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What You Need to Know about Your New Homeowners Association

Category: Active adult communities

Updated October 17, 2016 — This is the 2nd of a 3 part series of articles about homeowners associations, the organizations that have an outsized influence on your life in a condo, 55+, or active adult community. Sometimes they are called Property Owners Associations, or simply Community Associations. The first article, “Meet the New Boss, Your HOA”, talked about many of the problems to be of aware of concerning Home Owners Associations. Part 3 focuses on “What You Need to Know When the HOA Takes Over from the Developer“. In this article we were fortunate to gain an in-depth interview with Joe West, CEO of Community Associations Network, who provided his insight on the basics everyone should know before they commit to living in any community governed by an HOA. Joe’s organization, which is found at, is the largest free website of information for condo and HOAs (if you are serving on an HOA board – you need to get familiar with this site!) The third article in the series will cover the important points to consider when the day-to-day management of the community passes from the developer to the HOA, which typically happens once all or most of the units have been sold.

TR: What’s the first thing we should know about Home Owners Associations?

Joe: The first thing that you need to know is what the association is responsible for and what you, the owner, are responsible for. Sometimes the terminology can be confusing. In a condominium association, generally
the association takes care of everything from the perimeter walls out, including roofs, siding, roads, lawns, etc. In a Homeowner or Property Owner association, the association generally takes care of the common areas, which may include roads, gates, amenities and so on. They usually don’t take care of the home or structure, itself. However, this will vary from association to association and from state to state. In some states, the media and owners often refer to both types as “HOA’S”, even though it may actually be in a condo. This is why it’s so important to read and understand the documents, sometimes called “CC&R’s” (Covenants, Conditions & Restrictions) or Master Deeds & Bylaws. The generic term “Community Association” covers all of the forms of associations where membership in the association is mandatory. Unfortunately, laws governing the nation’s estimated 270,000 residential and commercial HOAs are confusing and sometimes non-existent. States like California and Florida have extensive laws governing them, but many other states have just a condominium law or a poorly written, often amended HOA law. As we shall see, the absence of clear legal guidance can be a problem.

TR: Joe, what is your number 1 piece of advice for anyone buying into a development with an HOA?
Joe: That one’s easy – Don’t fall in love with the house before you check out the association. You have to be comfortable with a few important things: the rules that you will have to follow, the people governing the organization, and its finances.

TR: Could you give us an example of why that’s important?
Joe: Sure. Especially today, because of the economy, there are some community associations where a 1/3 or more of the owners are not paying association dues. What that means is that at least in the short term, the remaining residents will have to make up for that by paying higher fees and special assessment s. The people who live in condos generally understand that the building has to be maintained and that there will be expenses required to keep it running. But in HOAs, particularly those with predominately single family homes, the new residents don’t realize the scope of the infrastructure that has to be maintained – roads, landscaping, recreational facilities, etc. That requires money, but the benefits aren’t always visible. Similarly new residents are usually not prepared for the amount of HOA control they are now under. After years of living in the suburbs where their home is their castle, many become upset when they realize that exterior colors, fences, decorations, and improvements will be tightly controlled in their new community. One of the key areas that is often overlooked when someone is moving into the association is, how does the board govern? The basic rule of associations’ is that good boards make good associations – bad boards make problems. Make sure you read the minutes of board meetings before you move in (at least a year back) and once you live there, pay attention to what’s going on and who you elect.

TR: To be better prepared, what steps should a new buyer take before entering into a contract to buy a home with a Home Owners Association?
Joe: The first step is to gather the information to help you assess the HOA. Unfortunately that’s not always easy. In many states, the HOA is often prohibited from providing a new buyer with information directly. So anything you get will have to come from the seller. You should ask for the HOA master deed and by-laws (governing documents), recent minutes, and financial statements at a minimum. While some states, like Virginia, have strong disclosure rules protecting buyers, many other states have no rules at all, even though disclosure is in everyone’s best interest.

Secondly, you either have to read and understand these documents yourself, or hire a lawyer, financial planner, or accountant to review them for you.

