These three letters can strike fear and uncertainty into the heart of a prospective homebuyer or calm their worries with peace of mind and comfort.
Homeowners Associations, or HOAs, create continuity in a community, oversee property maintenance of common areas, and maintain standards for individual properties — but they can also create headaches for homeowners. In 2019, 58% of American homeowners lived in HOA communities, so if you’re on the hunt for the perfect home, you may also find yourself on the hunt for the perfect HOA.
Condominiums are often known for having HOAs, but HOAs can also oversee townhouses, row houses, and even single-family homes. Unlike a neighborhood association with optional membership, membership in an HOA is likely mandatory if you buy a home in an HOA-governed community.
There are definite pros and cons to being part of an HOA. You can have the benefit of added amenities like a swimming pool, gym, or other recreational areas with none of the maintenance. But homeowners association problems can arise when the HOA oversees everything from the height of the grass on your lawn to when, or if, you can put up your giant inflatable Santa.
Before you decide to move into a home that is part of an HOA, it’s important to weigh these pros and cons. We did some digging and talked to an expert real estate agent who knows the ins and outs of HOAs to uncover the top 10 homeowners association problems and give you tips on how to resolve them.
What can you expect from an HOA?
Generally speaking, HOAs are responsible for maintaining common areas and amenities. But their covenants, conditions, and restrictions (CC&R) can include rules that affect what you can and can’t do with your home. They may dictate things like the color of the home, the appearance of the lawn, window coverings that can be seen from the street, the type of holiday decorations you can have, and when you need to have your garbage cans out. They can also have a say in things that are less obvious — the breed of dog and types of pets you can have, if your RV is allowed to peek out from above the backyard fence, number of trees in your yard, etc.
Fees, and what they cover, vary widely depending on the individual HOA. Some may only charge $100 a year to maintain signs within the neighborhood while others cost upward of $1,000 simply for living in the community and taking advantage of its amenities. The cost is usually proportional to the number of services the HOA offers and how much they oversee, as well as the location of the property. The more involved the HOA is in daily things like lawn height, decorations, etc, the higher the fee likely will be. The rules and amenities also differ widely depending on location and community. Some HOAs have very specific pet or lawn restrictions while others may only maintain common areas.
House hunting in HOA-governed properties is where your real estate agent comes in in a big way. Since they’re familiar with the community and the neighborhoods, they are likely to know the reputation of different HOAs and can steer you in the right direction. Agents are typically in the know when it comes to what type of amenities are offered in an HOA community, the fees and what they cover, and common homeowners association problems.
What are the top homeowners association problems?
While this is a fairly long list, it shouldn’t discourage you from purchasing a property in an HOA. What it should do is provide a heads up for common homeowners association problems as you search for a house and ultimately make a decision.
1. Not maintaining property value
One of the main responsibilities of an HOA is to maintain or increase property values. The HOA oversees maintenance and repairs for common areas, so if they’re not holding up their end of the bargain, it might be time to take some action to ensure that the fees you’re paying are actually doing what they’re supposed to be doing.
For instance, if an HOA isn’t maintaining common spaces, that can have an adverse effect on your property value when you sell. Most people don’t want to pay fees to an HOA that is obviously not doing its job.
2. Lack of communication
As a homeowner, you should understand the HOA structure, how decisions are made, and new rules or changes to existing rules. If communication is lax, this can create problems with residents not knowing certain rules. There should be regular communication via meetings, newsletters, email, social media, etc.
The HOA’s CC&Rs can place restrictions on size, breed, types of pet, etc. They can also restrict excessive barking. So if your dog is one to bark at squirrels all day, don’t be surprised if you receive a fine. There can also be regulations about cleaning up after your pet and when it needs to be on a leash.
If you’re an avid gardener, or even a beginner, check the HOA guidelines for what you are allowed to plant. Some states have rules that ensure HOAs can’t restrict your use of native plants, but some HOAs are resistant to native plant landscaping.
Becky Blair and Kim Carlson, top-performing Maricopa County, Arizona, real estate agents, have lots of experience helping buyers navigate the do’s and don’ts of HOAs, especially since Blair lives in one herself. “My personal HOA says I have to have two trees in my front yard, and I only had one,” Blair says. She received a letter telling her to plant a second tree by a certain date or face a fine. She says that “because I’ve been through it, I know how to talk to my [clients] about knowing that there are certain guidelines even with landscaping.”
