Buying a House That's Part of an HOA

Buying a home that is part of an HOA, or Home Owners' Association, shouldnever be taken lightly. It's especially important that first-time homeowners understand fully what they're getting into when the buy a property that is governed by and HOA or other association.

Many states have laws governing HOAs and CICs (Common Interest Communities), but even within a state the range of things an HOA can control is across the board. For instance, I live in an HOA where the only common facility maintained by the HOA is a common drainage system. On the other end of the spectrum, though, are HOAs that maintain common or shared amenities such as a pool or common walls, or control everything from the type of roof you can install to the type of grass you can plant. Because HOAs can have such control over your property (and have the power to enforce their rules), you need to be darn sure of what you're signing up for. An HOA can add value to your property, but it can also make life miserable!

In Colorado, we have two deadlines in the purchase contract which relate to CIC (HOA)-related matters. The first is a deadline by which the seller will get all the HOA-related documents to the buyer, and the second is a deadline up until which the buyer can opt out of the contract due to something they don't like about the HOA's rules.

I'm sure that all agents differ in how they handle these deadlines, but my advice to all buyers is that they carefully read over all the documents provided by the HOA, and that they ask as many questions they can think of about the HOA and its rules prior to the second deadline. And, moreover, my advice is that they communicate directly with the HOA management themselves - not through me. I'm always happy to facilitate conversations, but it's up to my buyers to do their own homework. Every homebuyer has differing views on what they can accept/won't accept in an HOA - what if the HOA board is overbearing and always in your business? What if it's just the opposite, and no one does anything? What is your recourse? What can you do if you just don't like the manager, or if they never respond to concerns?

I've been super pleased to be representing some great first-time homebuyers who are doing everything right with the HOA that they are buying into. They have spoken with the HOA manager numerous times. They have reviewed the HOA financials, and have asked questions about past repairs and planned repairs. They have even had the HOA pre-approve their dog as a permitted animal in the complex (imagine moving in and finding out your dog isn't allowed!!).

Doing your HOA homework is lot of work, but avoid unpleasant surprises and get it done!