Third, if the seller unreasonably delays getting you the documents, or won’t provide the information you asked for, be prepared to walk away. There is probably a reason why they won’t, a reason you want to stay away from. At a minimum you can get some of this information by going to the local office where deeds are recorded and ask to see the restrictions and covenants that are attached to the property. Unfortunately, the minutes and financials (last audited financial statement, current year-to-date financial statement and current budget) will probably have to come from the seller.

TR: What kind of problems are you seeing in HOAs and condo associations these days?
Joe: First, let me say that the vast majority of these associations are well-run. They take care of problems and they maintain their properties. The problems we see among community associations usually come when they are not proactive, instead reacting only after an issue has arisen. There are many problems that can occur in a community, because you are dealing with people and their “castles”, but most of them can be avoided with planning and oversight. More problems are coming up all the time, and associations need to be ready for them. Since the advent of the Internet, a issue in Florida can and will become an issue in New Hampshire at lightning speed. A case from a few years ago in Chicago, where a Jewish couple’s mezuzah was prohibited on the exterior condo doorframe (a common area), is a good example. That case led to a discrimination suit because Christmas wreaths were allowed on doors. Thanks to the Internet, it quickly became an issue for communities across the country. Pro-active solution: What can or can’t be placed on a common area needs to be thought out in advance and take into consideration our multi-cultural, multi-religious society.

Another big problem is not being pro-active financially, which means planning ahead and establishing reserve funds. Condo associations generally understand the need to plan for and adequately fund reserves, but often HOA’s ignore or underfund them. If the board never gets around to setting up a reserve for their maintenance or replacement, a big assessment will come out of the blue some day and cause much heartache.

Lastly, lack of transparency is a frequent HOA board problem. Meeting minutes should be quickly and prominently posted. Members of the community have a right to know what is going on and have the ability to provide some type of input. Associations should have newsletters and a web site to provide solid information on a timely and continuing basis.

2016 Update: Topretirements: Is there anything significant that has changed since we first interviewed you for this article back in 2009?

Joe: Most everything in the original interview still applies. But there are now new issues to consider; i.e. short-term rentals, drones, infrastructure replacement (dams, roads), fraud & embezzlement, political signs, etc.

TR: Thanks Joe, we appreciate your advice.

For Further Reference:
CommunityAssociationsNetwork is the largest free website for information for condo and HOAs. This useful site links to over 13,000 articles and news stories about community associations, plus a very helpful newsletter.

Part 1: Meet the New Boss, Your HOA
Part 3: What You Need to Know When the HOA Takes Over from the Developer
Home Owners Associations: Friend or Foe?

Comments What has your experience in a HOA or POA? Be sure to add your feedback in the Comments section below, or go to Part 1 in the series, which has over 90 Comments already!

Posted by John Brady on December 1st, 2009


  1. […] (HOA’s). Part 1 was called “Meet the New Boss – Your HOA“, and Part 2 was “What You Need to Know about Your Home Owners Association“. We are grateful to Joe West, CEO of the Community Associations Network, for his assistance […]

    by » What You Need to Know When the HOA Takes Over from the Developer Topretirements — March 2, 2010

  2. I live in a community with an HOA. My home is a single family residence, and the community is not age-restricted in any way. Just to clarify that HOAs aren’t restricted to condos, 55+ communities, or age-restricted communities, as the intro implies.

    by Jan Cullinane — October 19, 2016

  3. I have been looking at a condo in WA and asked for the Condo associations rules to access their rules on pets. My realtor told me I could not get the information until after I made an offer for the condo and that I could opt out of the contract and get my deposit back if I had problems. I found that very scary and probably will end up looking elseware.

    by Shumidog — October 19, 2016

  4. I am on the board of an HOA in AZ. We have a management company. We have been advised by the company that we cannot financially enforce the fines of the CCR. Let me explain. If we fine someone for doing something prohibited by the CCR, we cannot get a lien against the property to make them pay. If we try to enforce payment of the fine at transfer of title, we can be sued for damages for impeding a sale. Thus we have no real ability to collect. Most owners do not know this and pay their fines however some have figured it out and basically give us the finger. The only time we can collect the fines is if the homeowner pays months in advance for their dues.
    Another issue that has come up is foreclosures. When a bank takes over a property, they immediately stop payment of dues. When the home goes to auction, we have no standing and cannot collect back dues. Does anyone know how to deal with this?

