What You Need to Know About HOAs
If you’re buying a new house, you likely dream about being able to do whatever you want to your new home. Paint it whatever color you want … build a custom deck … maybe even put in a pool. But before you get attached to any specific idea, keep in mind that you may have a partner in these decisions: a homeowner’s association (HOA). Understanding what those are and how they may impact you is a crucial part of your buying journey.
What is an HOA?
An HOA is an organization that enforces the rules of a community and collects money to pay for shared amenities like pools, landscaping, and in some cases, trash pickup and lawn watering. If you buy a house, condo, or co-op that has an HOA, membership is not optional. You are required to abide by its rules and pay regular fees.
That means that when you’re shopping for a home, you’ll want to compare HOAs as well as houses. HOA fees and amenities vary greatly from one neighborhood to the next, so be prepared to ask your agent about the details.
Who runs the HOA?
Typically, the community elects residents to serve as volunteer members of the HOA governing board, but in some instances, the HOA is run by a professional management company. There are also hybrid arrangements where an elected board of residents work with a management company, with each group having specific rights and responsibilities.
What rules do HOAs make?
Communities run by HOAs operate under a document of Covenants, Conditions, and Restrictions (CC&Rs), which typically regulates:
- Home exterior colors and materials
- Parking
- Fences
- Yard maintenance and decorations
- Additions to the house
- Access and rules for shared spaces like pools, tennis courts, and playgrounds
There are pros and cons to these types of rules. For example, you may be frustrated that you can’t paint your house a specific color, or that you have to go through some red tape to add a deck. On the other hand, your property value will be protected against neighbors who fail to repair a fence or maintain their yard. That’s why it’s important to know what to expect — and how you feel — before buying a home.
What happens if you break a rule?
One of the most critical things to understand about HOAs is that they do have enforcement powers, and in some cases, those powers are extreme. Forgetting to bring your trash bins in from the curb will likely just draw a polite (but clear) reminder. But repeated or severe violations, like refusing to pay dues or building an unauthorized addition on your property, can result in fines, lawsuits, or even a lien against your home. In a worst-case scenario, some HOAs have the authority to foreclose on a home. Again, read the fine print of the CC&Rs before you purchase in a community, and be prepared to abide by all the rules.
What if you don’t agree with an HOA decision?
Like any bureaucracy, HOAs have established processes for handling disputes. You can appeal a decision, submit a complaint, or typically request mediation or arbitration. If many homeowners are unhappy about something, you can organize a petition or community action. If necessary, you can hire a lawyer to see if a lawsuit is possible.
Of course, if you really want to change how the HOA operates, you may want to consider volunteering for a committee or even running for a place on the board. Serving on a committee may be as simple as helping to organize a Fourth of July picnic, while serving on the board will involve attending meetings and carrying out duties specific to the position you hold (president, secretary, etc.). It’s a substantial (and usually unpaid) commitment, but it’s also a great way to be involved in your community and a key part of what holds it together.
11/21/24