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Looking for a New Luxury Home? Don’t Sign that Contract Until You Do This

by Marquette Turner Luxury Homes

in Investing in Property, Variety

Whether you are looking at new construction luxury homes or previously owned high-end properties, it is important to understand just what you will be getting into when moving into an upscale neighborhood. One of the things that many first-time home buyers aren’t aware of is that some properties, most in fact, are subject to rules and restrictions as governed by a Property Owners Association (POA) or a Home Owners Association (HOA).

Before signing that legally binding sales contract to buy what appears to be the home of your dreams, check out whether or not there is an HOA or POA and then take a bit of time to investigate how that particular association is managed. Many times this is a deal breaker, so be careful.

Beware the HOA Police

Some HOAs are all about being in your business. These are the ones that are managed by a group of ‘committed’ residents who take it upon themselves to literally become the HOA police. It may seem like a joking matter, but to the resident that has overly-zealous HOA board members doing everything but peeping in their windows, it is no joke. If members of the HOA board have nothing better to do with their time than to spy on residents, this is not the community for you.

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The Problem with Under Managed HOAs

Then there is the reverse to worry about. Some HOAs simply collect the required annual dues and do nothing whatsoever for the community. An HOA sets restrictions and regulations to follow within their property development or shared-ownership buildings (i.e. condos and co-ops) but some simply don’t care to enforce any of the rules. When faced with complaints they strategically stall so that nothing ever gets done. You don’t want this either.

Professional HOA Management Is a Plus

One thing you can look for when in the market for a new luxury home is to determine whether or not that sub-development has their HOA managed by a professional third party organization. For example, in North and South Carolina there are HOA Management companies that offer a wide range of services such as assistance for self-managed HOAs, managed HOA services, information on legal compliance and other services including maintenance, collection of membership fees and dispute resolution. There are Federal and State laws which must be upheld, especially in terms of the Federal Fair Housing Act.

What HOA Management Services Entail

If you are looking at a property that has an HOA that is professionally managed, you will most likely find that you won’t be subjected to under or over management and that all responsibilities of the HOA will be handled fairly and impartially based on the association’s guidelines. A professional HOA management team will also help the association become aware of whether or not any of their by-laws are not in compliance with State and Federal rules and regulations. Once you are comfortable with the HOA or POA, you can also be a bit more comfortable signing that purchase agreement.

However, if you are not comfortable with the HOAs self-managed track record that you’ve checked out or are in doubt in any way, take a bit more time before signing the contract. You may be left looking for another home but at least you will also be free from the headaches that come along with a mismanaged HOA.

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