Buyers September 13, 2017

Homeowner Association Explained

Protecting Property Value and Harmonizing Community Quality of Life


A homeowner association (HOA) is an organized and legally regulated community with a commitment to maintaining the look, feel and function of planned housing developments, including gated neighborhoods and leased land segments. As a result, HOAs are usually (but not always) found in middle- to high-income neighborhoods, and each one will have an HOA that consists of its own residents or property-owners. Included properties can be individual houses, townhomes or condominiums. However, you may want to consider a few points before deciding if joining an HOA is right for you.


The purpose of an HOA is to provide a banner under which the residents of a specific neighborhood can meet and agree upon what guidelines their community should follow, which can go lengths to protect not only the collective quality of life therein but also the property value of the homes in the long run. In addition, an HOA may utilize the dues that are paid by its members to help with repairs or additions to the properties that are included in it. However, if a repair or adjustment is deemed necessary and the HOA lacks the funds to cover it, members may be collectively required to pay extra toward it.


Additions and Improvements to Neighborhood Amenities
One of the problems some residents encounter with their association is the inability to employ certain means of going green. While some HOAs encourage it, others may find recycling bins and solar panels less suitable for their aesthetic and request that residents refrain from using them where they can be seen. It doesn’t stop there — in fact, an HOA has the power to govern all of the following:


• How many pets you can own, as well as what type
• Color and texture of your front door
• Height, color and design of any fences or railings on the property
• Items that you’re allowed to place externally, such as storage cubbies and garden hoses
• Whether or not you’re allowed to keep an RV in the driveway
• Types and colors of trees, shrubbery and flowers that can be planted
• Types of fertilizer permitted for lawn grass (“greener is better”)
• Ornaments that can be decorated to the outside of the home
• Whether window-lodged air conditioners or box fans may be used in sight of the public
• How clean the gutters should be, what material roof shingles are allowed to be, etc.
• Other aspects of a homeowner’s property as determined by the HOA members


The rules (referred to as CC&Rs — covenants, conditions and restrictions) vary by neighborhood, but each homeowner is expected to more or less arrange the exterior of their property to align with the HOA’s expectations. While it may sound intrusive, these rules prevent neighbors from doing such things as painting their facades neon pink or making other unfitting adjustments to the aesthetic or function of their property, as these changes can unfavorably drop the quality of life and property value of adjacent homes and create negative impressions upon guests who are touring the neighborhood.

An HOA will typically use residents’ suggestions and complaints to help direct the course of the neighborhood’s setup in the best interest of the whole. This means that the HOA can also take charge of community amenities such as pools, gyms, courts, walking paths and anything else that’s included as a feature or function for those who become a part of the neighborhood. The members of the association get to agree upon the inclusion of new features for the community as well as changes to existing ones, such as whether there’s enough demand for a pool among the residents to justify the cost of installing one or if an existing pool could use the addition of a vending machine.


Here are additional examples of amenities that may be considered by an HOA:

• Dispensers and trash cans along walking paths for picking up pet waste
• Lighting fixtures in key areas to limit crimes of opportunity at night
• Trees and other greenery to restrict residents’ EMF exposure
• Addition of visitor parking spaces
• Public restrooms and water fountains for guests and residents
• Playgrounds for residents’ children
• Speed limit signs and bump-stops to limit accidents in the neighborhood
• Painting curbs with reflective material or unit numbers
• Gazebos, canopies and benches around the community for passersby to enjoy
• Replacement of damaged mailboxes and other infrastructure
• Addition of dumpster cans


Suggestions, Improvements and Monthly Dues: Each Member Contributes
By definition, an association is run by its members, not any one specific individual. A homeowners association is essentially “by the people, for the people”, although this can mean that some associations are run by uncaring members who do little to enforce the quality of the neighborhood. On the opposite end, there are also HOAs that are incredibly strict about what each member is allowed to do with their home. Despite the legal boundaries, the regulations that are imposed on each homeowner can have a dramatic impact on their power to customize their home as they see fit.


Each member of an HOA is required to pay monthly dues that typically run from $200-400 a month, although higher-quality neighborhoods will often impose larger fees. Cost considered, a good HOA is usually well worth the price when prospecting an upscale community, but it’s essential for every prospective homeowner to do their research before committing to a property that’s covered by any HOA. It’s not unheard of for some people to jump feet-first into a commitment and immediately regret it because of the way the HOA wants their home to be run.


Those who rent an HOA-included property will not be responsible for paying dues. In this case, whoever owns the home that’s being rented will have to pay them, but this also means that the renting party has limited power over the direction of the HOA’s decisions. They’re still entitled to provide input, but they have no influence over the association’s expenditures or future decisions.


The dues are spent on projects that improve the quality of the neighborhood, such as the addition or upgrade of aforementioned amenities. Input is collected from owners and renters alike to determine what the community as a whole prefers to see from an aesthetic and functional point of view. A happy community means higher retention and more future funding for the HOA to continually expand upon the quality of life for residents while inviting new members in.


While it sounds great knowing that there are others who are making the effort to improve your life inside the neighborhood, every member of an HOA is expected to do their part in keeping the community’s properties in good shape. This means that you, as a community member, are also expected to do your part in the following ways:

• Picking up litter
• Keeping an eye on neighbors’ security
• Enforcing or encouraging quality-of-life measures for residents
• Reporting damages to infrastructure and providing stopgap solutions
• Advising speeders to slow down, keeping children out of the roads and taking note of illegal dumpers
• Providing input on concerns and how to correct them


Legal Restrictions Inside a Homeowners Association
While an HOA may be run by the members of the community, there’s still a backbone that supports basic regulations that even the members themselves are required to follow. It all goes back to the developer of the complex who creates the CC&R (also sometimes referred to as the Declaration) prior to the first sale of the homes. These regulations are stored in the public records and serve as the legal terms and conditions to levy fines and even foreclose on a home in the event of noncompliance.


When purchasing a home that’s covered by a Declaration, no formal understanding or agreement is required between the buyer and seller concerning what the rules stipulate — the law assumes that the buyer is aware of them when closing on a home. For this reason, it’s even more important that prospective homeowners find confirmation of who they’re dealing with, the reputation of the HOA in question and what previous residents’ experiences with them have been like. Even if the requirements are considered beneficial on the whole by others, they may not suit your particular plans.


HOAs Aren’t for Everyone
There are many ups and downs to weigh out when considering a property that you intend to settle down in. Buying a home is one of the most significant long-term life decisions that you’ll make, but there’s more to it than just the house itself or the locality. Because the community may be regulated by the developer and its component HOA, your dream home could quickly turn into a nightmare. For some homeowners, the best regulation is truthfully none at all, and that’s perfectly fine.


In summation, here are the questions to ask yourself before committing to an HOA:


• Have I adequately researched the HOA in my area of interest and determined that I’m satisfied with their reputation and conditions?
• Am I aware of who developed the complex and what their track record is in regards to home regulation?
• Does the home that I envisioned have any potential conflicts with the common aesthetic and function of its neighborhood?
• Am I willing and able to accept that I may be required to make unfavorable adjustments to the look and feel of my home?
• Do I have any issues with paying another $200-400 on a monthly basis with the possibility of extra fees on top?
• Am I interested in a community effort toward my home’s upkeep, or would I prefer to live independently from outside influence?
• Am I confident that the neighbors, if any, won’t create problems for my home or reduce my property value?
• Are community-based amenities important to me?