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Path To Homeownership: Homeowner Associations

By
Real Estate Agent with Keller Williams Realty BRE# 01510971

WHAT IS A COMMON INTEREST DEVELOPMENT (CID)?

 Common Interest Development (CID) allows homeowners the use of common property and facilities and Path to Homeownershipprovide for a system of self-governance through an association of the homeowners within the CID. CIDS come in a variety of types and styles, such as single family detached houses, two story townhouses, garden style units with shared "walls". When a homebuyer purchases a home, townhouse, condo or PUD in a common interest development, they become a member of that association.

During the home buying process, the homeowner obtains a copy of the Declaration of the Covenants, Conditions, and Restrictions (CC&Rs), which are the ground rules for the operation of the association. Every CC&R obtains the rules and responsibilities of the association and homeowners, it explains the obligation of the association to collect assessments, as well as the obligation of the owners to pay the assessments on time. It is imperative for homeowners to read and review the CC&Rs thoroughly before purchasing the property. If these rules are violated, the association has the right to sue the homeowners for those violations. Associations are ran by a board of directors that preserve, enhance, and protect the value of the CID. The Board of Directors of the Association are elected by and answer to the homeowners. Typically, the board will contract a professional management company to run the day-to-day affairs of the association. 

What are your rights as a homeowner living in a CID? The homeowner has the right to:  

  • Attend the board meetings . I recommend to attend meetings regularly, obtain copies of minutes from all board meetings, and actively contribute to the discussions and decisions that are being made. After all, you will be required to follow them. 
  • Communicate with the association board of directors any issues or problems that may arise. 
  • Understand that the Association must always be able to demonstrate adequate insurance coverage, a solvent budget, and a sufficient reserve account. 
  • Serve on the Association's Board of Directors through request or a nomination. 
Living in a Common Interest Development (CID) has its advantages:
  • The management company acts as an agent for the association, direction is taken from the board of directors. 
  • The property management company is generally responsible for the maintenance, collecting assessments, paying the association's bills, following direction from the board to enforce the rules and regulations, and more. 
  • Typically, an association will formulate committees that perform valuable functions (Architectural committee, welcoming committee, etc...), this allows the homeowner to be proactive in helping maintain the appeal of the property. 
Living is a Common Interest Development (CID) has its disadvantages too: 
  • The common area has to be uniform and the association may have to be notified before any changes can be made. 
  • The board can increase the amount of the assessment, annually. 

Thinking of renting your CID: 
  • Some CIDs restrict the number of units that may be rented by owners. 
  • Typically, a copy of the rental agreement has to be provided to the association. In most associations the CC&Rs state that the homeowner is responsible for the conduct of the tenant and the homeowner could possibly be fined for any misconduct. 
As a resource: CIDs are subject to the Davis-Stirling Common Interest Development Act (California Civil Code), not an easy read but valuable information. 

 

Ed Wagenseller
REMAX Essential - Wrightsville Beach, NC
Real Estate & Homes - Wrightsville Beach

Great Post!  We have got to educate our clients as much as we are educating themselves.... An educated client puts out a good product before we are even introduced:)

Feb 28, 2010 09:10 PM
DAdrea Davie
Keller Williams Realty - Stockton, CA
Stanislaus & San Joaquin Short Sale Agent

Thank you, Ed. I agree. The more information available to homebuyers before house hunting the better their experience is, the better our experience and communication is. 

Mar 01, 2010 03:00 AM