Homeowners’ Associations (HOAs) are essential in condominium developments or apartment buildings, where a property is split into several dwellings and ownerships.
In some cases, individual owners of these dwellings also own the common areas. In other cases, for example in a resort condominium where there is a hotel, the ownership of the amenities is retained by the landowner or hotel.
A HomeOwner’s’ Association (HOA) exists to ensure that all the common areas of such a property are maintained to a high standard.
The HOA does this by coordinating homeowners' payments for necessary repairs and maintenance work on the common parts. The homeowner remains responsible for the costs or repairing and maintaining their own condo.
HOAs are a pretty important part of condo ownership, so let’s explore exactly what a HomeOwners’ Association does in some more detail.
- Shares the Maintenance Responsibility for the Property
- Ensures Major Projects Are Completed
- Protects and Enhances Property Asset Value
Shares the Maintenance Responsibility for the Property
One in five Americans live in a home that has an HOA, so it’s important to understand exactly what HOAs do. In a condominium development or apartment building, everyone lives within the curtilage of the property and shares common space. So, it’s only right for everybody to share in the responsibility of the upkeep of the common areas and facilities.
As time goes on, the cost of maintaining them increases. You’ll be required to pay fees that cover the maintenance and repair of communal amenities and facilities such as a pool or gym.
As all homeowners pay into the HOA, reserve funds will accrue over time which can be used to pay for any extra expenses that might be needed. This could be anything from a roof repair toa new entrance, if one needs adding to the building or property.
However, it won’t be the owners’ responsibility to carry out the work. That job generally falls to the management company, with the HOA helping to specify works and then coordinating funds and payment on behalf of owners.
Between the HOA and the management company the shared amenities and common parts are kept to a high standard for the benefit of owners and hotel guests alike.
Owners can then just enjoy their home knowing it is in good hands. The same applies to vacation condos, where knowing your property is being cared for while you are away is even more important.
Ensures Major Projects Are Completed
As time goes on, the HOA might issue special assessments if they have insufficient funds to carry out a major project. This could be something that can potentially add value to the entire property and benefits everybody involved.
HOA committees are invariably represented by a mixture of condo owners and other significant stakeholders. These committees then strive to protect all other property owners and ensure the property as a whole is well-maintained. Who better to run a community than the people living in it or those who are directly involved in its operation - as opposed to a landlord you’ll never see.
If you own property in a condo hotel, your HOA fee could be covered by rental income when you are not in residence. Sometimes, property costs can be tax-deductible as a rental expense.
Protects and Enhances Property Asset Value
Although HOA laws can sometimes seem strict, they are there to protect property values and owners’ interests. It might seem like just another cost to think about, but clearly the HOA is for the benefit of the entire community.
The work the HOA does improves the quality of life for all residents and helps to protect property asset value. This makes the condominium development, apartment building or resort a good place to live and a well-maintained property is vital if you eventually want to sell.
But for you to receive all the benefits and support of an HOA, you also need to comply with its rules and regulations.
Fees, property asset value and what are the advantages of having an HOA are just some things you might want to know aboutHOAs. It’s essential to know how they work alongside ownership of a condo, particularly if you are buying a condo in a condo hotel. That's why we’ve created a resource that has the finer details.
Discover More About HOA and Condo Hotel Ownership
HOAs are essential when you own a resort property in a spectacular vacation destination. That’s why we’ve created a visual guide for everything you need to know about owning a condo in a condo hotel resort, from HOA to how the condo hotel model weighs up against fractional ownership or renting out your vacation home yourself.
It shows how condo hotels make vacation home ownership a breeze. From their relationship with prestigious hospitality giants like Hilton to how they can make great rental properties, click below to get access and start your journey.