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Who Should Inform Me About HOA Covenants and Fees for My New Home?

By
Real Estate Agent with Front Gate Real Estate Broker 11085

Who Should Inform Me About HOA Covenants and Fees for My New Home?

Question Mark with House

 

This is a question I hear regularly from homeowners. Actually, what I usually hear is "no-one told me about the covenants when I bought my house and how strict, (or lax, intrusive, or costly) they are". 

While recently watching HGTV's Property Brothers, the buyer refused to look at a home that was located within an HOA.  He made several unflattering references to "nosy neighbors" and people "telling him what he could and couldn't do with his property". The house met every criteria for his family, but he KNEW he would not be happy adhering to covenants attached to any Homeowners Association. 

Good for him! He made an informed decision regarding his lifestyle choices. Many do not consider whether an HOA is a good fit for them prior to purchasing their dream home.

Owning a home that is part of a Homeowners Association isn't for everyone. You may be a non-conformist and abiding by a standard set of covenants may not be your thing. If that's the case, let your Realtor know upfront that you aren't interested in purchasing a home in a covenant neighborhood.

Back to the original question: who should inform you about HOA rules and fees? Ideally, you will be represented by a Realtor when purchasing your home, and she will tell you about the existence of the Homeowners Association as well as the fees, amenities, and the covenants.  Even if you are purchasing a newly constructed home, hopefully your Realtor or the builder should provide information regarding the covenants, bylaws, and association fees.

Know the covenants before signing the offer to purchase! Don't wait until you're sitting at the closing table to ask about the covenants. By that time you are vested in your decision, the loan documents have been prepared, the moving van is loaded, and you may feel it's too late to back out if you disagree with the language or content of the rules.

Most HOAs have websites, but not all neighborhoods publish the CCRs (Covenants, Conditions, and Restrictions) online. The most important advice I can give is to do your due diligence. Ask questions early and often in the home buying process so you will be as happy with your home choice as you are with the neighborhood you decide to call HOME. 

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Comments(69)

Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

Virtual Realty Consultants - It's really smart that the contingency addendum is incorporated into your contracts. It covers all the bases!

Joe Petrowsky - Thanks! I hope my next house is private with no neighbors in sight!

Lise Howe - It's very interesting how the process differs from state to state, or region to region. MS could learn a lot by your state's example!

Sham Reddy - Thank you!

Nov 03, 2015 02:03 AM
Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

Kat Palmiotti - I remember the days pre-internet when hard copies were kept in the office files for every "popular" HOA. Those were the days!

Chris Lima - Very true! Excitement over a new home can often overshadow the mundane but practical necessity of reviewing the covenants! Gary L. Waters, Broker Owner, Waters Realty of Brevard, LLC - I'm sure in many instances, the buyers were made aware of the covenants, but conveniently "forget" until they are reminded after the sale. Debbie Reynolds - Absolutely! It's better to know up front what you are agreeing to, rather than find out unexpectedly later on. 

Nov 03, 2015 02:13 AM
Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

Bruce Kunz - Thank you for your kind words. Buyers should always proceed with caution as there could be one "deal breaker" included in the language that they (the buyer) would not be willing to adhere to. Due diligence!

Michael Setunsky - Exactly! Thanks for sharing that piece of knowledge.

 Richie Alan Naggar - Thanks, Richie!

 John Wiley - CCRs are not an easy read, but very necessary. Thank you for stopping by and commenting.

 Nicole Doty - Gilbert Real Estate Expert - It's hard to avoid them here as well. Thank you!

Nov 03, 2015 02:19 AM
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

HGTV did home buyers a favor by airing of this segment and the buyer NOT wanting anything to do with an HOA. 

Nov 03, 2015 02:35 AM
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

P.S.  I don't think that you have to be a "non-conformist" not to want to buy into an HOA.  That seems to imply that the buyer would want to paint their home chartreuse.   There are many HOA's which are self-managed/self-run who have no term limits and the bored members run amok.  They can, and do, target home owners they don't like or don't want in their HOA.  The majority of states, including the State of Oregon, do not have ANY regulations or overseeing agencies once the HOA has been approved.  They can morph into little oligargies and can create their own hell for owners they want to target and harrass.  Someone flies the U.S. flag . . . and that's "non-conformist" behaviour?!?

Nov 03, 2015 03:00 AM
Pat Starnes-Front Gate Realty

Carla Muss-Jacobs, Principal Broker/Owner - My interpretation of a non-conformist is someone who disregards or does not abide by the rules. If the covenants state you cannot fly a flag, that is something I would have preferred to know in advance of purchasing the property. Generally speaking, the issues here pertain to the parking of boats and trailers, off-street parking, nonconforming mailboxes, yards not maintained, etc. 

Nov 03, 2015 04:46 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Fortunately, North and South Carolina both require HOA disclosures as part of their property disclosures when selling a home, so buyers are forewarned. When I list I always ask my clients for a copy of their HOA docs to provide to prospective buyers and when I represent buyers I always ask the seller's agent to provide me with the HOA documents when we are negotiating.

Nov 03, 2015 03:02 AM
Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

Karen Feltman - HOA disclosure addendums are not a part of our standard contract here in MS, and not all CCRs are available online. Many times there is no real discussion of covenants until at the closing table, or even after the sale is finalized.

