By Deborah Goonan, Independent American Communities
Before you buy into an association-governed common interest community, be aware that you will give up a lot of control over your own home and personal lifestyle choices.
Here are 5 ways that life in HOA-ville limits your rights and control over your home.
1. You’ll have to follow lots of rules
Life in HOA-ville is full of rules and restrictions. The industry sells many buyers on the idea that the HOA will be able to control neighborhood appearance, and prevent bad neighbor nuisances.
In theory, it seems like a reasonable concept. But in practice, it doesn’t usually work as well as planned. And in exchange for limited control over your neighbors, you must give up much more on a personal level.
Single family homes:
The fact that HOAs have rules may be obvious to most readers. But maybe not. I still hear from homeowners who claim they didn’t know about the long list of HOA rules they’d have to follow until after they bought their homes.
For example, one homeowner told me she incorrectly assumed she’d be able to put up a fence or a shed in her back yard. But the fence wasn’t allowed, because it would block her neighbor’s view of the wooded preserve behind their homes.
Another homeowner was shocked when the HOA told him he could not park his car on the street in front of his house. The HOA insisted that all residents park their vehicles in a driveway. In addition, commercial vehicles or trucks had to be kept hidden from sight in the garage, lest one of your neighbors might have to look at a company logo.
From paint colors to landscape choices, your HOA will have to approve just about any change you’d like to make to the appearance of your house from the street, although some HOAs are more strict than others.
Be warned that some HOAs don’t enforce restrictions for years, then suddenly a new board announces they’re going to start cracking down on violators.
Condos and co-ops, including townhouses:
A condo owner once wrote that she wanted to replace old carpets with hardwood floors, but the association disapproved her renovation plans. They said that hard flooring wasn’t allowed, except for ground floor units, to prevent noise complaints from downstairs neighbors.
Another condo owner had to put her dog on a diet to meet the Association’s maximum weight limit.
In high-rise buildings, residents walking their dog and parents pushing baby strollers are sometimes restricted to using the freight elevators.
And your condo association might frown on holiday decorations, unless you follow their strict guidelines.
2. Rules will limit the use of your property.
Whether you own a single family home or a condo, don’t simply assume you’ll be able to lease it to tenants or use your home as a vacation rental.
HOA rules might not allow short-term rentals at all. And many associations — especially condominiums — limit the percentage of units in the community that can be rented to long-term tenants at one time. Co-ops probably won’t allow you to sublease your apartment without the board’s approval.
Don’t assume that you can hold an annual garage sale, or start a home-based business, or take on a roommate or housemate to help with monthly expenses. Covenants, restrictions, bylaws, or board enacted rules might not allow any of these things. And even if the Association allows these activities today, the governing documents might be amended or the rules might change soon after you buy your property.
3. A developer or home builder might rule over the community
This situation is more common in newer developments, while new homes are still being sold.
While the community is still under construction, homeowners do not get to elect their Association’s board. Either the developer or home builder(s) will appoint business or investor affiliates to serve on the Association’s board.
Believe it or not, some large-scale subdivisions remain under developer control for decades, because that’s how long it takes to finish development.
Be aware that, during this time, homeowners have no direct control over the growth of their community, their annual budget, or HOA fees and assessments.
At best, you’ll be ruled by a benevolent monarch. If you’re lucky, you’ll have attractive common areas and elements and low HOA fees to attract home buyers.
At worst, fees can rise rapidly, even as community services decrease. And you might never see completion of common amenities as promised when you bought your home, especially once home builders begin work on the next phase of development.
4. Your HOA board could be unqualified or unethical
Even after the developer turns over control of the Association to homeowners, there’s no guarantee you’ll be able to elect a competent board.
Some HOAs have a chronic shortage of members willing and able to serve on the board. That’s especially true in seasonal or resort communities, as well as 55+ (active adult or retirement) communities.
Other communities are stuck with HOA well-entrenched boards ruled by self-interested or dictatorial personality types that are hard to get rid of.
Internal politics and a corporate election process invite corrupt and unfair election processes. From proxy abuse and tampering with ballots, to insecure online voting systems, to boards that improperly disqualify candidates or votes, replacing your Association’s board with new leaders is a daunting task.
In some communities, real estate investors own so many units that it becomes mathematically impossible to displace their control of the corporation. In condo associations, that can leave minority shareholding owners vulnerable to hostile takeovers, forced termination of the Association, and sale of their property.
5. You can end up paying for poor maintenance and bad service
I get email about this serious problem almost every day.
If you fall behind on payments, even just a little, your HOA can tack on late fees, interests, and burdensome collection costs and attorney fees. If you don’t pay up, the HOA typically puts a lien on your property, which they can choose to foreclose, taking away your home to collect a few thousand dollars.
Yes, you can pay your HOA fees under protest, but you’ll probably have to sue the HOA to get your money back. And you’ll have to weigh the high cost and stress of suing your HOA against the cost of simply paying your fees and moving on. ♦♦♦