Homeowners Association Issues
There are a number of issues that arise when a Homeowners Association is involved in a legal claim. It is important to analyze a Homeowners Associations’ Covenants Conditions and Restrictions (CC&Rs) and governing documents prior to purchasing property that is subject to a Homeowners Association (HOA). Has the HOA been involved in litigation? Are the HOA’s financials sound? Are there any provisions in the CC&Rs that will prevent you enjoying your property? These are all issues that need to be considered before you acquire a property because typically CC&Rs have rules that regulate all aspects of property ownership including:
- Architectural Restrictions. Many CC&Rs limit what types of improvements you can make to your property and require HOA approval before such improvements can be made. Many individuals are surprised to learn that some CC&Rs even regulate what type of improvements you make inside your property.
- Common Area Usage. While common area amenities may be appealing it is important to understand the restrictions that can arise with respect to common areas. Even more critical is knowing which areas fall within the “Common Area.” Often litigation can arise because when a certain area is damaged the HOA claims it is the responsibility of the owner to repair. In turn, the owner and their insurance company claim that the damage is the responsibility of the HOA because it is part of the Common Area.
- Easements. Often HOAs will reserve for themselves easements across an owner’s property or, alternatively give owners easement rights across common areas. Sometimes such easements can be for emergency access, right of way, drainage, repairs or a myriad of other uses.
- Landscape Restrictions. HOA litigation can arise from nothing more than the planting of the wrong type of tree or shrubbery. It is important to understand the nature of an HOA’s landscape restrictions.
- Maintenance Requirements. HOAs can require that owners maintain their properties in a certain manner. Similarly, the HOA is required to maintain common areas of the development. Problems arise if a large repair, liability or expense is incurred by the HOA in which case the HOA must pay for it by assessing a large “special assessment” against its residents.
- Neighbor Disputes. The CC&Rs sometimes even regulate relationships among neighbors such as view and common wall issues.
- Parking Regulation. A frequently area of contention with HOAs is parking. Owners invariably cannot find sufficient parking for their own vehicles or guest vehicles. Additionally, HOA’s often restrict the type of “vehicle” that can be parked in a development such as large vehicles, commercial vehicles, trailers and recreational vehicles. They also regulate how garages and assigned parking spaces can be used.
- Pet Restrictions. HOAs usually limit the number and types of pets that can be kept by a homeowner and in some cases even limit the size and breed of the pet.
- Restrictions and Regulation of Tenants. Most CC&Rs regulate the use of common areas by non-owners. If you intend to lease out your property, you need to make sure that your tenant is aware of the Rules and Regulations of the HOA and its CC&Rs. Most of the time the HOA will hold the owner of the property responsible for the acts of the tenant.
- Senior Citizen Housing Restrictions. Some HOA have age restrictions such as in the case of “Senior Resident” developments. It is important to understand these rules and how they will affect your property.
Homeowners Associations also have the right to place a lien against a property for past due assessments. It is critical to make sure you are acquiring a property that has CC&Rs you can live with, a HOA managed by a competent management company that has plenty of reserves in the event of an emergency or unanticipated repair or costs. Owning property that is subject to a restrictive HOA can be very difficult and costly.