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Homeowners Associations
Understand what you're getting into, read the fine print before you purchase a home regulated by an association.
A lot of people live in a community regulated by a home owners association. These types of communities have grown over the past 20 or 30 years as a way to provide affordable housing choices and lifestyles by sharing amenities such as privately owned streets, pools, parking and utilities that do not demand the oversight of local authorities.
Your local organization may be called a homeowners association, property owners association, community association, civic association, property board, property committee or some other term. The primary purpose of the group is to manage the neighborhoods common areas. The secondary purpose is to maintain certain neighborhood standards by means of regulations.
These associations were voluntary when they first started but now membership is mandatory as a condition of ownership in some communities. Few people really understand the risks versus benefits of home owner associations.
Consider the following:
Maintenance - Once the developer's responsibility has expired the owner has to pay for repairs when things break. Having a reserve and planned maintenance program is essential to preserving the community and your property's value.
Fees and assessments - Usually homeowners associations levy mandatory fees to maintain common property such as lawns, pools, trails, golf courses, tennis courts, lakeside docks. These fees may increase as expenses rise.
Liens and foreclosures - If you don't pay your dues or don't abide by its regulations, you can be charged a fine. A lien can be put on your property. If you dispute the charges in court and lose, you might have to pay the association legal fees.
Governance - Most homeowners board members are volunteers elected by the property owners. Sometimes inexperience can cause mistakes.
Regulations - Together with their management partners, homeowner associations function much like private governments. Once property owners sign a contract agreeing to comply with the laws that often supersedes their individual property rights. It's not easy to change regulations imposed by the association. It usually requires the approval of the majority of members.
Membership - Membership in the association may be voluntary or mandatory. Some voluntary associations attempt to become mandatory by implying new deed restrictions have been adopted. Deeds cannot be amended without the agreement of owners.
If you are considering a home in a community regulated by an association, ask to see the covenants, conditions and restrictions before you make an offer. Read them carefully to see if you can live with the rules. Find out how much and how many times they can raise the fees. Ask for the financial records and review them with your lawyer. Talk to the local residents and see if they've had problems.
Learn what rights you have by reading the declaration and bylaws of the association.
Industry groups are trying to help community leaders balance the rights of the individual versus the rights of the community. They encourage members to adopt a formal statement of rights and responsibilities for better communities that outlines principals for homeowners and leaders. Ask if your association subscribes to those or similar principles.
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