    by Ed — October 19, 2016

  5. Great continuted article John. This is a really valid area of concern for a lot of boomers. Trailer parks, condos, townhomes, etc. might have governing bodies. My special “trick” for dealing sticky issues is the power of smart writing. A well layed out point of view at least garners respect toward working diplomatically. (Pardon spelling errors, I’m away from my desk with dictionary and thesaurus)

    by Gregory — October 19, 2016

  6. Shumidog, your realtor’s advice is wrong.

    by gary — October 19, 2016

  7. HOAs become real dictators and the Board members take advantage of their positions because other Board members rely on other Board to give them what they want so they can can get quid pro quo. The management company, condo attorney, and staff aren’t in a position to refuse.

    by gary — October 19, 2016

  8. Ugh, I have very mixed feelings about HOA. When we moved into my new house in Florida back in 2002 we encountered a HOA. I do like the maintaining of community standards except we have found that they are not evenly enforced. Our house is the first one you see entering the neighborhood. All traffic entering/exiting must past our house. For some odd reason the residents seem to think our standards need to be higher. What is given a pass further within the neighborhood is flagged for us. We had many run-ins through the years until people finally mellowed. What makes the problem really annoying is the board is run by the same 6 to 8 people, year after year. I used to go to the meetings, but not anymore. I even tried getting elected to the board but did not succeed. My advice is to go to a board meeting before buying.

    by Marianne — October 19, 2016

  9. Shumidog:

    Try to speak to people who are actually living in the condo community that you are interested in. They will give you a clear view of what it is like to live there. They should also know the pet policy.

    by Jennifer — October 20, 2016

  10. We looked at several communities both 55+ and all ages, and after we narrowed down our choice to three we asked (in writing) for the financial reports, two communities said they would not be available to us, one did send us what we asked for. Knowing what the reserve fund is before buying is very important, the money to maintain the community has to come from somewhere after the builder leaves. In our HOA run community of 45 villas we are assessed an average of $1,000 each year on top of our $250 monthly HOA fees, but it is still no more than what we would pay to keep up our previous home outside the city. Our reserve fund here is healthy and that is important as we never know when a pipe may leak, a roof needs to be repaired or replaced, or trees need taken out, as things happen.

    by Jemmie248 — October 20, 2016

  11. Next time ask Joe what course of action is prudent when an HOA tries to enforce an covenant that has been over ruled by the courts. One specific covenant is the banning of antennas, such as a satellite dish, from being installed on a roof which the FCC has addressed in the OTARD ruling. Some HOA’s embrace the ruling and work diligently with the homeowners so that installations are as inconspicuous as possible while other HOA’s try to intimidate the home owners in complying with an covenant that is not enforceable.

    by DaveJ — October 20, 2016

  12. Jemmie238 you are so very right! Having a healthy reserve fund helps to avoid sudden special assessments for repairs, etc. Ours is very healthy where I live now and we try to keep annual increases at about 3 percent for our operating budgets, and reserves as well. Once needs to note what the annual increases have been historically. We have people on fixed incomes not everyone is a millionaire and Social Security is giving a miniscule increase for 2017;.

    by Jennifer — October 21, 2016

  13. Jennifer I live to far away to visit. In fact what I am doing is trying to find out if it is worth while to make a house humting visit or just a waste of time and money.

    by Shumidog — October 21, 2016

  14. If the HOA refuses to share its financials, run, do not walk away. There must be a problem. In Minnesota at least they are required to provide audited financial statements. Probably in other states as well.

    by Linda — October 21, 2016

  15. I should have been more specific because I saw a comment by someone else which requires a response. The HOA does not need to provide you with this information until you have made an offer on the property. In Minnesota, you then have 10 days to review the association documents and financials. If you don’t like what you see, you can cancel the purchase agreement. I believe I had 3 days to review the documents in Florida. Can’t remember the number of days exactly. Your realtor should know the requirements in your state. If not, get another realtor.

    by Linda — October 21, 2016

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