Technology in Real Estate
Navigating HOA Rules
Excerpted from NAR Realtor Mag.
Presented by Stephen Lee with CRI
HOA Rules: Considerations for Real Estate Agents, Buyer and Sellers
Overview
* The number of homes that fall under a homeowners association is rapidly growing, and real estate professionals play an important role in educating their clients about the pros and cons of HOAs.
*About 75.5 million Americans reside in a community that’s governed by a homeowners association, representing more than 30% of the U.S. housing stock, according to the Foundation for Community Association Research
HOA (Homeowners Association) ?
* An organization that governs a housing community composed of individual houses, townhouses, high-rises or condos. The HOA collects fees from homeowners to cover the costs of maintaining common areas and shared amenities and services as well as enforcing community rules for items such as exterior property upkeep.
Average HOA Fees
$291 — Average monthly HOA fee in the U.S.
$3,500 — Average annual HOA fee
3 States With the Most Homes Under HOAs:
- California: 4.9 million (37% of all homes in the state)
- Florida: 3.9 million (45%)
- Texas: 2.1 million (20%)
Most common services provided by HOAs:
- Neighborhood landscaping
- Security
- Personal landscaping
- Sports and leisure amenities (e.g. pools)
Most common HOA violations:
- Landscaping-related issues
- Design changes to the exterior
- Fencing complaints
- Trash pickup violations
HOA Rules and Regulations
Governing documents
*Covenants, conditions and restrictions (CC&Rs)
– Community’s constitutions
– Not easy to change : vote by Homeowners
*Rules and Regulations
– Rules for day-to-day basis.
– Easy to change :vote by the HOA board
*Bylaws
– Guidance for how the organization will function.
– Election rules, board member responsibilities and meeting protocols.
* Articles of incorporation
– Legal document establishes the association as a nonprofit corp.
* Plat
– Line drawing filed in local land recording that shows
the physical layout of the community, identifying the
location of individual units, common areas, roads and open spaces.
Organization of HOA
* Board of directors
* President of the board of directors
* Homeowners Association members (Homeowners)
* Property management company
Examples of Common HOA Rules
- Landscaping, such as mowing expectations, weed control, acceptable plants or trees, and fertilizer or pesticide usage
- Home exteriors, such as limitations on paint colors, yard signs, fencing, deck or patio construction, sheds and mailboxes
- Decorations, such as holiday displays, lawn ornaments and flags
- Vehicles and parking, such as how many vehicles are allowed, types of vehicles permitted (e.g. RVs or commercial vehicles), street parking allowances and guest parking
- Pets, such as size, weight, breed, number per home and pet waste management
- Noise complaints, such as quiet hours and crowd size restrictions
- Home occupancy limits, such as the number of people who can reside in a property
- Trash pickup, such as when trash cans must be placed on the curb and removed
- Rental restrictions, such as policies on long- or short-term rentals
- Policies for common areasregarding crowd size, hours of operation, visitor policies, and code of conduct
Unenforceable HOA Rules
More than 30% of homeowners nationwide say their HOA has too much power, and 10% say they want to sell their home because of their HOA, according to a 2024 survey conducted by Rocket Mortgage.
Some states prevents HOAs from banning the following issues:
*Political signs:
*Outdoor clotheslines:
*Solar panels
Condo Resale Package
* Master Deed
* Bylaws
* Resale Certificate
* Budget and financial statement
* Meeting minutes
* Insurance policy
* Reserve study
Document for mortgage process
* Condo questionnaire
(* FHA Approval)
