Is your home owners association ripping you off?

The condominium form of real estate ownership typically allows owners to forget about mowing the lawn, trimming the bushes, and things like keeping gutters clear.

In some condos, you get even more. Neighborhood pool and tennis, a clubhouse, and freedom from all exterior maintenance.

But all this freedom comes at a price, and you may be getting ripped off.

Our own Fox 5 Real Estate Expert John Adams is here to cover the pros and cons of your HOA and help you decide if you are getting ripped off.

The concept of a mandatory Home Owners Association became widespread when attached condominiums became popular in the 1980s.  

The idea is based on the principle that economies of scale can be achieved in a dense community of owners by letting one contractor handle the landscape maintenance rather than having 100 different owners trying to mow their own little patch of grass.  

By forcing every unit to pay monthly into the HOA, the community looks good all the time and theoretically saves money over everyone doing it themselves.

In addition, the HOA is often responsible for jointly owned areas such as the roads in the complex, the swimming pool for residents, and perhaps for maintaining the clubhouse (if there is one.)

Finally, the HOA often owns and maintains the exteriors of buildings, including common areas and roofs. By centralizing all these expenses, a smart association can plan ahead for major expenses (like roof replacement) and avoid charging owners large one-time fees (called assessments).

In theory, the HOA sounds great. But it is run by humans, and that can create problems. Home warranty provider CINCH conducted a nationwide study of owner satisfaction with HOAs.

Here’s how Georgia HOAs measure up to those in other states:

· Georgia ranks No. 9 in the most HOA complaints.

· Georgia also ranks No. 9 for having the most corrupt HOA boards.

· Georgia ranks No. 8 for the most expensive HOA fees in the country.

The national average HOA averages $286 per month, making Georgia HOA fees $211 above the national average.

That’s over $2,500 per year per unit that Georgians are being overcharged. And that can pay for a heck of a lot of lawn mowing.

 HOAs in Georgia are expensive because they are run by human beings who have been given power. In fact, it is absolute power, and that corrupts absolutely. The Board of Directors of your HOA has the rights to set rules and regulations that must be followed.

Here are examples:

· Assigned parking spaces. If you get caught parking in the wrong place, the HOA can fine you $200 or even more.

· Assigned color of window treatments. If your visible drapes are brown when they should be white, you can be fined $200 or more.

· Rally round the flag, boys! If the HOA says no flags or banners may be displayed, and you display Old Glory, you can be fined heavily.

And here’s the kicker: if you don’t pay up, the HOA can typically place a lien on your property and prevent you from selling it until the lien is satisfied. And if push comes to shove, the HOA can actually FORECLOSE on your property, selling it to the highest bidder. And yes, that has actually happened in Georgia.

The problem is too much power and no accountability.  

If you live in a community that is governed by a Home Owners Association, it’s important for you to attend the meetings and offer your experience in association management. Become a volunteer and get on the board of directors. A mandatory homeowners association can be a good thing, but only if it helps the community. 

Atlanta native John Adams has been a real estate broker and investor in residential real estate for the past four decades and has seen the market go up and down and back up. He hosts "The Real Estate Coffee Break" every Saturday at 11 a.m. at www.RealEstateCoffeeBreak.com, where you will find free special reports on BUYING A HOME and SELLING A HOME. John believes that, for most Americans, the best investment they will ever make is their own home.  

John Adams will be here for the next hour to answer all your real estate questions on our Fox5 Atlanta Facebook Page. He is happy to field all real estate questions, not just those related to today’s topic.