Homeowner’s Associations (HOA’s) and Community Development Districts (CDD’s) carry a lot of confusion in the home buying arena. Many Realtors are looking to explain the pros and cons of both to their clients in hopes that they make an educated decision.

Waypoint Real Talk is joined today by Realtor Crystal Brady who shares her expertise into HOA’s and CDD’s so, you can make an informed decision.

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Let’s talk about the differences between an HOA, deed restrictions, CDD fees, and some pros/cons of having these fees vs. purchasing a home in a neighborhood without them.

What Is A Deed Restriction?

A deed restriction, also called restrictive covenants, limits what you can do with the real estate. They are outlined in the real estate deed.

These restrictions are typically put in place by the land developer and can have additional restrictions besides just what the county/city regulates.

An example of a deed restriction is being allowed only 3 dogs per household, or only one family home per lot.

However, deed restrictions can be difficult to enforce since there typically is not a governing body like an HOA.

What is an HOA Fee?

Homeowner’s associations are governing bodies that enforce deed restrictions.

Homeowners pay HOA fees which empower the governing body to enforce the rules of the neighborhood.

Typically, HOA’s are responsible for maintaining the grounds, amenities, and common areas. Also, in most cases, HOA’s are ran by property management companies (this is not always the case).

What is the Average Cost of an HOA?

HOA costs can really vary depending on the amenities, common grounds, and exterior maintenance the association is responsible for.

To illustrate, some HOA’s might include water in their HOA fee and have a pool, clubhouse, etc. On the other hand, another HOA might only include exterior mowing and vegetation maintenance.

Costs of HOA’s usually range from $200/year to $1,500/year.

Before signing a contract you should request to read the HOA documents which comes in an HOA disclosure. In the HOA disclosure you can see how much money the HOA has and the rules of the community.

Advantages of Having an HOA

While there are negatives of having enforced rules, there are many benefits that homebuyers may not think about.

Here are the pros of having an HOA:

* Deed restrictions and community rules are enforced.* ALL homes in the neighborhood are well maintained.* Exterior changes to the home must be approved by HOA.* Amenities (not always, but often there are amenities).* Preserves neighborhood property values.* Can promote more community relations.* You don’t have to confront your neighbors over issues with their home’s appearance.

To most home owners, the best advantages are preserving or increasing property values by having a well maintained neighborhood, amenities, and not having to confront your neighbors.

Disadvantages of Having an HOA

As mentioned, there are disadvantages. Let’s take a look.

* You must follow the rules.* You do not have freedom to do everything you may want to do with your home.