Are You Prepared For Homeowner Association Life?

Before you sign on the dotted line and make one of the biggest financial investments of your life, find out everything you can about the homeowners association if you are buying into a development governed by one. How the association's financial, political, and legal activities function are very important to your investment and quality of life. Because you will automatically be held accountable to the rules of your homeowners organization, you need to decide before you make any written or verbal agreements to live there if those regulations suit your own lifestyle. If you comply with the governing documents, the association should not intrude on your privacy or quality of life. In fact, there are many advantages to enjoy. Poorly managed associations, on the other hand, can drag down property values and make living there difficult for residents. For these and other reasons, it is essential for you to research all that you can about a homeowners association before you become its newest member.

Start by studying the association's Covenants, Conditions, and Restrictions, or CC&R's - - in particular, the section that details the rules that may be important to you (such as: street parking, recreational vehicles, vehicle maintenance including washing, etc). Find out if you can live by those restrictions. For example, if the rules prohibit street parking of your vehicles, and you are a large family with six vehicles and only 4 parking spaces, this may not be the place for you. Don't purchase that condo, home, or lot thinking you can get away with violating the rules or even changing the rules later, because you may find yourself in turmoil with determined neighbors and Board of Directors. Get a copy of the community association's governing documents and read them carefully. No matter how long these might be to read through, you need to get a good understanding of the rules. If the legal wording gets too confusing, hire a lawyer to go over the documents with you. The investment now could save you time, money, and heartache later.

Find out all you can about the association's finances. Beyond reviewing the budget, talk to the association treasurer and find out if dues are expected to increase and if any special assessments are planned. If you are purchasing a condo, ask if special inspections have revealed problems with roofs, plumbing, or foundations that may cause a dues hike or special assessment later on. What about the reserves? Do they exist and are they adequate? Review the finances to see if the association has and is setting aside funds for future projects.

If possible, call and meet with the association president and attend a Board meeting. If you are the type of person who despises intrusions into your private life and the Board of Directors appears more interested in gossip about the residents than maintaining the property, this may not be the right place for you. Are the meetings conducted in a business-like manner, and are the residents treated fairly and professionally? A Board meeting will certainly reveal clues about the management of the association.

Speak with residents to get their views on the association's finances, its property manager, how it operates and any neighborhood politics. Associations are volunteer organizations with elected board members who may have either very little or a great deal of time to spend on the association. This may prove to be good or it might be problematic for the association. Talk to your potential neighbors to get their ideas about the community association. They may be able to tell you plenty about the group's dynamics, as well as their opinions about how well the association carries out its goals and takes care of business.

Lastly, take some time to understand how homeowners associations are legally organized and how business is conducted. Like all real estate investments, the more you know the better off you are. You can save yourself frustration if you find out beforehand that a community prohibits home businesses, street parking, etc. If you decide to live in a neighborhood governed by a community association, make a commitment to live up to the rules and regulations. The HOA lifestyle necessitates a certain degree of conformity. At the very least, pay your assessments on time and read the newsletters and the community web site. Attend the annual meetings where you may vote on amendments and elect members to the Board of Directors. If you want to play a bigger role in the community, join a committee, serve on the board or volunteer to help out with a project. Most importantly, remember the bottom line: You agreed to abide by the rules when you joined the community!

Mark Lewis, CMCA®, AMS®, PCAM®
President / CEO
Community Archives
Tucson, AZ