What Is a Homeowner’s Association?
When you purchase a home in a development, you may be required to join a Homeowner’s Association. Unlike most groups found in neighborhoods, a Homeowner’s Association, or HOA, requires you to pay dues and follow any rules or standards set by the HOA related to your community. In your deed or title, these are considered Covenants, Conditions or Restrictions (CCRs). However, very few homeowners understand what exactly an HOA is or what it can do until they are faced with real estate litigation from the HOA.
Often in Planned Communities
HOAs are very common in planned communities, what have historically been known as subdivisions or developments. These communities are designed and planned by a developer and often offer amenities not found in other communities, like community swimming pools, boat slips or recreational centers. An HOA usually covers every type of home in the community, including condominiums, townhouses or single family homes.
Normally, the real estate company that helps plan the development sets up the HOA before selling the first property. Each property owner who purchases within that development then agrees to abide by the regulation established by the HOA. It is important to note that there could be restrictions and obligations attached to the property that are not related to the HOA, such as utility right-of-ways.
Legally Recognized Entity
In most states, an HOA must take the form of a legally recognized entity, such as a limited liability partnership, corporation or non-profit. All states have laws that regulate HOAs that define their power, duties and limitations.
An HOA normally has a board of directors with a president or chairperson. Most states require that the board members also be members of the HOA and that they own property in the community. The HOA should have bylaws or articles of incorporation which may be modified over the years. The documents should describe community rules, dues and fees as well as an explanation of the operation of the HOA, including how the board and officers are elected.
Pros and Cons of HOA
There are many aspects of an HOA that can be beneficial to a neighborhood, but there are also things about an HOA that can be a problem for some homeowners. An HOA requires all property owners to pay dues which go toward the upkeep of common areas, such as grass cutting or amenities, such as a community swimming pool. This helps divide the cost of such maintenance among all the homes in the neighborhood. However, for as long as you own the property, you must pay the dues, even if you don’t benefit from the services provided.
HOAs can also set standards for how a property is maintained and what improvements can be added to your own property. You may need their approval to place a shed in your backyard or to add on to your deck, for instance. This prevents a property from being overgrown or adding unsightly additions to their home or yard that could lower your property value. However, if you violate the terms of the HOA, even unknowingly, you could be subject to fines, fees and even real estate litigation. Some property owners argue that many HOA restrictions are too strict and unnecessary, such as not permitting an outdoor clothesline or requiring a fence to be exactly so many inches high.
In some cases, an HOA may require that any disputes be handled through arbitration which can present a neutral space for grievances. However, arbitration does not always resolve the problem and it can be even more costly than using the court system.
If you are a member of an HOA and are having issues dealing with either the HOA or your neighbors, contact Georgette Miller and Associates to learn if real estate litigation may help resolve your issues. Contact us by phone or complete the easy form on our website to arrange for your initial consultation.