In a nutshell:
A homeowner's association (HOA) is a private association that manages a planned community or condominium. When you purchase a property that is managed by an HOA, you agree to abide by the HOA's rules and pay it's monthly or annually HOA dues.
Pros of being part of an HOA:
- HOA's are in place to maintain the appearance of your property as well as other properties in the community
- HOA dues go towards a reserve fund to address common area repairs, major renovation projects and emergency use
- Well maintained amenities are also provided such as landscaping, pools, tennis courts and barbecue pits
Cons of being part of an HOA:
- Depending on the HOA, the monthly or annual dues can be high
- HOA rules may be restrictive on what you can do with your property especially if you decide to make renovations
- There can be conflicts amongst HOA members in order to reach a consensus on maintenance needs or upgrades to the community
What is HOA litigation?
HOA litigation is when their is a lawsuit against the HOA for any of the below reasons:
- Construction defects
- Personal Injury claims
- Discrimination claims
It is important to note that while the HOA is under litigation, it can be very difficult for new buyers to obtain financing. Though, in many in cases the seller's agent will usually have a preferred listed of lenders they can recommend to get financing.