Moving to a new place of residence is always a big deal and there is much to be considered.  Of course it is important for individuals to select a home and neighborhood they are pleased with, but sometimes individuals neglect to learn about the association which their new home is a part of.  This could be a big mistake because home owners are obligated to abide by the rules and regulations of the association which they belong to.

What is a homeowner’s association?
More than anything else, the role of a homeowner’s association is to preserve the nature and value of a community.  The association accomplishes this by establishing a set of rules, known as CC&Rs, and ensuring their enforcement.  Typical CC&Rs include requirements to pay assessments, abide by architectural guidelines and the like.  By purchasing in an association, homebuyers are effectively making a contractual agreement with the HOA to abide by the CC&Rs.

In most cases, the association is run by a board of directors.  Directors are oftentimes volunteer homeowners elected by their fellow homeowners.  Larger associations may hire full-time, on-site managers while other associations may contract with management firms for selected services, such as financial management and maintenance.  Smaller associations may rely on each other for management and oversight.

How will a homeowners association affect me as a homeowner?
Homeowner associations vary significantly from neighborhood to neighborhood, but their most important function is to preserve the nature and value of a community.  Despite this virtuous purpose, however, complications oftentimes arise because of unrealistic expectations, misinformation and misunderstanding on behalf of the homeowner or the board.  Homeowners will have a much more positive community experience by learning about a community and the HOA before purchasing a home.  Those shopping for a home can do a few simple things to familiarize themselves with the association’s expectations:

• Consult with a real estate agent about whether the home in question is part of an association.
• If the home is part of an association, carefully review all governing documents, such as CC&Rs, Articles of Incorporation, Bylaws, Rules and Regulations, Design Guidelines, etc.
• If there are any questions about the documents, consult with an attorney for guidance.  This could prevent future stresses and expenses.
• Speak with members of the community and examine whether neighborhood facilities such as parks, pools and tennis courts are well maintained.
• Speak with the president and other members of the HOA board about what is expected in the community.

Homebuyers need to understand that by purchasing in an association they are effectively making a contractual agreement with the HOA to abide by the CC&Rs.  Typical CC&Rs include requirements to pay assessments, abide by architectural guidelines and the like.  While it is infrequently the case, sometimes CC&Rs are unenforceable because they are unreasonable or unconscionable.  Homeowners should speak with an attorney who is experienced in the area of HOA law if they object to their CC&Rs.

What questions should I have answered before purchasing in a HOA?
Homebuyers should not purchase a home until they are able to answer the following questions:

• How much are assessments and when are payments due?
• What are the assessments used for?
• What are individual homeowner’s responsibilities?
• How much can assessments increase every year?
• What is the budget?
• Are there any pending lawsuits and what for?
• Are the president and other board directors agreeable and friendly?
• Are there restrictions on renting the property?
• What are the architectural guidelines?
• Does the board get along well with and listen to the membership at large?
• What are the rules regarding outside antennas, solar panels, satellite dishes, flags, pets, clotheslines, fences, parking, home businesses, etc.?

How can I participate with a HOA?
It is just a simple fact that apathy leads to problems.  The best way to avoid such problems within a community is by becoming involved.  By doing so, homeowners can have a voice in the associations’ decisions.  Homeowners can attend meetings or serve on a committee or association board.  By doing so, individuals can protect their most precious investments, their home and community.

Can a homeowner association prohibit rentals?
As with most legal questions, the answer to whether homeowner associations can prohibit rentals is that it depends.  Legal assistance might be required to resolve this question, but here are some guideposts:

• If the CC&Rs prohibited rentals when the landlord purchased the property, rentals are prohibited.
• If the CC&Rs prohibit rentals, it needs to be determined whether the prohibition is a rule or a provision.  Associations with CC&Rs that grant the board with general rulemaking power may adopt rules restricting leasing of units so long as the rule benefits the community and is not arbitrary or capricious.
• If the association is amending the CC&Rs to expressly prohibit rentals there are a couple of things to understand:  Rental prohibition amendments to condominium CC&Rs require unanimous consent of all unit owners to be valid.  Rental prohibition amendment to planned community CC&Rs are valid if passed by the membership percentages set forth in the CC&Rs.
• Generally speaking, associations cannot enforce future amendments prohibiting rentals against members who relied on a promise made at the time of sale that rentals would always be allowed.