My Love-Hate Relationship with HOAs
Do you own a property located within a Homeowners Association? Do you have or hear horror stories from friends and family dealing with Homeowners Associations? I’ve got a few to share, and I am betting many of you do, too! Homeowners Associations can be often misunderstood, often out of control, often necessary, yet often unnecessary and a nightmare to some!
What Is a Homeowners Association?
First things first! What actually is a Homeowners Association (HOA)? It is a mini-government organization typically ran by residential homeowners elected to a board of directors to oversee the neighborhood management of common areas.
Homeowners Associations or POAs (property owners associations) began as early as the 1960s as a way to manage residential developments with shared common areas. HOAs are much more common now than in years gone by due to so many housing developments containing smaller individual lots requiring more shared amenities or common areas.
In neighborhood areas with shared swimming pools, clubhouses, playgrounds, grounds and walking trails a Homeowners Association is deemed necessary in order to keep the shared amenities well maintained and in good repair.
Many will argue that a Homeowners Associations is also absolutely necessary to police a neighborhood’s restrictions/covenants by being able to collect fees, assess fines, and punish violators.
Frequently, I get calls from homebuyers who are puzzled and unsure if the property they are purchasing is located in a legally formed Homeowners Association.
Why Are HOAs So Misunderstood?
HOAs can be quite complicated with hundreds of pages of rules and regulations. I have often told buyers that HOAs’ rules/regulations are much like rules of a sport you might play. Who would want to play baseball without reading or knowing what the rules of the game are? Yes, it is EXTREMELY important that you know the rules before you play and before you buy that piece of property!
Why is it that most property buyers fail to read HOA documents prior to making an offer on a property? HOA rules/regulations are boring, time consuming to read and sometimes very difficult to read. Here are some tips to find out if the property you are buying is located in a formal HOA and where to find the rules/regulations. Trust me, taking time before you buy can and will save you some major headaches later.
Every piece of real property has a deed or title to the property that describes the property and any documents associated with the property. If you are considering purchasing property through a realtor or homeowner, ask for a copy of the deed and all existing, if any, HOA related documents.
A property deed can also be easily found online or by going to a local register of deeds office in the area where your property is being purchased. Look closely at the deed. If the property is located in an HOA, the legal description section will contain language stating that fact.
There will also be additional references given to HOA bylaws, covenants and restrictions that you should be aware of. If there is no reference to a Homeowners Association, your property is most likely not under a Homeowners Associations’ jurisdiction.
But don’t stop there! If you are not satisfied or sure of the existence of an HOA, a local title attorney can easily research the property and inform you of any existing HOA documents before you make an offer to purchase.
Should All Neighborhoods Have or Be Governed by a Homeowners Association?
No. Not all neighborhoods have common areas, therefore there may be nothing shared to maintain and, in that case, a Homeowners Association may be unnecessary. Many neighborhoods have in place some type of written recorded deed restrictions/covenants that clearly set the property rules for all property owners.
An example of a written deed restriction might be that no outbuildings are allowed on the property unless they match the main home structure. Another example might be that no boats or trailers may be stored on the property.
If a property owner violates a written recorded deed restriction, any property owner(s) in that neighborhood or development have the right to ask that property owner to abide by the restrictions or they may also individually contest the violation in a legal manner. This method typically works well for most properties not located in an HOA and has been in existence for decades.
My Own Experience with HOAs
My first experience with a property located in an HOA came a few years ago after I purchased a three-bedroom condo in a 72-unit development. I did my due diligence and made sure to ask for all HOA documents prior to making an offer. The HOA documents included well over one hundred pages, so it was quite a read!
I carefully read and absorbed the HOA by-laws, rules and regulations prior to making an offer. The monthly dues assessment seemed fair for what appeared to be well maintained grounds and amenities. What I was not prepared for, however, were the somewhat unfriendly letters I would receive from the HOA board during the first year of ownership.
Shortly after purchasing the condo, I ended up leasing it to a year-long tenant until I was ready to move there permanently. Within a month of leasing, I received a written notice from the condo HOA board informing me that someone’s pet excrement was found in the lobby of the condo building.
The condo HOA rules/regulations allowed pets less than 30 pounds for condo owners and strongly discouraged owners allowing tenants to have pets.
The written notice I received was quite unfriendly and stated that the next time an animal excrement was found in the building, they would have the excrement checked for DNA and require all pet owners to submit DNA samples of their pets to see whose pet the excrement belonged to. The HOA board letter further stated that the pet owner found to be guilty would be heavily fined. To my knowledge, there were never any fines levied after the threatening letter.
