Homeowners associations (HOAs) are a common form of government intrusion into everyday life. They’re also a great way to make money if you own property in an area where people want to get together and enjoy themselves.
If you’re thinking about forming an HOA, there’s probably plenty you can learn from experienced members. But if you’re just getting started, it’s worth learning how to approach your community in the right way from the beginning.
Here are some things to keep in mind so that your HOA experience doesn’t turn into one big headache.
An HOA (Homeowner Association) is a group of homeowners that own real estate in an area. The common types of homeowner associations are big box stores, city- or neighborhood-based real estate groups, and homeowner-led clubs.
Each type has its own set of rules and regulations that address a variety of issues such as flooding, maintenance, the performance of common areas like the clubhouse and grounds, distance between homes, and more.
If you belong to an HOA, you have to follow the rules set forth by the association. If you don’t, you could be banned from the property. There are different types of bans you may face, including being unable to sell your home, receiving less tax revenue, and even losing access to your community pool or beach.
Know the Law and Institute Bad Behaviour
Unfortunately, many people are unaware of the rules and regulations that govern a homeowner association, and many also have a hard time understanding how the law affects their associations.
The main law that affects a homeowner association is the Americans with Disabilities Act (ADA). The ADA makes it illegal to discriminate against people with disabilities in the operation of common areas like resorts and pools, as well as in the design and maintenance of homes.
There are many examples of homeowner associations that have violated the ADA, often through the actions of their managers. For example, a city-based real estate group in Florida was sued for discrimination after a manager banned two people with disabilities from the pool.
Find a Good HOA Plan
The first step in any negotiation is to find out what the other side wants. To get a grasp of what sort of things are important to your association, you can try hosting a meeting and asking attendees to sign a petition. If you’re at a loss for words, you can always bring in a contractor to help you draw up a proper HOA plan.
Set Up an HVAC System
A proper HOA system includes much more than just an HVAC system. It should also include an electrical system, plumbing system, marketing strategy, and much more. You can choose between models with single and double doors, alarm systems, and more. Sometimes, you have to make sure your HOA is in the right before you can start negotiating.
Make Your Home Affordable
One of the best things you can do to make the experience at your HOA less stressful is to make your house as affordable as possible.
If you’re able to rent or finance your project, great. If not, you’ll need to make some cuts. One of the most obvious things to cut from your budget would be your HOA fees. You may also need to cut expenses such as yard Maintenance, ice and water bills, or phone bills. If you have kids, you may be able to cut back on extracurricular activities to reduce costs.
Be Realistic About Costs
The price of materials for an HOA perk or expansion may seem like a good idea at first. However, when you factor in the costs of labor, insurance, and the impact of materials on the environment, it might be cheaper to just hire someone to do it.
Sometimes, even a small bit of extra effort can go a long way towards reducing expenses. Still, it’s worth it to keep in mind that your homeowner association (HOA) isn’t a profit center. Make every effort to keep your expenses as low as possible, and you’ll see a big decrease in headaches and wasted time.
Cite Good Reason for Restrictions
One of the most important decisions you can make when it comes to your HOA is to cite a good reason for the restrictions you’re imposing. Most associations require some form of authorization for many of your rules, like a petition signed by all members.
When you cite a good reason for a rule, you’re admitting that you have a good reason, not just an arbitrary one. Make sure you’re actually following the law and showing good reason for your decisions.
Do Your Research Before You Dictate Rules
Another thing to keep in mind is to do your research before you dictate rules to your community. In many cases, you’ll find that the representative of the homeowner association is the best source of information.
However, it’s important to understand the culture and climate within your community. If your area is known for being a party town, you might want to avoid setting up an HVAC system during the month of July, when summer is the norm.
Other things to research include the rules surrounding parking, noise, and water usage. You want to make sure you’re following all applicable laws, and you want to make sure you’re being accurate as well.
Finally, don’t forget to follow up and make sure you’re aware of any problems you’re causing. Take note of the specifics such as who’s responsible for maintenance, who’s responsible for fines, and what those fines are for. Make sure you follow through and take care of any issues that are brought to your attention.
Lock It Down
Finally, once you’ve got your HOA in place, you need to make sure to lock it down. There are many ways to go about this. You can sign a contract that legally binds you to the rules of the land, or you can use a Trust Deed.
Trust deeds are actually legal documents created by trusts to be filed with the courts. You can use a Trust Deed to legally recognize your HOA for binding you to its rules, or you can use the Trust Deed to voluntarily give up the right to sue in court.
Homeowners associations are nothing new, and they’ve been around for a long time. However, they’ve also become more common due to the rise of homeownership and thieving among younger people. If you’re just getting started with your HOA, there are plenty of mistakes you can avoid. Follow these tips, and you’ll be well on your way to a successful and trouble-free association experience.