What's a Senior to Do? - Part 3

Over 55 Housing

As its name implies, over 55 housing is limited to residents who are age 55 or over. One or both of the prospective residents must meet this requirement. This housing can be either rented or purchased. This article focuses on over 55 housing for purchase.

This form of housing is purchased by the resident. It may take the form of apartments, semi-detached houses, or stand-alone houses. Unless the owner is able to buy it outright, s/he will take out a mortgage and make payments, the same as s/he would buy any piece of property.

Ah! But there is another party to the transaction: the homeowners association (HOA). Herein lies an important point: caveat emptor; that is, “let the buyer beware.” Just as Rhett Butler suggested that Scarlett O’Hara name her store the Caveat Emptorium* in order to warn off prospective customers, prospective buyers of properties with HOAs need to do their research and enter into any and all transactions with their eyes wide open.

Hint No. 1: Have your lawyer review all deeds, restrictive covenants, and HOA meeting notes, as well as the association budget.

Let’s add another question for your lawyer: Is the property being sold fee simple or as tenants in common (or jointly)? If it is being sold other than fee simple, you may well be required to pay a land lease, as well as your mortgage and HOA fees. Sometimes, the land lease can be higher than the proverbial cat’s back. Seriously! So, make sure to have your lawyer protect your interests in this area. You may be happier buying in a different, fee-simple community.

Be sure to study the rules and regulations, HOA fees, the history of assessments over and above the association fees, the association’s needs and wants, and whether the association is able to keep up the property without levying assessments (for example, if the association wants to add an Olympic-size swimming pool, but its budget can only afford a child’s plastic wading pool . . . Well, you get the idea.)

The rules and regulations can be a bear! At the very least, the restrictive covenants will tell you (1) whether your family and friends may visit and how long they may stay; (2) how you must keep up your home (for example, grass must be allowed to grow no higher than x number of inches, and what colors you can paint the doors and trim moldings); (3) whether you can have pets, how many you can have, and what kinds they can be; (4) how many vehicles you can have, what types they can be (for example, golf carts, okay; motorhomes, not okay), and where they can park; and (5) what fees you will be expected to pay, when you must pay them, and what the penalties are if you do not pay them on time (Nota bene: Some penalties can be severe; consult your lawyer).

Hint No. 2: Consider what you will get out of your membership in the HOA.

If community emphasis is on fitness (swimming pools, tennis courts, and a gym), but you are a bookworm, you may be happier in a community that does not expect you to support the sports with your ever-increasing HOA fees (yes, HOA fees do go up, sometimes exponentially).

Will you be able to get your money back when you sell your over 55 housing unit? If the association is poorly managed or if plans are on the board for new over 55 complexes to be built nearby, will you be able to sell your unit for more than you put into it when the time comes to move on? No one can predict the future, but a little common sense, as well as learning all you can about over 55 housing in your area, can go a long way toward protecting you and your investment.

Hint No. 3: Decide whether over 55 living is right for you.

It long has been said that youth keeps us youthful. We are allowed to revisit portions of our childhood when we have contact with youth. In an over 55 community, with restricted visitation rights for those of other ages, exposure to youths and to young and middle-aged adults, we can be deprived of the exposure that keeps a spring in our step.

Be sure to find out whether transportation will be available to help you when you no longer are able to drive. Does the HOA offer transportation, or do drivers for hire operate in your area? Do area stores and restaurants offer delivery services? Does the city or county offer transportation to doctors, hospitals, drug stores and other necessary locations? Again, do your research.

Conclusion

The best advice this novice (non-lawyer / non-accountant) can give you is to (1) do your homework, (2) learn all you can about HOAs and how they operate, and (3) call or visit your lawyer as often as need be before you make any decisions or sign on the dotted line.

* Mitchell, Margaret. Gone With the Wind. New York: Macmillan Publishers, 1936.