If you are considering buying a home in a planned subdivision, there is a good chance that you will become part of a homeowners’ association, commonly referred to as an HOA. One of the jobs of an HOA is to protect the property values within the community. One way an HOA does this is by requiring member homeowners to pay monthly, semi-annual, or yearly fees. These funds are used to maintain the common areas of the community. Another way is through a set of rules known as restrictive covenants that govern what homeowners in the community can and cannot do with their property.
Examples of Restrictive Covenants:
Restrictive covenants can vary widely between communities. These covenants can cover numerous issues, including
the colors that you can use to paint your home,
the type of landscaping that you can plant,
the size or breed of dog that you can own,
the type of window coverings allowed,
the number and type of vehicles that you can park on your property,
the height and type of fencing that you can install, and
whether you can install basketball hoops or other sporting equipment in your driveway.
A neighbourhood with an HOA that implements and enforces reasonable restrictive covenants will typically appear better maintained and see home values increase faster than a neighbourhood without an HOA.
Your Rights When Purchasing a Property in an HOA Community:
Once a seller accepts your offer, you are entitled to review the community’s covenants and by-laws. You should take advantage of this opportunity since you are expected to abide by the rules whether you have read them or not. If you find the terms unacceptable, you are normally entitled to back out of the contract without penalty within a certain number of days. Another option is to bring the issue to the attention of the HOA board to see if an exception can be made.
What Happens if You Violate an HOA Rule?
The consequences for violating a restrictive covenant vary from community to community. In most cases, you will be issued a warning advising you to remedy the situation. If you fail to do so, you may receive a fine.
The Benefits of an HOA:
While some homeowners are reluctant to be told what they can and cannot do with their property, an HOA does offer some significant benefits, including access to more recreational amenities and a better community aesthetic. You will also typically have fewer maintenance concerns in an HOA community since mowing, snow removal, and even trash service are often included in your dues.
Restrictive Covenants Can be Changed:
In most cases, restrictive covenants enacted by an HOA are reasonable and ensure that all residents of the community are able to enjoy their home and neighbourhood amenities to the fullest extent possible. Unfortunately, there are instances where HOA boards over-reach and tighten regulations to the point that they infringe on the rights of individual homeowners. In these instances, it is important to remember that restrictive covenants can be changed by a majority vote of the member homeowners.
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