When you decide to buy a new house, don't put all your energies into the house; give some thought to the homeowners association in each new home community that you are considering. How well it is managed will affect your enjoyment of the community, and its rules and regulations for homeowners could impinge on your enjoyment of your own house. Check out both before you sign on the dotted line with a builder.
The "Rules and Regulations" section of the association's homeowner manual spells out what you can and can't do around your house. Despite the occasional sensational news story about "heartless homeowner association forces heartbroken homeowners to give up beloved pets," most rules are grounded in common sense, and written to maintain good relations between neighbors. When quarter to half-acre sized lots were the norm, a homeowner's activities didn't have so much impact on adjacent owners. But, as lots become smaller and narrower and houses are closer together, "what people do is a lot more in your face, and most people do not like to see pink houses, old cars up on blocks, or a half-built deck sitting unfinished for five years," noted Fairfax, Virginia, real estate attorney Bob Diamond, who has specialized homeowner association issues for the last 25 years.
The association rules are also intended to maintain property values. There will be rules about upkeep for a home's exterior and lawn maintenance and as well as specific approved fence types, fence materials, plant materials, trees and so forth. This type of regulation may be more exacting if the project is large and the developer expects to be there for ten years or longer; he doesn't want the older sections through which buyers of the new houses must pass to look bad.
The stipulations, no matter how aggravating, are legally enforceable-if you install a fence that doesn't follow the association guidelines, the association can make you tear it down. Depending on the association, there may be some flexibility, but you have to get approval first. You may feel that it's hard to argue with an ecologically sensitive, water-conserving xeriscape made up of native plants instead of the association-stipulated grass for your front yard, but the association may not agree.
Check for rules about renters if you plan to buy a house in an area that is a vacation destination-say Florida or Santa Fe. You don't want the house next door or a substantial number of houses in your neighborhood to have tenants on short-term one or two week leases. Besides concerns about a steady stream of strangers in your neighborhood, such a constant turnover makes it hard for the full time residents to create a sense of community.
If you're one of the millions of Americans who telecommutes and works at home, make sure this is acceptable to the association. Since you will mostly likely be on the phone or glued to a computer screen all day, your work will not disrupt the neighbors, but you still must verify that this is acceptable.
The most often noted association rules are the ones about pets. Some are very specific-no more than two domestic animals per household-and some are flexible, allowing a wild or exotic pet such as a boa constrictor, but requiring the homeowner to carry extra liability insurance.
The manual will also spell out the responsibilities of the association, on behalf of all the homeowners. Does it handle trash removal? Snow plowing? Operate and maintain recreational facilities such as a pool, tennis courts, jogging and bike paths? Are all the roads within the community private and does the association maintain these as well? As the list of amenities and services goes up, so does the mandatory association fee. And, if you don't pay it, the association can place a lien on your house, charge late fees, demand that an entire year's fees be paid in advance if you are late several payments in a row, and prohibit you from using any of the amenities until the fees are paid.
After you've read the association manual, you need to see how the association operates in real time. That is, you need to find out who is managing all those amenities and services and how well they are doing it. If the community is small enough-25 to 75 houses-the management may be done by the Board of Directors and volunteers. But as the number of households approaches 75, some professional management is usually needed. A part time manager or an off-site management company may suffice. As a general rule of thumb, as a community approaches 1,000 units or enough amenities to generate an annual budget of $1 million, the duties of management are vastly increased, and on-site, full-time, management is required. If a community that you are interested in has a property manager, you should meet this person and inquire about his credentials and experience. If the association has a contract with a management company, make inquiries about it as well.
A property manager oversees the day-to-day affairs, but ultimate responsibility and authority rests in the Board of Directors, who are initially appointed by the developer and later elected by the homeowners, as households move in. The board meetings are open to the public, so ask when the next one will be held and plan to attend. Not only will you meet the neighbors you will be dealing with if you buy there, you will also learn about the issues in that community. If you want to be really thorough, get the meeting notes for the last six months. The community should also have a monthly newsletter, another good source of information.
You should also ask for an association financial statement and study it carefully. The source of the association funds are the homeowner fees, so check for delinquencies-are there a substantial number or do members pay promptly every month? The budget should provide for both annual operating expenses and major maintenance or replacement expenses. Since you don't want to be slapped with a $5,000 assessment six months after you move in, make sure that the reserves are adequate. If a reserve study has been done recently, ask to see it. Should the reserves not be in accordance with the study, ask why. If there's no reserve study, ask about special assessments. If the community has a history of these, the reserves are likely to be inadequate (the exception to this is Florida, where a homeowner association may not be required to keep a reserve fund).
Another important aspect of association life is its volunteer committees; how well they function can speak volumes about a particular community. To maintain property values, the grounds committee enforces the association rules on front yards and exterior maintenance; how it goes about its job can help or hinder neighbor relations. A low-key, regularly scheduled committee tour of the various neighborhoods, followed up with a note, e-mail or phone call to homeowners,-the gentle prodding approach-generally elicits more cooperation than a committee that acts only in response to a complaint. The singled-out homeowners are understandably defensive; more importantly they're less likely to be cooperative.
An effective social committee ensures that neighbors meet and periodically interact with each other at social events such as block parties, annual picnics, or some other social function that the residents want to do. When a community is in its early stages and all the residents feel like pioneers, the community spirit is high and most residents participate in community events; maintaining this over the long haul is harder. In some larger communities, the association may have a concierge service, which plans social events.
If you are looking at a community in its earliest phase, the homeowner association manual will be available for your review, but the association itself may not yet be up and running. In that case, your best bet is to visit other communities that the developer has set up and talk with the property manager, residents and homeowner association board members there. If things are running smoothly, it augurs well for the new community that you're considering.
For more information about homeowners associations, contact the Community Association Institutute, (703)548-8600 or http://www.caionline.org/. CAI recommended publications for new home buyers: "The Homebuyer & the Community Association," "Be Reasonable!" and "Pet Policies."
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