Home Owners Associations– “HOA’s”– What You NEED to Know
When you buy a home or a condo in Steamboat Springs, Colorado, chances are you will be part of a Home Owners Association. All HOAs have written rules which are enforced to varying degrees. Before you purchase Steamboat real estate, read the HOA documents! If you find items you can’t live with, you can back out of the agreement before the deadline specified in the contract.
Here are some of the biggies to look out for in HOA documents in Steamboat Springs:
- Pets. Some condo and townhome complexes don’t allow pets at all. Most only allow owners, but not renters, to have them. Many limit the number of pets or the size of the pet. If you have a dog…or two…make sure the place you plan on moving welcomes your canine roommates.
- Fences. Of course you can’t install a fence in a condo complex, and most townhomes wouldn’t allow them. How about single family homes? Many subdivisions in Steamboat Springs do not allow fences. Where they do, there are often many restrictions on where you can install one, what it can be made of (chain-link is frowned upon), and how high it can be.
- RV and boat parking. Don’t assume that you can park your boat or RV on your property. It is likely that storing your toys is a no-no, and you’ll have to find another place to put all your stuff.
- Painting your home. Look at the colors in the neighborhood. There is a good chance you will need to get approval first and you’ll be required to use one of a list of colors if you decide to repaint. In duplexes, you may have to get your neighbor’s approval to change the paint color or add a hot tub or deck. Make sure you read the party wall agreement.
- Prepaid dues for Reserves. Many condo and townhome complexes (especially newer ones) require that 3 months dues be paid at closing into a Reserves account for the HOA. You may or may not get this money back when you sell the property. Again, read the HOA documents and make sure that you understand whether this is a requirement or not.
- 2% withholding by the State of Colorado. This is a State requirement rather than a Home Owner Association rule, but it surprises many people. It only applies if you are an out of state Seller and you have made a profit on a sale in excess of $100,000. Let’s say you live in Georgia and own a condo at Eagle Ridge. When you sell it, the Title Company is required to withhold whichever is less: 2% of the purchase price or all the net sale proceeds and you must file a state tax return in order to get any of the funds back. There are a couple of ways around it; you must sign an affirmation that you are not making a profit, that it is your primary residence, or that it is owned by an entity with a place of business in Colorado, or that it is owned by a partnership. You are not liable for the 2% withholding if you are doing a 1031 tax deferred exchange into another property. Of course, this doesn’t affect you as a Buyer, but will if you live outside Colorado and are buying a second home or vacation home.
It all comes down to reading the documents provided to you by the Title Company and your REALTOR (R). Hopefully most of these items will be disclosed to you prior to your making an offer on the property. Talk to neighbors where possible, and contact a representative of the Home Owner’s Association. Most HOAs have websites, and the majority of the documents are online.