The rules for any HOA community are outlined in the community’s covenants, conditions, and restrictions (CC&Rs) document. There aren’t many limits to what types of rules a HOA is allowed to include in their Covenants, Conditions, and Restrictions, so it is extremely important to review the CC&Rs document carefully and make sure you know and understand every rule you will be held accountable for. A few examples of common HOA rules are:
- Whether or not you can park a car outside or along the side of the road
- Rules for landscaping and whether or not the HOA covers landscaping costs
- Rules for the type of garbage cans, recycling bins, and mailboxes you can have and when garbage cans and recycling bins can be put out and have to be brought in
- The types of holiday decorations you can use to decorate the outside of your home
- The color of paint you choose for the outside of your home, including the doors and shutters
- Whether or not pets are allowed, and how many and what types of pets are allowed
- Whether or not you are allowed to rent out your home
- Where children are allowed to play within the community (some communities do not allow children to play in the streets)
- What type of fencing, if any, you are allowed to have around your home and how high it can be
- What you are and are not allowed to have on your roof (i.e. satellite dish), patios (i.e. furniture), and lawn (i.e. toys)
If you choose not to follow one of the rules set by the HOA, you are considered to have committed a violation and the HOA has the right to fine you for the violation, and they even have the right to put a lien on your property and foreclose on it if you don’t pay the lien. Not all HOAs are created equally – some are more lenient than others and some are more reasonable than others, so be sure to do your homework on your community’s HOA before you choose to buy.
Make Sure The Property You Are Buying Is HOA Compliant
Before you agree to purchase any property located within a community with a HOA, you should include in your purchase offer a clause that states that the current owner guarantees that the property does not currently have any HOA violations and that this condition will last throughout the closing on the property. This can be a difficult clause to negotiate into your contract, but it is extremely important in order to protect you from having to correct and pay for the prior owner’s mistakes.
Research The HOA
The more diligent you can be in your research prior to purchasing a home in a community with a HOA, the more likely you are to ensure the HOA will meet the expectations you have of it and that you won’t be exposed to a high risk of special assessment fees. Some tips to help you complete a thorough investigation on the HOA are:
- Read all documents available on the HOA carefully and make sure you understand them including the CC&Rs, the HOA’s insurance declaration page, their meeting minutes, the HOA’s bylaws, and their financial history and reserve fund documents.
- Ask for copies of the last 6 to 12 months of meeting minutes so you can get an idea of what is being discussed at the HOA meetings and what projects they have going on.
- Try to attend a HOA meeting before you purchase
- Talk to some of the neighbors within the community
- Pay close attention to the condition of the community – does it look like the HOA is holding up their end of their responsibility to the community or does it look like they have been skimping on regular maintenance and not making improvements to the community.
- Check for a history of complaints or problems with the HOA and see if any lawsuits have been filed involving the HOA
- Check for a history of HOA fee increases and prior special assessments
- Understand what services and amenities your regular HOA fees cover and don’t cover
If you are considering buying a condo, townhouse, or single-family home, whether it is in a community with an HOA or not, contact American Dream Home Mortgage today to discuss your home financing needs!