HOAs: Hassle or Advantage?

Often it isn’t until buyers have found that perfect home that they start to consider if the property is governed by a home owners' association. In Howard County, the city of Columbia is well known for its covenants, conditions and restrictions (CC&Rs), but buyers need to know that HOAs are everywhere.

Let's use Columbia as an example. Each of Columbia’s nine villages has an independent and incorporated community association. Each association elects its own board of directors, as well as a representative to the Columbia Association Board of Directors.

If you are planning to move to Columbia, or are planning to move from one village to another, you can review each association’s covenants (sometimes called bylaws) on their individual websites or with the county clerk. But first, let’s look at the pros and cons of a home owners' association—not just in Columbia, but anywhere in Maryland.

Do You Like the Idea of Less Maintenance?
Many HOAs have contracts with vendors who handle trash and recycling pick-up, lawn care, maintenance of common areas and snow removal, on behalf of the association’s residents. This is a great time savings for you—and a valuable benefit for people with physical limitations.

The drawback? These services may feel free, since you don’t have to give them a second thought, but they certainly aren’t without cost. They are covered through fees that are part of your annual or monthly dues. These dues can be increased over time, or you can be hit with a special assessment, which is a one-time charge for a specific event (such as an unexpected increase in snow removal, or roof replacement for all units in a row of townhouses).

If you see that an HOA’s fee hasn’t been increased in a several years, it isn’t necessarily a benefit. It can mean that some basic (or major!) upkeep hasn’t happened and that higher annual or monthly dues are on the horizon. Ask yourself if your budget can handle an increase in your monthly expenses.

Do You Like Your Neighborhood to Have a Cohesive Appearance?
Many members of home owners associations like knowing that their neighbors must maintain their lawns, are responsible for the exterior upkeep of their home, and can’t install a hot tub in their front yard (for example). Yet, other people won’t wanted to be limited in the color of their home or the style of their outdoor light fixtures, or be unable to place a permanent flagpole.

In some neighborhoods in Maryland, say bye-bye to inflatable Santas and Ravens-themed column wrapping (see above). Some HOAs require approval for (or will restrict) solar panels, swing sets, basketball hoops, new plantings, fences and some pets. These are just a few examples, and will vary among communities. Some people believe that these architectural covenants can preserve home values, while others believe they stifle individuality.

Will You Take Advantage of Recreation and Entertainment?
Amenities will vary from community to community, but for the villages of the Columbia Association the options are seemingly endless: three athletic clubs, a skate park, an ice rink, a roller rink, four indoor pools and 23 outdoor pools, two golf clubs, tennis courts, the Columbia Horse Center, a youth and teen center, the Columbia Art Center, a dog park, multiple tot lots and miles of trails.

We know that’s not everything Columbia has to offer, but it gives you an idea of what is possible in any community with an HOA. When considering a home, talk to the neighbors to find out how active the community is. Do residents take advantage of the amenities, or does a community’s pool, club house or tennis court sit unused, for example? Are these worthwhile expenses to be maintained through your dues?

Are You Comfortable with Third-Party Management of the HOA?
HOAs are led by a board of directors but can be managed by a third-party company that is paid for their administration services. That means that if you have a complaint against a neighbor, then it will be addressed and enforced by the property management company. This saves you the frustration (or the uncomfortable conversation) about your neighbor’s tacky lawn ornament, off-leash dog or broken down RV on the front lawn.

The flipside? When you’re on the other end of the violation. Is the complaint justified? Is it an inconvenience? If you don’t comply, you can be subject to fines or even be sued by the HOA. Covenants can be changed, and you can petition for an exemption (called a variance) but don’t count on it. If there is something in the covenants that you can’t live with, think twice about moving ahead with the purchase.

Important Steps After You Make an Offer
Once you’ve entered into a contract to purchase a property, the Maryland Homeowners' Association Act requires that the seller provide you with certain information concerning the community in which the property you are purchasing is located. They are required to disclose this information within 20 days of accepting your offer in writing.

The information required is described in Md. REAL PROPERTY Code Ann. § 11B-106, and it includes details such as the existence of any lawsuits against the homeowners' association; and any pending claims, covenant violations, or notices of default against the lot. In short, you want to know if there are any current legal troubles for the HOA; and you have the right to know if the property you plan to buy presently in violation of any HOA covenants. These problems would become your problems at the point of purchase.

How Involved Do You Want to Be?
Anyone purchasing a home in an existing housing development with an HOA must become a member of that HOA. There is no choice. For some people, the HOA is something they think of as they pay their monthly or annual dues, and for others it is a chance for frequent interaction with people in the community and to take part in the community's growth or redevelopment (like the new Hobbit's Glen clubhouse above). Either way, the HOA can affect the value of what is likely your biggest investment.

We encourage you to contact The McKenna Group with any questions about HOAs in the communities you are exploring, whether they are in Howard County or anywhere in Central Maryland. Call us at (410) 381-3666.