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Know Your HOA-Part 2
In last week's post about HOA's, I told you the basic premise of what an HOA is and I encouraged you to make sure you understand the fees that are assessed each month or quarter if you buy a home that is governed by an HOA. In this week's post I'd like to explain briefly why it is so important for you to know the specific rules and regulations of your current HOA and/or those governing a neighborhood in which you would like to purchase a home.
For the most part, HOA's are great protection for your home's property value. Some of the rules might seem unreasonable, but as one reporter for CNN Money says, "While the rules may seem arbitrary, you have to ask yourself, 'What if every resident did the same thing?' said Rathbun. In other words, the fact that your neighbor can't put his car on blocks in the front yard is probably to your benefit."
Your main responsibility as a homeowner in an HOA is to know the rules and regulations and to be a part of the democratic process that governs the HOA in which you live. By reading and knowing the bylaws, you can avoid costly mistakes, and by attending meetings, speaking up, and voting, you can guide what happens within your HOA. Being a part of your HOA will also establish more accountability toward those in leadership positions who make the decisions.
I'm amazed at how many people don't even think to ask for a copy of the bylaws when they buy in an HOA, or they get them and never read them. Just because you don't know the rules doesn't mean they cannot be enforced. I observed a flatbed truck picking up a completely finished outdoor shed one day in a neighborhood, and when I inquired about it, I found out the owner had built it without permission. Because the HOA bylaws of that neighborhood forbid building outdoor structures, the owner was required to pay for the removal of this new building. This very costly mistake could have been avoided if he had just read the rules before he started building.
States vary on the rights of HOA's. In some states an HOA has the right to foreclose on a home when fees have gone unpaid, and in others the unpaid fines simply tie up what should have been a pretty simple closing on a sale, sometimes for several days or weeks. Even in states where an HOA is not able to levy fines against a homeowner, they can file costly lawsuits and seek judgments that allow them to obtain liens against homeowners.
Most HOA's have commonsense rules that protect the homeowner's property, but you need to know what you're getting into before you buy a new property or before you try to change one that you already own. I'll be happy to walk you through what to expect and help you find a neighborhood that suits your needs perfectly!