When it comes to homeowners’ associations (HOAs), some people are completely turned off, and others live by them. HOAs are in a delicate position, after all. On one hand, no one wants to be told exactly what shade of tan they must paint their house; however, no one wants to live next to a home that looks as if it has been abandoned for 20 years either. Luckily, HOAs are not out to ruin homeowners’ lives, and they’re certainly not looking to get tied up in legal battles. In fact, HOA rules were created to keep neighborhoods safe, clean, and friendly.
But how do you know if the neighborhood in which you’re about to buy a home (or the one in which you currently reside) has an upstanding HOA? Use these tips to assess if your HOA is a good one.
Buying a house you love is a lot like a first crush. You’re so smitten with your beloved that you could fail to see the potential negatives and, in the case of a home, a really poorly managed HOA. Such was the case when Gary Duell bought his Happy Valley, OR, condo. “There were no maintenance reserves,” says Duell, who currently serves on his neighborhood’s HOA. “Roofs were leaking; the grounds were a mess; staff were using and occupying vacant condos for personal and business use.” Because the property was still majority-owned by the developer, the developer was in charge of the HOA, which was poorly managed by his management company. But Duell and some neighbors were not about to let their homes go under. By doing a little homework and digging into their rights in the bylaws and under state law, “a small group of us took over the board long enough to fire the developer’s management company,” he says.
Don’t want to end up in a hostile takeover situation of your HOA? Do your homework on the HOA before you buy. Some states even require it. “In Pennsylvania, at or prior to closing, buyers get a certificate from the HOA, which states the deficit and surplus of the neighborhood’s budget,” says Jason Rabinovich, a real estate attorney in Philadelphia, PA. “Buyers should also demand that their real estate agents obtain the same as quickly as possible after signing the agreement of sale.”
What better way to get a real feel for how a neighborhood’s HOA works than to simply attend an HOA meeting? (Check your state’s laws, though, as not all potential buyers are permitted to attend these meetings or have access to the board’s minutes, says Rabinovich.) Years ago, after Duell first realized how mismanaged his property’s HOA was, he wished he’d taken the time to attend one of the board meetings. “You really want to see how well the meeting is being conducted,” he says. “Is there a board representative for the homeowners if the developer still owns the property?” If there’s no homeowner representation or the meeting is conducted poorly, those are red flags that something is amiss.
You don’t necessarily need to know everything about the people who once owned your home. But it does help to find out if they were up to date on their HOA fees, if there are any existing fines, and, of course, any outstanding HOA requests. Just a few months after Amanda Davis moved into her New Jersey home. she received a letter from the HOA stating they needed to power-wash the exterior of their home — or they’d be fined. “The old owners never power-washed it nor told us the HOA had contacted them about doing it, and we were never notified we were required,” says Davis. “It was the middle of January, freezing cold, and we called four or five companies to power-wash it, but none would do it. We asked the HOA to let us wait until spring, but they refused. So at nine months pregnant, I bought a power washer and did it myself in the cold.”
To keep a community safe and looking good, the HOA or its management company will often do site inspections. Some require an interior inspection of a home when you move in to ensure everything is up to date (which was not the case with Davis’ situation, above), while others will randomly inspect throughout the year, looking for neglected yards and landscaping or anything out of the ordinary (read: a massive boat permanently parked in the driveway). “Years ago, we cited a home in a community for a rake board that needed to be repaired,” says Tab Ratra, president of Community Inspection Services Inc. in Gaithersburg, MD, as well as co-host of HOA Talk Time Podcast. “The property owner was upset and wanted to know why they were being cited and was anyone else cited for the same thing. We responded to the property owner and explained that we inspected the entire community, not just her home. This eased her concerns. Furthermore, we provided a picture of the item and explained that these inspections improve the entire community and everyone’s property value.”
Some neighborhoods are lenient when it comes to landscaping changes, renovations, or additions to a home’s exterior. But others are … well, not. Either way, if you plan to change anything on the outside of your home, it’s best to know the approval process — and follow it. “Some neighbors had requested permission to put an asphalt shingle roof on their house because of its low pitch, even though asphalt shingles are not permitted in our community roofing standards,” says Mary Westheimer, an HOA board member in Phoenix, AZ. “The request was granted although the vote was not, as usual, unanimous. Unbeknownst to us, a previous board had fought their across-the-street neighbors, who had put on an asphalt shingle roof. He was a lawyer and threatened to sue. Our board president, who had voted ‘yes,’ and I, who had voted ‘no,’ went and talked with them and explained the situation, averting a lawsuit and bad feelings.”
It can be (and has been) done. “In many states, you can start a petition against a rule and get a number of unit owners or members to sign the petition,” explains Matt Jelinek, a licensed community and association manager for the Galleria Group in Oakland Park, FL. “Another [way] is through the formal channel of the board of directors and getting a vote. You’ll see these interesting little slips of paper in most states when your annual meeting comes around. Usually, one is a general proxy and the other is a limited proxy. If you really want to effect change, knock on your neighbors’ doors and ask if they plan to attend the annual meeting. If not, ask if you can have their general proxy. A colleague of mine in an HOA had a board president who went door-to-door with a checklist in a 140-unit HOA. They had a seven-member board and he showed up with 130 general proxies. Guess who got what he wanted?”
But this is not without its battles. “The only challenge you’ll have is getting the review for that rule on the agenda for the annual meeting,” says Jelinek. “It generally doesn’t happen like that. But you can replace the board members who are up for re-election or not in favor of amendment of the rule.”