REAL ESTATE TOPICS...HOA Rules Vs. CC&R: 7 Mistakes That Hurt Homeowners

If you’re new to the world of HOAs and CC&Rs, be careful not to make these mistakes, because they could really cost you.

When you move into a new home, there’s a long list of things you need to know: how to work your new abode’s HVAC, what day is trash pickup, and what’s the story with the sketchy neighbor down the street. But there are two things you should have dug into before you purchased your home: your homeowners’ association (HOA)’s powers and your neighborhood’s covenants, conditions, and restrictions (CC&R), the handbook outlining your community’s household dos and don’ts.

“People are often sold property with no idea of what the [community] restrictions are,” says Bob Tankel, founder of Tankel Law Group in Tampa, FL, which focuses on helping community associations throughout Florida. And that could spell trouble for you when it comes time to add that screened-in porch you always wanted or a flagpole in your front yard — or when it’s time to list your home for sale in Miami, FL, or Seattle, WA. Here’s a list of the common misconceptions about HOAs and CC&Rs.

Mistake #1: Thinking the HOA is out to get you

It may seem as if your HOA is trying to make your life miserable by placing certain restrictions on things such as what color you can paint your home, but the truth is, “HOAs actually are set up as a corporation that benefits the membership by increasing property values and allowing each member to enjoy the common-area amenities,” explains Joe Winkler, vice president of marketing with Keystone Pacific Property Management in Irvine, CA. “This can be done by reasonably enforcing the governing documents and making sure the association is clean, attractive, and provides ways for members to build a sense of community.”

So while you might get annoyed when you receive a notice about your lawn’s scraggly state, it’s in the best interest of the whole neighborhood — including yours — to mow it and keep your yard in check.

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Mistake #2: Assuming the HOA always wins

It’s true that most HOAs have a fair amount of power, but the people who run the organization can make all the difference. “As a member of the corporation or community, each member has the power to elect fellow members who they feel best represent the values of the overall membership,” says Winkler. “In addition, each member can run for the board themselves or get on a committee like architectural or landscape. This is a great way to give positive input on how the association is run.”

Bottom line: If you don’t like the way your HOA enforces the rules (or you don’t like the rules themselves), it might be a good idea to take on a role within the organization.

Mistake #3: Assuming what you don’t know about the CC&R can’t hurt you

Oh, but it can. “The wrong way to learn the rules is to break them,” says Vera Kiser, a licensed property manager and former community association manager in Atlanta. “If there is something an owner likes to do on the exterior of their home, like wash or fix cars, let neighbors parallel-park, hold pool parties, or remove trees from their property, they best read the rules before buying the house.”

If you or your tenant break a rule detailed in the CC&R, many HOAs are given the power to place liens on your home, and if they do, selling that home can be difficult, if not impossible. Worst-case scenario? Your home could be foreclosed on and the property could be sold to settle your debt.

Mistake #4: Thinking your vote doesn’t matter

In many instances, not voting causes more problems than there are in many communities with active neighbors. “This [thinking] is exactly how lunatics get in and make poor or personal decisions with your HOA dues,” says Kiser. “Always vote. As the saying goes, ‘Don’t vote, don’t complain.’”

Mistake #5: Figuring you’ll have no power in a neighborhood with only CC&Rs

Not so, says Sharon Voss, president of the Orlando Regional REALTOR Association. “Homeowners whose CC&Rs are not being upheld can often turn to their local city or county government code enforcement,” she explains. “CC&R specifics frequently run parallel to municipal codes, so a violation against a CC&R is likely to also be a violation against a municipal code.”

Mistake #6: Thinking CC&Rs are too lenient on renters

“I’ve professionally managed both renters in covenant communities and owners in the same,” says Kiser. “I’ve found that renters often care for the property better than the absent owner, and it’s the owner that is throwing the wild parties and leaving trash at the pool. Tenants are extremely responsive to CC&Rs if they know about them before they are blindsided with a violation letter. Tenants know they are looked down upon anyway and can be forced out of a community faster than an owner can, so who do you think will want to keep the lowest profile? Tenant or an owner?”

Mistake #7: Assuming membership in the HOA is optional

In a word: rarely. “If you are one of those people who wants to be free to do whatever you want with your home, or if you feel you don’t have to pay dues if you don’t use the pool, be sure you know if you are buying into a mandatory HOA or an optional one,” advises Kiser.