Whether it’s a new home or a resale, homeowners associations typically have a set of rules to follow. These rules are often focused on the overall appearance of a community, and can include restrictions around paint colors, pets, pet waste cleanup and more.
It’s important to understand your options if you violate these guidelines.
1. Look at the Budget
A homeowners association or HOA is an excellent way to save money on your monthly living expenses and a nice perk when it comes to buying a new home. But before you get too excited about the budget, take a step back and assess the situation. Look at your past 3 to 5 years of reams of receipts and tally up what you actually spent. This will give you a good idea of what the future holds. The most important part of any budget is planning ahead. Create a 3 to 5-year financial plan that takes into account any large-scale projects you have coming down the pipe as well as any vendors you are about to sign on with.
Now that you have an idea of what you can expect, it’s time to figure out how to best divvy up your hard-earned cash and use it wisely. Using a savvy budget is the key to not just surviving but thriving as a homeowner in the enviable HOA community of your dreams.
2. Read the CC&Rs
When you purchase a home in an HOA, you are agreeing to live within the rules and regulations that govern your community. These are known as covenants, conditions and restrictions (CC&Rs).
The CC&Rs can be found online or in your real estate agent’s office. It’s important to read them before you purchase a home in a HOA so that you know what to expect.
Many CC&Rs limit how and when homeowners can use common areas in the development. This can include pools, patios, and more. In some cases, these may be for the exclusive use of one homeowner only.
Other rules that are typically included in the CC&Rs may be about pets, yard maintenance, and parking. These can be a little overwhelming for new homeowners.
In the past, responsibility for interior unit damage was often murky if the CC&Rs didn’t clearly address it. However, this has been less of an issue in recent years since most CC&Rs automatically contain either “gross negligence” or “ordinary negligence” exculpatory clauses that shift the burden of liability from the association to the member.
The only exception to this is when the CC&Rs explicitly state that the association can be held liable for interior unit damage. This can be especially important in townhome and condominium developments that have shared common elements such as a pool, patio, or garage.
Finally, be aware that if you are not happy with the HOA’s actions or rules, you can always find another home. Sometimes, you can even negotiate with the board to change things up and make them more reasonable. It is a good idea to talk to your real estate agent and other members of the community to get their opinion.
3. Ask Questions
Getting involved with your Home Owner Association (HOA) can be exciting, especially when it’s a new one. But be sure to ask questions, especially about how the association runs. You’ll want to know how the board handles conflicts and rule violations and who deals with residents’ grievances. It’s also important to ask how the association spends its reserve funds versus assessments, and whether it has had to resolve lawsuits in the past. These are important issues that will impact the way you live in your HOA and its future. If you don’t ask these questions, you could be buying into a community that doesn’t function well and won’t be able to protect you in the future.