DJ1 (Ontario)
Posts: 798
Posts: 798
Posted:
http://www.househuntnews.com/marketing/consumer/sept05/04.htm
"7 Homeowners' Association Secrets You Should Know
Think you won’t have to deal with your homeowners’ association (HOA) as long as you don’t paint your house purple and stick a yellow slide on the roof? Think again. There are many things you may not know about HOAs that may come back to bite you.
Most developments now have a homeowners’ association (HOA) governing how the community looks and acts. If you aren’t very familiar with these organizations, there are many things you should know as a responsible homeowner. A recent Yahoo Finance article explores some little-known HOA facts.
1. HOAs Have More Power Than You Think. “So I missed a few payments, what’s the big deal?” “I can build that garage, what’s the worst that can happen?” You may think that breaking your HOA’s rules “just a little” is no big deal, but the truth is, it may be a very big deal. HOAs vary, of course, and some are going to be a lot harsher than others. Some HOAs will slap you with a fine if you are one day late on your monthly dues. If you fall 90 days behind on your dues, the HOA may place a lien on your home and threaten to foreclose if you don’t settle the bill. Your best bet, when you find your HOA taking drastic action, is to pay what they say you owe and then argue your case.
2. Lawsuits Are Seldom a Last Resort. HOAs may tell you that a lawsuit is the last thing they want to do. In reality, this is not the case at all. In California, experts estimate that 75 percent of HOAs are involved in a legal dispute of some kind. Association lawyers often scare board members into thinking that one exception will make the community fall into immediate decline. Also, lawsuits are often tempting to board members as an effective scare tactic.
3. Reserves Aren’t Always Reserved. Every HOA has a reserve fund to be used when something goes wrong or the property needs extensive repairs. However, many HOAs’ reserve funds fall into disrepair themselves. Approximately 20 percent to 25 percent of your HOA dues should go toward the reserve fund. There should also be a long-term schedule for the reserve fund in the annual budget, including an estimate of upcoming expenses for the community: swimming pool maintenance, lighting repairs, landscaping, etc. Reserve accountants recommend that the reserve fund should contain at least 70 percent of the projected reserve budget. If the fund is lacking, expect to be hit with big assessments when something in the community goes awry.
4. Rules Change All the Time. HOAs often sidestep the law and common courtesy by changing the rules whenever they wish. According to attorney Benny Kass, who represents associations, “Bottom line, the board has to have the right to run the show.” This means that homeowners need to stay up-to-date on any changes and raise a fuss when something isn’t done to their liking.
5. Many HOAs Don’t Want Homeowners Involved. Yes, HOAs are there to represent the homeowners in a community. But that doesn’t mean that board members would rather avoid or ignore homeowners in order to get the job done quickly and painlessly. Watch out for last-minute changes to meeting times or locations or no reaction when you raise your hand at a meeting. If you feel ignored, try putting your complaint in writing. If that doesn’t achieve the desired result, organize other homeowners and call a special meeting to discuss the issue or remove board members, if necessary. A last resort is, you guessed it, a lawsuit.
6. Board Members May Be Volunteers, But Not Always. In most cases, board members are volunteers. In some cases, however, board members get perks from their position. Perhaps board members are allowed to “bend” the rules but no one else is. Or a board member’s best friend can install a satellite dish, but her next door neighbor can’t. Or worse, board members receive kick-backs from using certain contractors. The best you can do in this situation is to keep a close eye on the board. Watch out for big expenditures and stay informed.
7. Petty, Petty, Petty. Finally, some HOAs are nothing if not petty. Many homeowners have stories of an HOA that won’t allow Christmas lights. Or one that wouldn’t allow a tall fence to be built between feuding neighbors. If your HOA sounds like these, watch out. Think carefully about what matters more: your sanity and financial security or some holiday decorations. If you hold your ground, you may end up with a fine, a lien or a lawsuit on your hands. Before buying in an area, try to get a good idea about the personality of the HOA by talking to some of the board members, as well as some of the homeowners who are not on the board. "
"7 Homeowners' Association Secrets You Should Know
Think you won’t have to deal with your homeowners’ association (HOA) as long as you don’t paint your house purple and stick a yellow slide on the roof? Think again. There are many things you may not know about HOAs that may come back to bite you.
