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