Increase the Value of Your Neighborhood
Q: Brent B.– With home values near record lows what can we do as an Association, if anything, to help the appreciation of homes in our community?
Dr. HOA: Home values are on everyone’s minds these days, especially with millions of owners upside down on their properties. While most Americans are confident that home prices will rebound, the uncertainty can be truly unnerving. In the mean time, we encourage Association members to focus on what they can control. Take comfort in the fact that you are part of a Homeowners Association. Associations have an outstanding opportunity to help build a sense of community and neighborhood pride, maintain and make improvements to common areas and enforce community Covenants, Conditions and Restrictions (CC&Rs) to protect homeowner interests and the overall value of the community. There’s very little, if anything, you can do to improve the economy or impact the cyclical nature of the housing market.
We always advise Associations to never underestimate the power of a close-knit community, and the intrinsic value it has on individual properties. When someone is in the market to purchase a new home, more often than not they will spend time in the community, meeting with neighbors and asking about the neighborhood. Optimistic resident with friendly dispositions can absolutely make one community more appealing than an otherwise identical community without the same sense of pride and community. It is also easy to forget that the community entrance is actually the first impression the prospective buyers have even before they arrive to the home. Therefore, it is critical that the Association is managed with a perspective of highlighting the community’s amenities. If the community is fortunate enough to be fiscally sound, the Association may even be able to add amenities or make improvements to the common areas, further increasing the value of the community. Also, given market conditions, take advantage of the fact that contractors are more inclined to provide services (e.g. landscaping, pool services, etc) at extremely affordable prices. Your management company should proactively facilitate this process while the Board ultimately makes the hiring decisions.
Other key benefits should be considered as well. For example, by organizing a welcoming committee for new homeowners or having a social committee that holds regular Association sponsored events (such as barbeques or pot luck events), you are creating a community where neighbors know each other and friendships are fostered. These things can often seem small at first glance; however, this sense of social network and community is extremely appealing to homebuyers. Lastly, Associations have a strong tool to weather the suppressed housing market in their Covenants, Conditions and Restrictions (CC&Rs). With many properties being foreclosed upon or rented out, there tends to be increased maintenance-related issues with individual properties. The Association’s CC&Rs empower the community to enforce and correct maintenance issues through enforcement procedures such as violations and fines. Additionally, if the governing documents allow for it, the Association has the ability to maintain individual properties, preventing one downtrodden home from negatively impacting an entire neighborhood.
**PLEASE NOTE: I AM NOT AN ATTORNEY and the opinions and content provided in this column are not intended to constitute legal advice. YOU ARE ENCOURAGED TO CONTACT LEGAL COUNSEL in your jurisdiction prior to relying in any way upon the information provided herein. Moreover, laws relating to Homeowner Association and the real estate/construction industry are constantly changing and this information may no longer be accurate at the time of publication.