home in Nashville that is a part of a planned community it is mandatory that you join that community’s Homeowner’s Association (HOA) which is responsible for maintaining the common areas and the building. The HOA charges you either a monthly or annual fee of which is used to upkeep the community. If you are considering purchasing a property that falls within these parameters here are some things you need to be aware of before you decide to submit an offer.
The HOA Fees & What They Cover:
HOA fees are usually based on how elaborate the property is. Average HOA fees usually range anywhere between $150 – $400/month, but it is all relative to how much maintenance is required to upkeep the property. For instance, if a property has a pool, fitness room, water features, gated, etc., the HOA fee will be higher than properties that do not have these amenities. And although all HOA’s vary, it is common that the larger the condo/townhome you own, the higher your HOA fee will be. The following is typical of what HOA fees may cover (if applicable), but you must always check with the HOA to get a list of exactly what the fees cover:
2. Pool/Clubhouse/Fitness Center Maintenance
4. Catastrophe Insurance
5. Pest Control
6. Trash Pick Up
7. Common Area Utilities
Most condominium/townhome properties that are mass metered will cover water utilities, however, in places like Nashville, newer communities tend to have individual water meters and therefore water/sewer is the expense of the owner.
It is also important to find out how often the HOA fees increase and by how much they have been historically raised. See if you can get a print out of the HOA dues from the past 10 years. Be sure to inquire about how much the HOA has in their reserve fund. If there are any upcoming assessments (e.g. new roofing) you want to be sure that there is enough money in the reserve account to pay for it, otherwise the difference will be the responsibility of all the owners.
The HOA Rules:
Learn about the restrictions the HOA enforces and what ramifications there are if they are broken. You can usually access a copy of an HOA’s CC&R’s (covenants, conditions, and restrictions) online. If you can’t access them you can have your Realtor request a copy of them. The CC&R’s should include everything such as parking policies, exterior maintenance policies, pool hours and rules, visitor policies, etc. You should pay close attention to fines and whether or not they can foreclose on you for non-payment of HOA dues. You also need to inquire about whether or not renting out your unit is an option. A lot of HOA’s either forbid rentals or limit the amount of units that can be rented out at one time.
The Catastrophe Insurance:
This is particularly important if you are thinking of purchasing a condo or townhome in Nashville or in an area that is prone to floods, hurricanes, tornados, earthquakes, fires, or any other type of natural disaster. Be sure to find out specifically what kind of damage the insurance covers. In a lot of cases the insurance the HOA has on the building will only cover structural damage and not interior damage so it is important to determine if you will need to purchase supplemental insurance to cover damage/loss of material possessions. Go to the Better Business Bureau for a list of insurance companies in Nashville, TN.
Minutes of HOA Meetings:
Try to see if you can get a copy of minutes from past HOA meetings. The things to look for are current and past conflicts, how they were resolved, and whether or not the HOA has sued anyone. If possible it’s a good idea to try and talk to current owners who are not on the HOA and who have been living there for years to find out how cooperative and accommodating the HOA is with their owners. There can be a lot of politics involved with some HOA’s which in turn can make things far less pleasing to live there.
Keep An Eye Out For Under-Management:
Not all HOA’s are fastidious and over-managed. There are some HOA’s that lack care and concern and have no interest in maintaining or improving the property, making repairs, dealing with resident grievances or being a member of the board. In some cases owners take turns serving as president so be prepared to take on this role even if you don’t want to, if this is the case with the HOA.
Is The HOA Fee Still Feasible?
Most importantly, consider the impact the additional HOA fee will be on you financially. Can you afford your mortgage, plus the HOA, plus your utilities and living expenses? In a lot of cases after figuring in the HOA fee, plus your mortgage, it turns out to amount to what it would cost to purchase that house you think you can’t afford.
Reference: Wikipedia.com, Investopedia.com
If you or someone you know is interested in buying or selling
a Nashville Home please contact:
The Lipman Group | Sotheby’s International Realty
Office: (615) 463-3333 / Cell: (615) 509-1753