Over 30 million Americans lived in communities with a
(HOA) in 2012, according to the Community Associations Institute
(CAI). Even though 92 percent of HOA residents surveyed by the CAI
said they were "satisfied or neutral" with their experience, living
in a community with a homeowners association may not be for
"Oftentimes, (homebuyers) don't ask enough questions in advance
and find themselves surprised by restrictions on what they can do,"
says Kelly Richardson, a managing partner of Richardson Harman Ober
PC, a Pasadena, Calif.-based law firm that regularly represents
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If you're buying a home with an association linked to it, it's
important to do your due diligence before joining an HOA. Here are
five tips to help you along the way:
5 homeowners-association tips
No. 1: Understand the financial costs
. Be extra careful when moving into a condo or community that is
managed by a homeowners association, warns Eric D. Koster, a
partner at Kurzman Eisenberg Corbin & Lever, LLP in White
"In many cases, developers artificially cap common fees in new
to make their units more attractive to buyers. When the developer
exits the picture, common charges jump dramatically when the
homeowner association has to pay market price for services."
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No. 2: Read key documents carefully
. Pets, hot tubs and even wind chimes are at the top of the list of
items you may not be able to have in a planned community.
"Homeowners associations are a shared economy," says Alan I.
Schimmel, a partner with the Schimmel & Parks law firm in
Sherman Oaks, Calif., which regularly handles HOA issues, "so you
need, beforehand, to delve into key documents that include the
board records and CC&Rs."
The covenants, conditions, and restrictions (CC&Rs) are
basically documents which explain how you can use your
"For example, the CC&Rs may limit the number of pets, or the
colors of the homes, or whether one can conduct a business in their
residence," says Richardson.
No. 3: Know the bylaws
. Knowing what your association has control over is job number one
before moving into a home governed by a homeowners group. Your
rights and responsibilities are clearly spelled out in your
CC&Rs agreement, as well as any restrictions on what you can do
with your home, like put up a basketball hoop or adding a hot tub,
"Homeowners need to become better educated on their rights and
responsibilities before joining a HOA," says Richardson. "The
bylaws are the biggest issue facing homeowners when they are
considering joining a HOA. Before they become an association
member, they need to have a complete understanding of exactly what
they are signing up for."
Richardson says potential homeowners can avoid mistakes and
confusion by simply reading the governing documents of the
homeowners association before close of escrow.
No. 4: Reconciling complaints and
The odds can be stacked against you if you have a complaint or
issue, and that's by design, says Richardson.
Developers can exert their influence by controlling the number
of seats on the board, says Koster. Limiting the number of board
members increases the odds of handling residential complaints and
requests in their favor, he says.
The key is getting your complaint in early, and in writing.
State your case, clearly and concisely, and back everything up with
documentation, especially if you paid a bill to fix a problem that
the HOA should have resolved, such as bringing in an outside
contractor to remove snow, for example.
Leave emotion out of the equation and don't personalize the
problem, says Richardson. Also, canvass your neighborhood and see
if your neighbors faced a similar problem. There's no antidote like
experience, and leveraging your neighbor's experience may save you
a lot of time and trouble.
No. 5: Determine what kind of insurance is covered by the
In general, it is up to the HOA, via its board of directors, to
provide catastrophic insurance against disasters like fire, wind
While most states have specific guidelines HOAs need to follow
in providing insurance for their organizations, homeowners should
always ask what insurance they need to cover before they
Living in a community governed by a homeowners association is
one part preparation, one part education and one part human
relations. Master all three and your HOA experience can be