Another one of the top homeowners association problems surrounds rentals. An HOA-governed community might have rules regarding whether you can sublet your home or rent it out as an Airbnb or VRBO. If this is something you want to do now or in the future, making sure it’s allowed should be on your list of things to check out. According to a Michigan attorney, some HOAs have the power to “pronounce Airbnb and VRBO DOA.”
6. Pest control
Pest control can be a tricky issue if you live in a building with multiple units. In a single-family home, you would be responsible for pest control regardless of whether you’re in an HOA, but if there are multiple units in a building, getting rid of pests in your unit means that they might just move next door or upstairs and come back when the coast is clear.
Blair and Carlson have seen issues arise if the HOA says they don’t cover pest problems like termites or bees, particularly in buildings with a shared attic or basement or where the pests are just moving from unit to unit. In this situation, the HOA might have to treat for pests in these areas or in the entire building. If they hesitate, then providing evidence from experts, like exterminators, and getting documentation makes it harder for the HOA to fight against.
7. Vehicles and parking
Before moving into an HOA-governed community, make sure to read the CC&Rs carefully and have your agent double check to ensure you can have all of the vehicles that you want or already own. Some HOAs have rules against certain recreational vehicles or how many vehicles you can park on the property.
For one of Blair and Carlson’s clients, parking was ultimately a deal breaker. The clients called the HOA directly to ask about their large delivery type work truck that they drove home everyday, but unfortunately it wasn’t allowed in the condo’s parking lot. “Because of that, they didn’t purchase that home. Because they couldn’t park there, it wasn’t going to work for them,” says Blair.
8. Holiday decor
Some HOAs can be a real drag on the holiday spirit. Rules could regulate the type and size of holiday decorations, when they can go up, when they have to come down, and even the size of the lightbulbs. This is an important thing to pay attention to if you’re big into outdoor holiday decor, especially if you’re not house hunting during the holiday season and decorations might not be at the top of your mind.
9. Challenges to inclusionary housing
Inclusionary housing practices give lower income families the opportunity to buy a home in a development or condominium for a percentage of the market rate. These below market-rate (BMR) homes create homeownership opportunities for people who may not otherwise have the means. However, HOA dues, especially unpredictable fee increases and one-time assessments, can undermine the affordability of these homes.
There are multiple ways for an HOA to balance the fees paid by market-rate and BMR homeowners, but it can still create a challenge to inclusionary housing. The Grounded Solutions Network, which focuses on supporting affordable housing programs, recommends factoring in current HOA fees and future fee estimates, among other factors, when creating a sustainable pricing formula.
According to Matthew Freedman, co-author of the study “The rise and effects of homeowners associations,” HOAs have the potential to “propagate segregation and inequality in a way that we as a society don’t view as positive.” Critics of HOAs note the HOA’s ability to be a “tool for exclusion” in some cases by prohibiting activities that are more common amongst individuals in certain groups. Hefty HOA premiums that can feed into exclusionary housing tend to be more prevalent in southern and western states, while lower premiums are found in the Midwest and Northeast. With over 60% of newly built single-family homes and 80% of houses in new subdivisions being part of an HOA, this potential for exclusionary housing practices has increased over the years.
10. Mortgage approval
While you may have crunched the numbers to see how much house you can afford, you have to make sure to include the HOA fees. HOA fees are factored into your debt-to-income ratio when you apply for a mortgage, so if the HOA fees are higher than originally thought, that could affect the mortgage approval. Or, if the HOA raises fees during the approval process, the prospective buyer may need to come up with more income or re-apply.
Another way that an HOA can impact mortgage approval is that the lender wants to be relatively sure that the home won’t go down in value over time. If the HOA has a reputation of poor community management, the lender may shy away because they don’t want to lend money if the HOA could negatively affect the property value.
Are there things an HOA can’t do?
In a word: Definitely. But they might try.
