The catch with purchasing a home or a condo in a co-op, planned unit development (PUD), or common interest development (CID) in California, is that you also automatically become a member of a homeowners’ association (HOA) club. The club, while exclusive, is not necessarily the kind of club you would want to be a part of just for the name or the bragging rights. This is because with your membership to an HOA, you automatically give up a lot of control over your own property. Clearly, if you are in the market to spend a lot of money on a new property, you probably want as many freedoms with it as you would expect, therefore, it is crucial you understand the ways that being a member of an HOA can limit those freedoms.
A homeowners’ association is comprised of members who own property within the subdivision. Most HOAs are operated by a board of directors, usually made up of a small group of volunteer homeowners.
All members of the HOA must agree to abide by certain rules and regulations which are outlined in the covenants, conditions, and restrictions (CC&Rs) section of the agreement.
These CC&Rs limit the freedoms of individual homeowners’ by putting executive and decision-making rights into the clutches of the homeowners’ association at large. In doing this, the agreement serves as a legally binding document that allows others within the community to make decisions about what you can and cannot do with your property on your behalf.
Okay, so far, the whole things sounds awful, right? Well, the thing is there is not really much good that comes out of homeowners’ associations for most people: some associations fancy themselves neighborhood officers and enforce every rule with the same zeal that a cop might have for giving someone a ticket on their morning commute to work, whereas others are far more chilled out and do not really bother to interfere with their members’ lives.
As a general rule of thumb, most homeowners’ associations will always want to make decisions that serve to improve the value of the houses in the community. While that may sound like a very noble intention, it often means that the association gets the ability to dictate very constrictive regulations on the entire community living there.
Since these agreements and their CC&Rs that come with them are legally binding, you will absolutely want to be sure that you have read up on the details of the agreement. Otherwise, you might end up purchasing a property where the CC&Rs are incompatible with your lifestyle. For instance, many CC&Rs outright prohibit you from painting your house certain colors, specify which colors of curtains or blind are acceptable if they are visible from the street, and even detail what kinds of front yard landscaping or pruning you can do. Honestly, there is virtually no limit to how weirdly specific the rules in CC&Rs in an HOA can get. Some common examples that they can restrict or regulate include:
As such, it is always in your best interest to read your the provisions outlined in your CC&R's thoroughly and carefully.
Another negative aspect of homeowners’ associations is that once you own property within the community, getting any help or relief from overbearing restrictive CC&Rs is extremely difficult. Most likely, you will have to submit a detailed application with a hefty fee for a variance, ask for your neighbors’ express permissions, and maybe even attend formal hearings and proceedings to see what is decided about your case. The bureaucratic processes only worsen if you want to make any structural changes to your house, like adding a room or building a fence. In those cases, you will most likely have to receive formal permission from the association, in addition to complying with city zoning laws.
The last straw for most prospective buyers is the fact that homeowners’ associations almost always require members to pay fees on a monthly basis, which can feel an awful lot like paying for rent on top of your mortgage.
These fees are to cover costs for ‘common property’ maintenance such as pools, golf courses, gardens, walkways, and other facilities. Sometimes, the fees can run as high as hundreds of extra dollars a month. Worse still, lots of homeowners’ associations give their boards permission to raise the costs by up to 20% per year as well as imposing new taxes and fees into the final cost without even requiring a membership vote.
When a HOA fails to maintain that common areas, misuses HOA funds, the HOA may be in breach of their fiduciary duties of HOA Board Members. An HOA board member is typically only personally liable in these lawsuits if the member breached his or her fiduciary duty to the HOA. Often times in HOA can find themselves liable during homeowners insurance claim disputes amongst neighbors which generally result in a lengthy litigation battle.
If you are worried about any of the restrictions we mentioned earlier, or if you have concerns that homeowners’ association fees may get out of hand, you should definitely refrain from purchasing a property that requires you to become a member of an HOA. Make sure you do your research thoroughly about the exact terms and conditions that the property entails, because most times the sales agents for units within a community will not ever warn you of these restrictions. They do a great job of selling you the property–and a poor job of telling you about the baggage and the bureaucracy the property comes with.
At KAASS LAW, our California homeowner association lawyers believe that your home is a sacred place and running into problems with your HOA and insurance claims can be a frightening and overwhelming experience. Making the move to own instead of renting is a huge stride toward future financial success for anyone, and we want that process to be as rewarding and stress-free as it can be for our clients. We break down the details to you very clearly so you do not fall into a costly trap later and we can also help you fight some of the ridiculously restrictive rules and regulations of some CC&Rs. If you have any questions or concerns surrounding homeowners’ associations and the covenants, conditions and restrictions that they may come with, we highly encourage you to give us a toll free call at (310) 943-1171 to speak to our California homeowner association lawyers today.