 Evelyn Santiago, Managing Broker Heart Realty Group, Inc. - Just for curiosity, how many households are in your HOA? When we serve on our local HOA Board, we understand how important it is for buyers to be informed! PM companies are not very well respected in this area; not sure about most. That would be an interesting read. :)

 Rekha Vyas - Thank you for stopping by and commenting about your experience with HOAs. Our disclosure laws are different in MS.

 Lance Owens (RS) - Yikes! 14 pages? Ours are currently at six pages.

 Teri Pacitto - As several have mentioned, our laws vary widely from yours. Even our closings are handled differently from California. But it interesting to see how Realtors in different parts of the country handle this issue. Thank you for commenting.

Nov 03, 2015 03:24 AM
Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

Kathleen Luiten - Normally there is no fee here to gain access to the HOA docs, unless a property manager is involved. I can certainly understand how it is not practical to get the docs prior to writing an offer if there are hundreds of dollars in fees! Like you, I tend to mention the basic covenants to my buyer prospects, esp if I know my buyer has a boat or ATV, for example. Storage can be an issue with some HOAs. Thank you for your helpful comments.

Nina Hollander - asking for the docs ahead of time is a good practice. Thank you.

Nov 03, 2015 04:55 AM
Alan Kirkpatrick
Austin Texas Homes - Round Rock, TX
Alan in Austin

Pat Starnes 

A really great post. Very informative. HOAs are not all bad many people really enjoy living in them but everyone needs to inform themselves about the HOAs before making a decision on a home. 

Nov 03, 2015 07:53 AM
DEANNA C. SMITH CERTIFIED MOBILE NOTARY
Certified Mobile Notary Signing Agent - Smith Mountain Lake, VA
Highest Ranked Certified Mobile Notary in Virginia

Seller's agent should always disclose HOA and CCR in the listing and Buyer's agent should insist their clients read every word of it.   My husband and I have had to demand compliance from some neighbors to maintain our community values and appearance Pat Starnes

Nov 03, 2015 08:02 AM
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

I pass along the info the sellers provide and provide the phone/contact info for the HOA no matter what side I'm on in the transaction.

Nov 03, 2015 10:47 AM
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate Services

Pat, So true. Living with rules of an association is not for everyone. I see it as more of a lifestyle thing. There are pros and cons to living with association rules.

Nov 03, 2015 11:00 AM
Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

Alan Kirkpatrick - HOAs would be more enjoyable if everyone would become familiar with the rules prior to purchase. I agree - they aren't all bad!

Deanna Early - A lax HOA does not help matters. I hope your HOA steps up!

Tammy Lankford - same here. If only everyone would do the same!

 

Nov 03, 2015 11:05 AM
Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400
The Top Team @ Charles Rutenberg Realty 255 Executive Dr, Plainview NY 11803 - Plainview, NY
Long Island Condo and Home Specialists

It's certainly not for everyone. The Realtor should of course make the buyer aware, but before closing the attorney will receive the By-Laws and should go over this fully with the buyer.

Nov 03, 2015 07:26 PM
Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

Lawrence "Larry" & Sheila Agranoff. Call 631-805-4400 (c) - the closing attorney does not review HOA rules and regs with the buyer in my state, as a general rule. It's up to the Realtor and the buyer. Worst case scenario, it's done after the fact through the HOA. 

Nov 03, 2015 10:15 PM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Dependent on the property, as a lender I will ask for these documents for financing purposes, Pat Starnes.   I'm always somewhat surprised at the number of clients that have not asked for these docs/info ... or the agents haven't provided it.  You raise a very good point here ...

Gene

Nov 04, 2015 12:31 AM
Praful Thakkar
LAER Realty Partners - Burlington, MA
Metro Boston Homes For Sale

Pat Starnes - you have a good point!

Buyers must know about HOA, CCR etc - and that's one more reason why they should have a GOOD representation. 

Nov 04, 2015 01:10 PM
Mihir Gandhi
First Team Real Estate - Placentia, CA
Real Estate in Placentia - North O.C. CA

Some buyers are not willing to buy a home where they would pay HOA dues every month as they think it's a drain and additional burden on them.  

Other buyers appreciate the good things that generally come along with it.  If HOA is there, I think it's always a good idea to order the HOA docs thru escrow and have buyer review them prior to removing contingencies ... 

Nov 04, 2015 11:27 PM
Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

Gene Mundt, Chicago-area Mortgage Lender - www.genemundt.com - In Mississippi, we don't close through escrow, so the process is different here. Fortunately, I provide this information to my buyers so they can make an informed decision. 

Praful Thakkar - Exactly my point. Thank you!

 Mihir Gandhi - Very true. Most HOAs charge annually, but the more exclusive ones could charge monthly, and the expense would definitely weigh heavily on the purchasing decision.

Nov 05, 2015 12:03 AM
Will Nesbitt
Nesbitt Realty at Condo Alexandria - Alexandria, VA
Nesbitt Realty is a family-run brokerage.

In Brandon, MS for Real Estate? Call Broker Pat Starnes at (601) 278-4513, today.

Nov 05, 2015 05:11 AM