I unfortunately was in receipt of a few more HOA letters that year from the same condo association. One letter assessed a fine of $350 to me due to a tenant accidently stopping up the garbage trash chute with a carpet remnant.
Another letter informed me that a remodeling contractor I hired could not occupy the condo while remodeling work was being done. To say the least, the receipt of the numerous HOA board letters discouraged me from moving into the condo and I eventually sold it.
Let’s Have a Conversation:
Have you had good or bad experiences with your HOA? Have you purchased a property without knowing an HOA existed? Do you think HOAs have too much or too little policing power? Would you prefer to buy a property with or without an HOA?
I moved into a condo 3 years ago. My HOA was $250 a month. After my first year, the HOA added an a one year $80 per month special assessment to cover the cost of roof repairs. The next year they upped the special assessment to $110 per month. This is all on top of the $250 HOA fee. Last December, the HOA sent a notice that the monthly HOA fee would be raised to $300 a month plus a raise in the special assessment to $230 per month. That is $530 per month on top of my mortgage and other bills. Come to find out, without going into all the details, they have mismanaged the funds for many years. I wrote a letter expressing my disappointment, and was told to move out, if I did not like it. Easier said than done. I am on a singe income, as many of the residents are. NEVER AGAIN!!!
Be sure to also read the latest reserve study since if the reserve account is not adequately funded any large community expenditures can result in costly special assessments or large increases in the monthly HOA fee!
We have had nothing but headaches with our HOA. I had no idea when I bought my new home that this would be the case.
We were told we could put in a view fence (we’re on water) for our dog in our back yard before we bought. After buying and talking with the HOA, we were told they had to have the board approve the fence type change, and that I would need to remind the HOA contact person monthly to check with the board, because many of them lived in FL (not IL).
I contacted them religiously monthly for 6 months, when they finally agreed to legally make the by law change, I then found out that in those last 6 months, the builder had finished building all the new home, and they were now owned by homeowners. They would need to send out the vote to the 140 plus h-owners. Hence needing a 66% approval for the view fence, which I was also told I’d never get. They were right. We gave up on getting the view fence.
Then our next door neighbor decided they wanted to put up a shed on their water view lot, in which each homeowner had paid anywhere from $10K – $15k more for full water views. When we saw where the neighbors shed footings were going on their property, i.e. sticking out from her house and over towards our house to be easily seen from the street. The shed was to also partially now block our what was a water-view. We checked with the HOA. The by-laws said sheds had to be back behind the home, out of view up against the home.
We had asked the neighbor to please comply with the HOA bylaws, in which they stated ‘no and to look to the left’. I approached the board and asked them to please review the by-laws, etc. They refused to change their mind. about placement of the shed, which was now put up quickly, even though we had asked the board to halt building on the item until this was reviewed which obviously they didn’t. I was told once the board makes a decision, they don’t usually change it. They did tell the neighbor they needed to add shrubbery to the front of the shed to block the view of it from the neighbors if walking the sidewalk or driving in the street. The neighbor never put shrubbery up to block it and had told us she couldn’t afford it, but…
did then have 20 9′ tall arbor vitaes planted between our property line from the water up to between our homes and past our garage. Now completely blocking our water view in that direction. As well as any other neighbors looking in that direction from their homes. They only added these tall bushes on our boundary line and not on their other side so as to not block their water view. There is nothing you can do about people putting in shrubs. So I was told. And the HOA never followed through on verifying the neighbor put up shrubs to block the shed from the street view.
I spoke with two different legal firms regarding the shed placement whom both told me if I took this to court, I would win since the HOA was not complying with the by-laws, but it would take years and be very costly.
There have been other things the HOA has done in our development where they pick and chose which violations to address, while leaving others to do the same thing. Many homeowners are disgusted. Some have moved. Others have just given up on fighting city hall. Needless to say I will never live in an area with an HOA again. They are dishonest, unscrupulous, and do not do their jobs as they were originally designed to do.
Never again. My HOA is run by a cabal. They dictate, thrwo out fines, treat us like children (three are former school teachers) and spend money like it’s their own. The president owns the accounting firm and pays herself. She does deals with landscaping, etc., and gets kickbacks. We have residents who are either too old or can’t be bothered with having oversight… not to mention the cabal targets those who question or complain. It’s my first time and absolutely the last.