A family in San Antonio made national news when they began to put up their Christmas decorations on November 1. The decorations included a Frosty the Snowman, a reindeer in a helicopter and assorted holiday-themed figures. It was not worth a second look until the neighborhood’s homeowner’s association (HOA) sent a letter telling the family to take down the decorations, “until closer to the holiday season.” The wife posted a copy of the letter on Facebook and it went viral, prompting coverage around the country chastising the HOA for not being in the holiday spirit, not to mention violating certain Constitutional rights.
Is it a good fit for you?
Many residential communities here in California and around the country have HOAs. These can provide a number of services, but some may find their authority intrusive (or Grinch-like). Those contemplating joining an HOA should ask themselves the following questions:
- Do the services provided justify the fees? Each association has different levels of services for maintenance of shared areas, utilities, insurance coverage, landscape upkeep and perhaps operating a clubhouse. Fees for premium services can be quite high.
- How well do they enforce the rules? Some are notoriously strict while others are fairly lax. It’s best to get a read on this ahead of time because someone not comfortable with others breaking unenforced rules may find it extremely frustrating.
- Are finances in order? HOAs should be able to pay for all the services provided, have a robust emergency fund and budgeting for capital improvements. Buyers should also check to make sure there are no current or upcoming assessments and negotiate that expense as part of the purchase agreement.
- What are the rules and regulations? There may be a deal-breaker in there, such as cars parked in the street, prohibiting short-term rental or no boats parked in the yard.
Disputes are common
HOAs typically will have a set of procedures for enforcing rules and punishing what it perceives as rulebreakers (this can include liens on property or even foreclosure for non-payment of fees). In cases such as these, it is often wise to consult with an attorney familiar with real estate law and how HOAs work. They can determine if the owner has grounds for a defense, or if the HOA is acting within its legal rights.
