Homeowners Association: What an HOA does and how it works
A homeowners association, or HOA, is an organization created to maintain common areas and enforce rules for the properties within its jurisdiction. Learn the pros and cons of HOAs.
What does a homeowners association do?
A homeowners association creates and enforces a set of Covenants, Conditions and Restrictions (CC&Rs). The CC&Rs dictate how the homeowners association operates and what rules owners must obey. These rules and regulations are designed to maintain property values, distribute cost of services, and make the community a place people want to live.
HOAs may regulate such things as:
• Housing — May limit the colors you are allowed to use on the exterior of your home, and the size and style of your home.
• Pets — Rules will state if pets are allowed in the community, and if so, what types, breeds, size limits and the number of pets you can own.
• Mailboxes — May be limited to a selection of styles and where they can be placed.
• Home modifications — Rules on if you can make modifications such as adding a pool or shutters.
• Parking — Rules on number of parking spots you receive, how many cars can be parked in your driveway, and visitor parking.
• Lawn maintenance — Rules on how tall the grass can grow before it must be cut, whether you can add gardens, trees or bushes, and what pesticides or mulch is allowed.
• Detached structures — (like tools sheds) May limit the size or placement of the structure.
• Fencing — May limit the types of materials you are allowed to use, color, and the height it can be.
• Hedges — May have certain restrictions on shrubs you are allowed to use, and height regulations.
• Noise — May impose extra regulations for noise.
Donna, a real estate agent, explains: “So if you’re expecting to put a 6-foot privacy fence up because you have a dog, you’d better make sure you can because homeowners associations do restrict things. Some homeowners associations, they’ll restrict fencing. They won’t let you have a boat outside, you know, parking on the street, so just be aware of restrictions. You want to ask that question.”
If you’re looking at homes that are within a HOA, you will have to budget for homeowners association fees, which cover such things as:
• City services — Trash removal, water and sewage.
• Insurance — If you are in a condo, this would cover damage to the outside of the building.
• Lawn care — Snow removal, gardening and general maintenance.
• Pest control
STEVE: So HOA is the homeowners association. They can pay for a lot of different things, depending on the neighborhood. In this neighborhood we’re paying for the landscaping in the front of the development, it pays for lighting all throughout the year, sprinkler systems, watering of the landscaping, but then also lighting around the holidays.
DONNA: So if you’re expecting to put a 6-foot privacy fence up because you have a dog, you’d better make sure you can because homeowners associations do restrict things.
DONNA: Some homeowners associations, they’ll restrict fencing. They won’t let you have a boat outside, you know, parking on the street, so just be aware of restrictions. You want to ask that question.
DONNA: the final say is going to be their committee, so to speak, the president, your treasurer, so forth, the people that have been elected to the board, and they’re the ones to maintain the homeowners association, enforce their rules.
DONNA: Homeowners association fee is a fee that goes to the development. Typically those homeowners association fees are just yearly fees, and what you want to know about that is obviously what they cover, so you know, and then what it won’t allow you to do.
DONNA: So know what the yearly fee is, if it’s $300 or $200 or whatever, and know who’s managing it. Is it still with the builder there or is it actually the homeowners because if it’s the homeowners association and you buy a home there, you can be active in it. You can participate. You have a right. You have a vote there, so it can be a good thing.