Homeowners Associations: What To Expect

CC&Rs

When you purchase a home governed by a Homeowner Association, you accept the regulations within the HOA's CC&Rs. CC&R refers to the covenants, conditions and restrictions placed upon a neighborhood. Always read the CC&Rs carefully before you buy a home. Some are more lax than others. You may also want to talk to some current homeowners there. They can tell you whether the HOA is a strict enforcer of these limitations or not. The CC&Rs can regulate everything from whether you are allowed to have a basketball hoop in your driveway to when you may place your garbage can on the curb.

The Cost of an HOA

Each HOA has a fee that homeowners pay. This fee may be charged monthly, quarterly or annually. And the fee can range from $15 per month to hundreds of dollars per month. This fee goes to the HOA Management company. And the management company then has to account for all its spending within your neighborhood. Typical items covered under your HOA would be common area maintenance, such as the landscaping in a play area or greenbelt. For those who live in townhomes and similar complexes, HOA fees may cover roof repair, sewer and garbage fees and even water.

The HOA also has the authority to fine you for violations of the CC&Rs. Fines are typically small. For example, if you receive a warning letter about the foot-high weeds in your yard and ignore the letter, the next letter will state that you are being fined $15. These fines can compound, so it's wise to pay the fee immediately and then comply with the HOA's request.

If you fail to pay the fees or fines, the HOA may take you to Small Claims Court. In very serious, but rare occurrences, the HOA can even take your home away from you. Keep in mind that the legal costs for taking such a drastic measure is fairly prohibitive. However, Small Claims Court can cost you time and money, so it's best to pay up when the HOA demands. Of course, if you feel the fines are uncalled for, you may always seek to have the fines reversed. In some instances the HOA will then take off charges that you dispute.

HOA Meetings

Meetings are held quarterly. Typically, signs will be posted around your neighborhood about one week before the meeting. Several homeowners sit on the board and work alongside the HOA to ensure the CC&Rs are being followed and that the money is being allocated by the management company properly. At these meetings you may air your complaints about neighbors, or about the HOA management company itself.

Complaints

Complaints may be lodged by you against any homeowner in the HOA. Your complaint typically remains anonymous. The HOA management company will send out a letter to the homeowner as a warning. Many management companies also have an employee drive through the neighborhood regularly to check on the condition of the property and look at homes that have received complaints. Once a homeowner receives a warning letter, he has a certain period of time in which he must comply or he will be fined by the HOA.

The Good and the Bad about HOAs

The upside of living in a home managed by a Homeowners Association is that you are protected from your neighbors. If your neighbor doesn't weed his yard, or poses any other visual blight upon the area, your neighbor will be fined. Your neighbor won't be able to make any architectural changes to the home that deviate from the norm. And in general, your market values should stay the same or rise with the market because you won't have a neighbor bringing your property values down.

However, your neighbors are protected against you and anything you might do to the neighborhood that you might think is okay. Don't have money for curtains so you hang up sheets? Forget it. You'll get a warning letter. Want to put a nice bird fountain in your front yard? You're going to have to check with your HOA first. Some HOAs are more strict than others, so if you're not one for following the rules, you'll want to find a home in a neighborhood that does not have an HOA or has a much more lax HOA than some.