Do all townhouses have HOA fees?


A reader who is a would-be property investor contacted me recently to ask if all townhomes have Homeowners Association fees. The question arose because the reader was considering a number of different properties as their first investment. Two of the properties were townhomes, one of which had HOA fees and one which didn’t.

Do All Townhouses Have HOA Fees? No. Not all townhouses have HOA fees. Some townhouse complexes have communal areas, managed by a Homeowners Association in which case there are HOA fees. The level of charge depends on the necessary level of management. If the unit owners have no shared responsibilities then there will be no HOA or fees.

A townhouse can be thought of like the strange hybrid offspring of a condo and a single family home. The owner of a townhome will have more autonomy than their condo dwelling counterpart, but not as much as the owner of a single family home. The rights and responsibilities of owning a townhome are probably more variable than any other kind of residential property.

Here’s why.

Do All Townhouses Have HOA Fees?

To begin, I would like to take a brief step back from the focus of this article and share with you, a bright moment in my day. The majority of the questions I am asked have answers which begin with “Well, that all depends on…..” and it is rare I am able to give an absolute answer.

My bright moment was this.

Instead of asking “Do townhomes have HOA fees?” which would have required one of those “sometimes, but not others” answers, the reader asked “Do ALL Townhomes have HOA fees?” which enabled me to give a straight, direct “No” answer. A rare treat in the ever-changing and labyrinthine world of real estate.

But I digress. Back to the secret world of townhouse ownership.

The possibility of having a townhouse either with or without an HOA is rooted in the differences between what, exactly, you own when you purchase either of these styles of home.

What Is The Difference Between A Townhouse And A Condo?

The specifics of townhouse ownership straddle the line between that of a condo and a single family home.

Typically speaking as the owner of a townhouse you will not have outright possession of every element of your property, because the very nature of the construction means that at a minimum,  some components of your home will be shared with at least one other adjacent homeowner.

Meanwhile, you do not quite have the luxury of 100% autonomy in the way that a single family homeowner does.

However, townhome owners, unlike their condo cousins,  generally own the exterior of their property and at least a portion of the land on which the structure is built.

The differences with the existence of HOAs between condos and townhomes arise because townhomes do not necessarily have communal elements requiring maintenance in the way that condos do.

Confused?

Let me explain.

A condo building, no matter how small, has to, by its very nature, have elements which are shared by all owners and/or tenants. For example, everyone in even the smallest building benefits from the roof, the entrances, exits, etc. The residents on lower floors depend on the roof just as much as their neighbors above them, even though those lower properties do not physically touch it. As a result, it would be unfair for the few in the top floor to carry the cost the roof. As a result condo buildings have an HOA, who manage the communal elements and pair for maintenance and repairs with the condo fees.

Townhouses on the other hand.

Well, they are a different matter.

At one end of the spectrum, it is possible to have a townhome in which you do not share any element, other than the dividing wall, with your neighbors. In this case, an HOA would be obsolete.

At the other end of the spectrum, there are vast townhome complexes with hundreds of units. These may share communal sidewalks, landscaping, and roadways. Some even boast shared facilities such as swimming pools, community rooms, and more. In these cases, a resident-funded Homeowners Association is the way in which these elements of the development are cared for.

Meanwhile, there are a thousand and one points between.

There are reasons why some people would prefer to have an HOA while others would prefer to own their property sans HOA management. In addition to the usual for and against arguments, you will hear for HOAs in general; there are a few considerations which are particular to townhomes.

Advantages Of A Townhome With An HOA

Aside from the obvious need for general upkeep of communal facilities, there are reasons why a townhome with an HOA can be a good thing.

  1. If the uniform appearance of the neighboring units is important to you, then you can check the HOA rules before you buy. This allows you to check if items such as the style of doors and windows, or acceptable exterior paint colors are governed.
  2. Generally speaking, when exterior maintenance is carried out by an HOA it happens “building by building.” As a result, for example, if the roof needs replacing the HOA will have the entire roof over each individual home in a single structure, repaired at once.
  3. When you share a wall or two with your neighbors there can be times when noise or other issues can cause conflict. If you have a townhome with an HOA, you have a neutral third party available to mediate.

Disadvantages Of A Townhome With An HOA

As well as the usual HOA issues, in a townhouse you can find the following:

  1. An HOA committee which oversteps the line can be significantly more intrusive when you live in a townhome. There have been occasions where owners have been unable to enjoy their gardens or other outside elements because doing so makes them more accessible.
  2. If the HOA discovers they do not have enough in reserve to carry out repairs or maintenance, you can be hit with a hefty bill, sometimes for a building elsewhere in the community in which you don’t even live.
  3. Likewise, if the HOA is sued, you can be on the hook for your share of the costs, whether you or your property were involved in the dispute or not.

Advantages Of A Townhome Without An HOA

The big advantage of living without an HOA is the freedom from communal rules, especially if those rules are set and controlled by a small percentage of the residents. Also:

  1. You have more control over what you can and cannot do with the exterior of your home. No HOA means nobody to say you can’t paint your front door that fabulous shade of lime green or bedeck your entire home in flower-filled planters and hanging baskets or in whatever way you want to express yourself.
  2. This does not just extend to personal taste either. If you want to upgrade your HVAC to the latest energy saving system, you can go right ahead. Solar panels for the roof? Go right ahead; You only have to consult on significant improvements if the work infringes on a neighbors unit.
  3. No HOA means no unexpected bills for upgrades or repairs you do not want or do not feel are necessary.
  4. There are no hefty HOA fees every month

Disadvantages Of A Townhome Without An HOA

All of this freedom from an HOA may come at a cost which will have more of an impact than if you were in a single family home.

  1. The owner of a single-family house can have a neighbor who doesn’t maintain their property to a basic standard just as easily as the owner of a townhouse. However, when you have a single family home, it is easier to minimize the impact on your own property than it is in a townhome.

For example, without an HOA you may find yourself living in a structure where each home can be in excellent repair, extreme disrepair or anywhere in between. These differences can affect the look and feel of the entire building,

  1. Even if everyone tries hard to be a good neighbor, there can still be issues. For instance, if you wish to replace your roof, but the people on either side of you do not want to have their own roofs done at the same time, it can make the work challenging and more expensive, not to mention the fact that this problem can result in a patchwork roof effect.
  2. Sticking with the roof example, this situation can also cause problems as a result of piecemeal work. Leaks in your neighbor’s roof can affect your home, and short of a long, expensive legal battle, if the people next door don’t want to do what needs to be done, there is little you can do.

The Final Word

No, not all townhouses have HOA fees, and there are pros and cons of buying a townhome with and without a Homeowners Association to manage some elements of your homeowner’s rights. It is down to the prospective buyer to investigate any HOA and decide if they can live with the risks, and in the same way, to determine if they can live with the risk of a Townhouse without an HOA.

Geoff

Geoff Southworth is the creator of RealEstateInfoGuide.com, the site that helps new homeowners, investors, and homeowners-to-be successfully navigate the complex world of property ownership. Geoff is a real estate investor of 8 years has had experience as a manager of a debt-free, private real estate equity fund, as well as a Registered Nurse in Emergency Trauma and Cardiac Cath Lab Care. As a result, he has developed a unique “people first, business second” approach to real estate.

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