Purchasing a home in a development with a homeowners association (HOA) can look like a wonderful idea until you violate one of the HOA’s bylaws, which are designed to maintain an orderly community and prevent members from actions that might bring down property values. However, these rules also control members’ decisions in modifying their property and other areas and are at times seen as encroaching on individual freedom. Bylaw violations can result in hefty fines for those who fail to follow the rules.
Fines are regulated by state laws and are intended to be reasonable, with their purpose being to generate compliance, not income for the association. Whatever their function may be, it’s important to understand an HOA’s bylaws, and the following are some steps to take before joining one of these communities.
Study the Contract
If you own a vehicle that bears your company’s name, and your HOA’s bylaws forbid that, you’ll have to either buy another vehicle or live somewhere else. Don’t be concerned that the documents are legal contracts. Appropriately written HOA texts should contain wording that any layperson can understand.
The covenants that delineate what can and can’t be done with the property are filed with the local county, so potential buyers can study them before deciding if they want to live there. However, HOA bylaws, which may also contain limitations, are not submitted to the government, so they need to be acquired from the homeowners association.
Learn about HOA Fees and How the Money is Used
HOA fees typically levied as yearly dues, cover the cost of insurance, landscape maintenance, and other communal operating costs. Check to see if the dues are capped and how frequently they can be increased. It’s also a good idea to learn about the association’s financial reserves, checking if the reserves are fully funded and if they contain enough money to cover emergencies.
Look into Insurance Coverage
HOA insurance should cover disasters such as fires and tornadoes, but make sure to learn how much and what type of insurance your HOA has. For example, the outside of your property should be covered by the HOA. Insurance can also protect an association against lawsuits.
An HOA’s bylaws establish the number of seats on the board of directors, and this number may be influenced by the developers. The fewer board members, the better the chances are that developers will have disputes ruled in their favor.
The contract should detail how to file complaints, which is best done in writing, along with documentation, such as bills for work that the HOA should cover.
If you’re planning to buy a home in a community with an HOA, give us a call anytime at Bell & Shaw Law, LLC. We’ll be glad to assist you with any questions you may have about the ins and outs of HOA bylaws.