3 homeowners association headaches

Orange condo building

Living in a homeowners association is about more than just paying monthly dues.

If you’re thinking about buying property in an HOA, here’s what you need to know about how the association will affect your finances, the use of your property and your life.

Property use and modification restrictions. An HOA’s covenants, conditions and restrictions set forth how residents can and cannot use and modify their properties.

This document can be dozens of pages long, but it’s important to get a copy and review it before you buy.

If you own a golden retriever, you don’t want to find out after you close that the association only allows dogs that weigh less than 20 pounds. If you run a business out of your home, you need to make sure you’ll be able to operate legally under HOA rules.

You’ll also want to know things like what colors you’re allowed to paint your house, whether you’re required to park in your garage instead of in the driveway, what kind of landscaping is allowed and every other rule residents are required to follow.

Don’t expect to be granted any exceptions.

Financial mismanagement. If an HOA doesn’t collect enough in monthly dues, doesn’t put enough of that money into its reserve fund, has inadequate insurance for damage to common areas or neglects routine maintenance, you’ll find yourself stuck with unexpected and expensive bills called special assessments to pay for repairs the HOA can’t afford.

You might not have much advance notice to come up with the money, and if you don’t pay it, the HOA can put a lien on your home in the same way it can if you don’t pay your recurring monthly dues.

Lack of rules awareness. Homeowners don’t usually violate HOA rules on purpose. They violate them unintentionally because they aren’t aware of them. Unfortunately, regardless of the reason, rule violations can be expensive.

HOAs can levy fines and require compliance, and the money you spent on a renovation that isn’t allowed can go right down the drain. Understandably, homeowners are quite upset when they find themselves in this situation. Spare yourself the grief and consult the rules before you do anything.

Enjoying property ownership as part of a homeowners association basically comes down to knowing what to expect, being prepared and following the rules.

Read and follow the covenants, conditions and restrictions, attend HOA meetings, keep an eye on your HOA’s finances and always have some money set aside in case of a special assessment.

If you follow these steps, you’ll be more likely to avoid unexpected surprises.

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