Homeowners Associations, or HAs, are legal entities created to maintain common areas and maintain deed restrictions. Most condominium and townhome developments, and many newer single-family subdivisions, have HAs, which are usually created when the development is built. Covenants, Conditions and Restrictions (CCRs) are issued to each homeowner, and Homeowners Associations are established to ensure that the CCRs are adhered to in order to maintain the quality and value of the properties involved.

Features of Homeowners Associations

• Membership is mandatory for all property owners within the development.
• Members are charged mandatory fees.
• Many HAs publish newsletters.
• HAs have the authority to enact and enforce maintenance and design standards in order to those established by City ordinances.
• HAs are corporations with formal bylaws. There is usually a governing body that hires a property management company to handle maintenance and enforcement issues.

What is provided for

Each HA is a little different. Some are a little more uptight about governing the individual homeowners for instance, banning clotheslines or nets, or requiring that all lawn decorations or furniture have to be pre-approved by the governing body. Nevertheless, it is common for a Homeowners Association to take care of some or all of the following:

• Maintain community landscaping
• Maintain recreational facilities
• Provide space for events or neighborhood functions
• Provide security
• Arrange for street maintenance
• Establish and collect maintenance fees needed to run neighborhood operations
• Enforce deed restrictions

Things that are restricted

• Street parking
• Landscape approval or types of plants
• Fence and pool restrictions
• Erection of basketball hoops or tree houses
• Storage of boats and RVs
• Number of pets
• Age of residents
• Garage door being open (seriously)

Prospective home buyers should:

• Read the CCRs for the home and make sure they can live with the restrictions. Some people dont mind, because it means they wont be stuck next to a neighbor whose house brings down their own property value.
• Find out what the current dues are. Once the home is bought, the homeowner cant decline to pay the dues. The homeowner can be evicted and the house could be liquidated to pay the debt created by the refusal to pay dues. Homeowners Association dues can range from $20 a month to hundreds of dollars, depending on how much stuff is provided for (for example, trash pickup and lawn care will drive the cost up).
• Find out how often the dues have been raised during the history of the Homeowners Association. Are there cash reserves?
• Do the governing board members have term limits? Have they attended training sessions on governing Homeowners Associations?
• Is there pending litigation involving the Homeowners Association?

There are an estimated 50 million Americans living in some sort of association-governed community. The estimated real estate value of homes in community associations is about $2 trillion. Annual operating revenue for U.S. community associations is $30-35 billion.

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