Among homeowners association problems is HOA overreach. While HOAs have quite a bit of power over the properties in the community, here are a few things that they can’t do:
Violate federal or state law
In a dispute with an HOA, federal and state law will likely prevail. For instance, the Fair Housing Act of 1968 prohibits acts of discrimination with regard to the sale, rental, and financing of housing based on race, religion, national origin, sex, handicap, and family status. As a result, HOAs can’t discriminate based on these factors either — and we hope they wouldn’t anyway.
Another example are “right to dry” laws, which allow residents to capitalize on solar drying. These laws protect your right to air dry your laundry in your own yard, but there may be different rules if you want to put a clothesline in a common space like a shared lawn or common area of a condominium.
Fine you for something not included in CC&Rs
HOAs can’t just fine people all willy nilly. If you receive a fine from your HOA, it’s important to follow up and make sure you are really in the wrong — this is good practice for any fine you might get from parking tickets to late fees. Checking the CC&Rs will ensure that you can actually be fined for what you’re being fined for. On rare occasions, you may be fined for something that isn’t actually prohibited, and that’s a big no-no.
Change rules without following proper processes
Regulations on how new rules, bylaws, and covenants are enacted should be outlined in CC&Rs. And if the procedure isn’t followed, the HOA isn’t allowed to change the rules.
Keep you from filing a lawsuit
If you find yourself in a dispute with your HOA, they may try to discourage you from taking a matter to court, but you have the right to take further action if your appeals to the board don’t get you anywhere.
Ban support animals
Service animals are an exception to pet-related rules and restrictions. However, you may have to plead your case for an emotional support animal, especially if it isn’t a certified service animal.
How to resolve a problem with the HOA
Understand the rules
Knowing the rules is the first step to avoiding common homeowners association problems or working to change the rules if you think they are unfair.
Go to meetings
If you want to be informed and part of the process, attend your association meetings. You’ll have first-hand knowledge of the processes and procedures, and the board will see that you are involved and interested. You can start attending meetings when you move in, but if there’s a problem, you receive a fine, or you feel that the HOA is overstepping their bounds, then attending meetings is a must.
Follow the complaint process
When you’re purchasing an HOA-governed home, it’s important to make sure that the complaint process is clearly laid out. In the event that you do have a complaint, follow their process to try and come to a solution.
Don’t ignore violations
Ignoring violations will make the situation worse. If you’re truly in violation of the CC&Rs, fix the violation quickly and pay the fine promptly. If you wrongly received a violation, then take the matter up with the board at their next meeting.
Getting upset only exacerbates an uncomfortable and tense situation. Know that you have rights and recourse and handle the situation calmly.
Do your research
Know your rights. In some cases, like with clothes lines and “right to dry” laws, state and federal laws may override the HOA CC&Rs.
Create a paper trail
Document. Document. Document. In the event that an issue arises, you’ll have the evidence and support you need to make a clear case. Blair and Carlson say if an issue arises, then providing the HOA with documentation of an expert’s opinion can go a long way.
For instance, if there is a pest control issue, “when you can provide them with documentation, not just your personal opinion, but documentation from a pest control company saying why it’s a bigger problem than just one unit, then it’s harder for them to fight against.” This expert opinion could go further than simply demanding that the HOA fumigate the entire building.
It’s also important to keep copies of any written correspondence and keep a record of any meetings you attend to show that you have taken the proper steps if you need to take further, and possibly legal, action.
Consider a petition
Petitions can be powerful tools. If there’s an issue that is relevant to you and your neighbors, starting a petition to gain support for the change can go a long way.
Make sure to pay your dues
Paying dues (and paying them on time) is one of the best things you can do to stay in the good graces of the HOA. If an issue arises, they may be a little more sympathetic.
Hire a lawyer, if necessary
If things get to a point where legal action is necessary, be sure to hire a lawyer to walk with you through the process.
Think about ‘Future You’
An important thing to keep in mind when considering an HOA-governed property is the needs of Future You. While Current You may have two adults and three young kids in the home and the HOA says you can have three vehicles, that’s great … for now. Future You may have three additional drivers and five vehicles total.
Will Future You want a boat? What about a dog? Will Future You decide that your house should be purple? Current You needs to take Future You into consideration, understand common homeowners association problems, and make sure that there is room in the HOAs CC&Rs to allow you to make the choices you may not know you want to make yet.
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