As this blog has discussed on many occasions, there are a number of items that a potential purchase of real estate needs to contemplate when buying a property. One thing that many people tend not to pay much attention to is whether the property is governed by or a member of a homeowner’s association. This can be a mistake because, in many cases, homeowner’s associations have a substantial amount of power and can place significant burdens on property owners under their purview.
A homeowner’s association (“HOA”) is a body that develops rules and regulations intended to further the common interests of residents within a particular housing development. The purchase of a residence within the area governed by the HOA usually makes the new owners automatic members of the association.
Although each state has specific laws that regulate how they may operate, each HOA has governing documents, such as bylaws, restrictions, and covenants, that establish the rights and responsibilities of the HOA and homeowners.
Typical HOA Regulations
Although each HOA’s policies will be different, some common regulations are:
- Pets. HOA’s often limit the number, size, or type of pets an owner is allowed to keep.
- Appearance. HOA’s commonly regulate: the colors a homeowner is permitted to paint the exterior, types of landscaping, lawn decorations, and other aesthetic elements of the home.
- Detached structures. HOA’s may not permit certain the construction of detached structures such as tool sheds, or may require the use of certain materials or limit their size.
- Mailboxes. The HOA may confine the homeowner to choosing a certain type or style of mailbox.
- Noise restrictions. HOA’s frequently place restrictions on the level of noise a homeowner is permitted to make during certain times of the day. Such restrictions may be in addition to or, even more stringent, that local noise ordinances.
Almost every HOA will have an annual fee that it collects from homeowners called an assessment. Assessment are used to fund the HOA and sometimes utilized to complete neighborhood projects approved by the HOA. The HOA’s bylaws normally set state the amount of any assessment and limit the amount the assessment can be increased during any given time period. Depending on the level of involvement an HOA has in its development, assessments can be quite hefty.
Generally, if a homeowner fails to pay an assessment; the HOA has the ability to sue to collect the money owed. Because there are few defenses to claims for assessments, the failure to pay will often result in a judgment being rendered against the homeowner. If the judgment goes unpaid, the HOA can place a lien on the owner’s house. Accordingly, it is important for potential home purchasers to be aware of the HOA’s policies regarding assessments.
These are just a few aspects of HOA’s that potential homebuyers must be aware when considering a purchase of property. If you have questions regarding homeowner’s associations, or need additional information about real estate transactions, contact the experienced real estate attorneys at The Slater Firm, Ltd. today.