Homeowners Associations

Breaking the rules can cost you more than the monthly fee

In 1992, Connie Cross was excited about purchasing her first home, a townhouse in Austell, Georgia. As a member of a homeowners association, she received all-inclusive services such as water, trash, and lawn maintenance for only $40 per month. But she was clueless about frequent problems with pipes bursting in the streets, leading to high water bills. And it didn’t stop there.

Soon, the pipes burst on Cross’ property and the homeowners association sent her a bill for $2,000. She didn’t pay it, and she stopped paying the monthly association fee. “I received letters from them with the last one saying they had placed a lien on my property for $4,300.”

Cross is one of the 54.6 million members of the estimated 274,000 homeowner and condominium associations and cooperatives in America. If you live in or are about to purchase a home in a community with a homeowners association — designed to provide community, governance, and business services — first, read the governing documents known as bylaws or covenants, conditions, and restrictions.

“Reading the CC&Rs can be a little intimidating,” says Ilona Bray, attorney, author, and real estate editor for Nolo Press. “If you have questions, ask a board member or talk to the neighbors about how the rules play out in real life.”

Like Cross, many buyers are initially delighted to join the homeowners association. Before becoming giddy at the thought, ask about dues, the due date, what’s covered, and how much the fee may increase. Keep in mind that these organizations may have the authority to regulate your house colors, fence designs, pool size, swing sets and basketball goals, mailboxes, outdoor lights, window coverings, pets, noises, and a myriad of other things.

“Regulations are put in place to preserve the nature of the neighborhood, preserve the property value, and meet the expectations of the residents,” says Frank Rathbun, vice president of communications for the Community Associations Institute, a nonprofit organization dedicated to fostering more effective communities. “Homeowners associations are critically important. They provide services and meet the expectations of homeowners in the community as well as provide amenities residents have come to expect.”

According to CAI, 75% of homeowners are either extremely or very satisfied with their association. But if you feel like Cross, there are ways to resolve conflicts and concerns without withholding dues or bills owed to the association, which can place a lien on your property or cause the city to foreclose on your home.

“The decision to foreclose is based on many factors, including the amount of debt, financial health of the association, reason for the debt, homeowners’ willingness to pay, and the ability to bring the account up-to-date,” says Rathbun. “The magnitude of this decision requires an approach that is fair, reasonable, and consistent with practices and procedures established by the association’s governing documents.”

In order to have an effective homeowners association, rules and regulations should be fair, clearly defined, and reasonably enforced. Get involved in your association, join committees, and if you’re unhappy with present board members, make your vote count.

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