Shopping for a new home is a fun and exciting time! It can also be overwhelming. There are many things you need to learn and know about before purchasing a home, so research is a must. One of the things that people don’t always remember to ask about or research is Homeowners’ Associations (HOAs) and their rules and regulations. The Dallas-Fort Worth (DFW) area has an abundance of communities that an HOA runs. It’s important to understand how HOAs work, their bylaws, and covenants. If you are considering buying a home with an HOA, it would be best to research the requirements so you are not caught off guard on what you can and cannot do with your property.
What Is An HOA?
An HOA is a membership offered (and in most cases required) for homeowners of many gated communities, developments, apartments, and condos. The purpose of HOAs is for the upkeep of the property and rules of uniformity. The HOA’s goal is to maintain the property value of the homes in the community. They may also manage the community’s common areas and improve the residents’ quality of life.
In most cases, when you buy a home with a community that has an HOA, you automatically become a member. Each resident under an HOA must pay yearly dues or fees. Those fees cover the maintenance and upkeep of the private property (homes and yards) and the common property areas (clubhouses and pools). The services may include services such as landscaping, lawn mowing, snow and ice removal, garbage collection, and street-cleaning. Some HOAs may even provide security, law enforcement, and home and property insurance. If your community has a common swimming pool and clubhouse, dues also cover maintaining those costs.
What Is An HOA Covenant?
An HOA covenant can sound a little scary if you’ve never heard the term. You may also hear them called a Declaration of Covenants, Conditions, and Restrictions (CC&R). They are also sometimes called “restrictive covenants” because of the restrictions associated with them. The covenants are essentially the rules of the community. They outline the HOA’s obligations and rights to its members and the member’s obligations and rights to the HOA. They are legally binding and often enforced by fines, CC&R’s.
Are There Any Benefits Of A Home Owner’s Association Covenant?
Restrictive covenants can have both benefits and drawbacks for homeowners, so it’s important to understand the reasoning behind them. HOAs ensure uniformity and protect and improve your property’s value. There is often a focus on curb appeal because when curb appeal drops, so do property values. These restrictive covenants may stop your neighbor from allowing their house to deteriorate and decay, lowering your home’s property value. Keeping the neighborhood in top shape may help you to sell your home later.
Things To Consider Before Buying A Home With An HOA Covenant
When you buy a home with an HOA covenant, you agree to their rules, whether you like them or not. Keep these things in mind when considering purchasing a home with an HOA covenant:
- You have limited control over your own property. You may not like people telling you what you can and cannot do on your own property. However, if you move into a community with an HOA and don’t abide by their rules, you will face penalties.
- A CC&R is a binding legal document. If you think you will take the risk and do what you want, understand that it would make you violate a legally binding document. The HOA may have multiple avenues to correct violations. You may be surprised at how easy it is for an HOA to see when you have violated a rule.
- You pay for the rule enforcement. HOAs are funded by their monthly fees from everyone in the community. The HOA fees can run anywhere from $100 to several thousand dollars per month, depending on where you live.
Examples Of Common Restrictive Covenants
The types of covenants can vary, but these are just a few of the most common ones you may see when shopping for a new home that is under an HOA:
Rent and lease restrictions
You will have to check your CC&R if you ever want to rent your home out. If you were considering investing in this property to use as a rental property, you might not be allowed to do so. This includes using the property as an Airbnb rental.
Restrictions on business usage
Your CC&R may prohibit you from operating a business out of your home. If you are self-employed, this may be a problem for you. Most HOAs won’t mind if you turn a spare bedroom into a home office. A business that increases traffic in the neighborhood or even having a large work vehicle parked in your driveway may be a red flag to the HOA.
Limits on pets
Some HOAs limit the types of pets you can have on the property. They may restrict the size, the pet, or even the breed of dog you are allowed to own. HOAs may frown upon certain breeds of dogs that have a reputation for being more aggressive. You may also have restrictions on breeding your pet and selling them from your home. And you can most likely forget owning livestock or even small farm animals.
Limits on exterior maintenance and construction
Remember that HOAs like uniformity? They can be downright picky on the paint color, and you may have to stick with neutral shades from their list of approved choices. There may also be rules about how often you mow the lawn, when you can put trash out, and even your holiday lights and decorations. You may not be permitted to modify the home’s exterior, build a shed, build a fence, or build a detached garage without first getting the design approved by the HOA.
The bottom line is that you should seriously read and ensure you understand the HOAs CC&R during the timeframe in your purchase contract. Carefully decide if any rules may be a factor during the years you will live on the property.
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