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Life with a homeowners
association
Leah Gliniewicz
Homeowners associations help buffer you from unexpected
expenses. But they can also slap you with special assessments when
things go wrong -- even if they don't go wrong in your front yard.
If a development has an association, home buyers automatically
become members. They must follow rules and pay assessments for common
area maintenance and, sometimes, utilities. A board of directors,
elected by the homeowners, enforces the group's rules and sets its
agenda.
A financially healthy HOA can absorb emergency costs.
But if it is fiscally fragile chances are good that the organization
will need to level special assessments to take care of unexpected
problems. So look before you leap into buying that home.
"Get the financial records of the homeowners' association,"
says Richard Price, a partner with the law firm of Nixon Peabody
in Washington, D.C. Many states require that the documents be provided.
Talk to residents -- especially recent buyers -- about
their experiences with the association, and speak to board members
about any issues that are being discussed, says Richard Roll, president
of the American Homeowners Association in Stamford, Conn. You don't
want to buy into a community with problems you don't know about.
Find out if the board is planning any future projects
and if it's on a tight budget, suggests Brian Feinbaum, author of
the Florida Homeowner, Condo and Co-op Association Handbook:
the Rights, Responsibilities and Resources of Board Members, Managers
and Residents. He says if the homeowner's association
hasn't done costly projects before, it will probably be doing them
soon.
Let the battle begin
Even if you ask all the right questions, things can
still go wrong -- especially when emotions get involved.
When the board of directors tries to take control
of a situation and does everything it can to hold onto power, problems
occur, says Michael Van Dyk, chairman of Secure Homeowners' Rights
Now in North Miami Beach, Fla.
"The biggest issue between homeowners and the board
of directors are always these trivial things," Van Dyk says. Disputes
erupt over anything from rules that cats must be walked on leashes
to a child's tree house that doesn't fit specified height requirements.
"Some larger issues get pushed aside because smaller
issues come up," he says. "All these trivialities turn into civil
wars over time." And these wars can be costly if they're fought
in court.
Emotions stay on a more even keel when there is a
management company operating the development and buffering the board
members from residents, Price says.
Know your association's bylaws
Residents who know the rules are less likely to get
involved in arguments. Begin by reading the association's most recent
bylaws.
"It all starts with the documents," Price says. They're
long and can be complicated, but they affect the quality of life
for members.
"I think one of the real travesties is when you're
closing on a property and you get a stack of documents that can
choke a horse," he says. "At some point you get so many documents
you don't know what you're looking at anymore."
Benefits of being in an HOA
Despite the occasionally combative relationship between
homeowners and their associations, 75 percent of community association
homeowners are "very" or "extremely" satisfied with their community,
according to the 1999 National Survey of Community Association Homeowner
Satisfaction by the Community Associations Institute Research Foundation
in Alexandria, Va.
Homeowners save time by not having to negotiate service
contracts, and they get greater buying power, Roll says. And, if
there are neighborhood or regional issues, their opinion carries
more weight than that of a group of independent homeowners.
Associations also mean voting power for the owners.
"Folks need to keep in mind [that] the board is the
association," Price says. "The association is the residents. You've
got a vote, and most people don't realize that with a homeowners
association."
-- Posted: Feb. 2, 2000
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