What is an HOA and Why should I Care?

You found the perfect home, but it is in a Home Owners Association (HOA). Find out what you should know about the HOA before you buy your Dream Home.

Make sure you read the CC&Rs and Rules of the HOA. You must live by those rules as-long-as you own your home, so it is important to know what they are and if you can obey them.

What are the requirements?  Parking on street or driveway, pets, garbage can rules, speed limits, rental restrictions etc. These rules will dictate the way you have to live, often with little recourse.

The Architectural Committee decides whether you can add an addition or patio cover, paint a certain color and sometimes even what you can have out in your own front yard and patio including potted plants, water features and landscaping.

What is the Violation Policy and what are the Penalties?

If you break any of the HOA rules, you commit violations and could be fined. If you don’t pay the fines, the HOA has the right to put a lien on your property and if the lien is not paid, they could foreclose on your home. Fees add up quickly with penalties and attorney fees added.

Request the last 12 months of the HOA Board meeting minutes.

If possible, attend an HOA meeting. Talk with neighbors to see how they perceive the Board. Are they helpful, fair, are they skimping on capital improvements which could mean assessments down the road.

Request Financial Statements - What problems have there been, especially if condo or townhouse, i.e. roof leaks, other repairs, etc. What does the HOA pay? Have things been kept up?

Request info on HOA Reserves - How much money is in the reserves? Is there enough to cover repairs, capital improvements, etc.?

Read the Insurance declaration, ask your insurance agent about the HOA or about the insurance declaration.

Put in your contract that seller warrants that the property has no HOA violations that will survive closing.

Do your homework. It will pay off in the long run, so you can enjoy your home without surprises.

Covenants, Conditions & Restrictions (CC&Rs) are limits and rules placed on a group of homes or condominium complex by a builder, developer, neighborhood association, or homeowners association. Learn more about cc&r basics at Findlaw.com .