Most developments now have a homeowners’ association (HOA) governing how the community looks and acts. If you aren’t very familiar with these organizations, there are many things you should know as a responsible homeowner. A recent Yahoo Finance article explores some little-known HOA facts.
1. HOAs Have More Power Than You Think. “So I missed a few payments, what’s the big deal?” “I can build that garage, what’s the worst that can happen?” You may think that breaking your HOA’s rules “just a little” is no big deal, but the truth is, it may be a very big deal. HOAs vary, of course, and some are going to be a lot harsher than others. Some HOAs will slap you with a fine if you are one day late on your monthly dues. If you fall 90 days behind on your dues, the HOA may place a lien on your home and threaten to foreclose if you don’t settle the bill. Your best bet, when you find your HOA taking drastic action, is to pay what they say you owe and then argue your case.
2. Lawsuits Are Seldom a Last Resort. HOAs may tell you that a lawsuit is the last thing they want to do. In reality, this is not the case at all. In California, experts estimate that 75 percent of HOAs are involved in a legal dispute of some kind. Association lawyers often scare board members into thinking that one exception will make the community fall into immediate decline. Also, lawsuits are often tempting to board members as an effective scare tactic.
3. Reserves Aren’t Always Reserved. Every HOA has a reserve fund to be used when something goes wrong or the property needs extensive repairs. However, many HOAs’ reserve funds fall into disrepair themselves. Approximately 20 percent to 25 percent of your HOA dues should go toward the reserve fund. There should also be a long-term schedule for the reserve fund in the annual budget, including an estimate of upcoming expenses for the community: swimming pool maintenance, lighting repairs, landscaping, etc. Reserve accountants recommend that the reserve fund should contain at least 70 percent of the projected reserve budget. If the fund is lacking, expect to be hit with big assessments when something in the community goes awry.
4. Rules Change All the Time. HOAs often sidestep the law and common courtesy by changing the rules whenever they wish. According to attorney Benny Kass, who represents associations, “Bottom line, the board has to have the right to run the show.” This means that homeowners need to stay up-to-date on any changes and raise a fuss when something isn’t done to their liking.
5. Many HOAs Don’t Want Homeowners Involved. Yes, HOAs are there to represent the homeowners in a community. But that doesn’t mean that board members would rather avoid or ignore homeowners in order to get the job done quickly and painlessly. Watch out for last-minute changes to meeting times or locations or no reaction when you raise your hand at a meeting. If you feel ignored, try putting your complaint in writing. If that doesn’t achieve the desired result, organize other homeowners and call a special meeting to discuss the issue or remove board members, if necessary. A last resort is, you guessed it, a lawsuit.
6. Board Members May Be Volunteers, But Not Always. In most cases, board members are volunteers. In some cases, however, board members get perks from their position. Perhaps board members are allowed to “bend” the rules but no one else is. Or a board member’s best friend can install a satellite dish, but her next door neighbor can’t. Or worse, board members receive kick-backs from using certain contractors. The best you can do in this situation is to keep a close eye on the board. Watch out for big expenditures and stay informed.
7. Petty, Petty, Petty. Finally, some HOAs are nothing if not petty. Many homeowners have stories of an HOA that won’t allow Christmas lights. Or one that wouldn’t allow a tall fence to be built between feuding neighbors. If your HOA sounds like these, watch out. Think carefully about what matters more: your sanity and financial security or some holiday decorations. If you hold your ground, you may end up with a fine, a lien or a lawsuit on your hands. Before buying in an area, try to get a good idea about the personality of the HOA by talking to some of the board members, as well as some of the homeowners who are not on the board. "