Home Owner’s Associations. A generation or two ago, they didn’t exist, at least not in any form resembling today’s corporate run machines. Today their power, influence, and judicial support make them one of the USA’s most powerful extra-governmental organizations. As a result, many buyers (me included) won’t purchase or even consider purchasing a home that’s in a home owner’s association.
According to Citizens For Constitutional Local Government, a home owners’ rights group: “It’s a government outside the U.S. government.” Did you know that many home owner’s associations have lien rights to the homes in their jurisdiction?
Not ALL home owner’s associations have the right to foreclose on your home because of unpaid dues. Not all are overly aggressive in their enforcement of rules and regulations. Some are well run and sincerely work to make the neighborhood a better place to live. Some HOA’s are the complete opposite.
According to the Citizens for Constitutional Local Government, approximately 57 million Americans live under the rule of a home owner’s association. HOAs are free to regulate practically anything, so long as they don’t violate state and federal fair housing laws regarding age, race or handicapped access (excepting senior living facilities). While most HOAs focus on controlling the cosmetic look of a neighborhood or building or in maintaining common areas, there seems to be no detail able to escape their prying eyes. If you’re looking at a home that’s part of a home owner’s association, here are some tips and considerations to weigh before you make your largest purchase:
If it isn’t, you could be saddled with thousands in costs to bring the home or condo into compliance. You may even find that a home that’s been “approved” for a decade, suddenly is the target of an overaggressive HOA president who wants to make a name for himself because your driveway isn’t in compliance.
Make sure your home is up to date on it’s HOA fees.
If it isn’t, you could face thousands in fees or even a potential foreclosure for past due fees. Yes, home owner’s associations can foreclose on your home!
Read, re-read, and re-read the rules again.
Home owner’s associations can ding you for everything from having a portable basketball goal to having too many weeds in your flowerbed. They can fine you for failure to water your lawn enough, line drying your clothes, having “unapproved” lawn furniture on the back patio, leaving your Christmas lights up past the approved date, not bringing in your trash can, parking on the street overnight, or just the simple act of hanging some wind chimes. If you’re going to voluntarily put yourself under the rule of an HOA, you better know the rules.
HOA’s for condominium buildings can bill you for your portion of a new roof, new paint job, new landscaping, new windows, resurfacing the parking lot, or almost anything else they decide (with or without your approval). Once the decision is made, you have very little recourse so read, re-read, and then re-read again the rules and procedures so you aren’t surprised.
Consider your temperament.
My temperament would never cut it. I’m far too independent to allow some little lord Fauntleroy and his posse of snooty authoritarians to dictate what I can put on my patio, what kind of window treatments I can have, if I can use a rain barrel during a drought, how many people I can have over to spend the holidays, or whether I can leave my garage door up for more than thirty minutes.
Find out EARLY about all the fees.
And there can be fees a-plenty. Make certain you include ALL your fees in your calculations of housing costs. You can’t get out of these fees and failure to pay could result in foreclosure. More than one family has lost its home over something as simple as HOA fees or fines.
Losing your home doesn’t let you off the hook.
The home owner is still liable for HOA dues even if the home is foreclosed and goes through a short sale. The lender is liable for all HOA dues when it’s REO (foreclosed but not sold). HOA dues include all the outstanding balances on the HOA’s books, including interest and the HOA attorney’s fee. All the property taxes and HOA dues must be paid at the final stage of closing.
Your HOA may pay your neighbors to turn you in.
Some HOA’s pay cash rewards to members who turn in violators … even if those violators are co-members! One home owners association in Arizona paid members $100 for reporting someone with a dog not on a leash; someone reporting a resident throwing away trash not allowed in a dumpster got a $150 reward.
HOA’s can be defeated, but it’s hard to find a lawyer to help you because there isn’t much potential for “damages” just “relief,” which is how an attorney collects the big bucks. Many people feel that buying into a HOA community strips them of too many Constitutional rights including due process (try Googling “HOA nightmares”).
Before YOU voluntarily put yourself and your family under the jurisdiction of a home owner’s association, make certain your eyes are wide open.
Photo by ulybug