If you’ve never purchased a home in a managed community (“managed” as in overseen by a homeowner association or HOA), you probably have no idea what will be included in the package of HOA documents you’ll be receiving.
That’s ok, at this point you’re not expected to. You are, however, expected to read and understand every word before you fully commit to the purchase.
HOA documents aren’t light reading. They’ve been prepared by lawyers, for lawyers so naturally they are filled with legalese. Understanding the lingo, however, is critical to the future enjoyment of your new home.
The Homeowners Association
Owning a home in a common interest community (CIC), such as a condo, townhome or even a single-family home, offers freedom from some of the day-to-day responsibilities of homeownership, such as landscape maintenance. On the flipside, the restrictions under which these features are made possible aren’t encountered by homeowners that live outside of a CIC.
The HOA is comprised of all of the homeowners in the community and its governing body is the board of directors ― typically a group of homeowners elected by the entire association. It is these folks that, among other duties, ensure the CIC’s rules and regulations, as laid out in the governing documents, are enforced.
Rules and Regulations
While the documents you’ll receive for review cover a variety of issues, pay close attention to the pages that restrict how you can use your new home. Let’s take a look at some of the more common rules and regulations you’ll find with homeownership in a CIC:
- Conduct of homeowners: The HOA has the power to regulate conduct as it applies to the safety, health and welfare of other occupants as well as other occupants’ rights to a quiet enjoyment of their homes. These regulations may prohibit smoking; limit the amount and type of noise occupants create and dictate conduct on a broad range of other issues.
- Pets: The governing documents may restrict homeowners as to the number, size, species and breed of pets they are allowed to keep on the property.
- Landscaping: Restrictive covenants may dictate that you can do nothing to alter your front yard landscaping unless you submit a plan to the HOA for approval.
- Home Exteriors: The documents may prohibit the placement of a building (such as a shed), install a fence, erect an antenna, a light standard or any other exterior structure outside your home. There may also be restrictions against painting the outside of your home or you may be given a list of colors you must choose from if you want to paint.
Purchasing a Home in a Common Interest Community
Soon after your offer is accepted, the HOA will send all the legally required disclosures and documents for your perusal. You will be given time to review the documents and cancel the purchase without penalty should you not like what you read.
If you decide to continue with the purchase it will be assumed by all parties that you read and understood every single word in the documents. This limits your remedies down the line should you discover a restriction you can’t live with.
Yes, the HOA documents are boring and yes, they may be challenging to interpret. To be absolutely sure you can live within the restrictions, have a real estate attorney review the documents and explain anything you don’t understand.
No matter how much you love that amazing townhome, it’s not worth purchasing if the regulations impact your lifestyle and restrict your freedom.