“Why is an experienced, reliable management company important?”
If you’re looking to buy a home in Los Angeles, you’ll likely stumble on the option of purchasing with a homeowners association. On the westside, there’s no shortage of HOAs—Serra Retreat Homeowners Association in Malibu, Marquez Knolls Homeowners Association in Pacific Palisades, and Ocean Park Homeowners Association in Santa Monica, to name a few. Regardless of where your sights are set, you might be wondering if an HOA is right for you.
WHAT EXACTLY IS AN HOA, AND HOW DOES IT OPERATE IN CALIFORNIA?
A homeowners association, or HOA, is an organization in a community or condo that devises and enforces regulations for the residences within its jurisdiction. The HOA maintains a certain standard of consistency, convenience, and aesthetics for the neighborhood, funded by monthly or annual dues. These fees cover operations and upkeep for the current year, such as landscaping and security costs, and contribute to a reserve for longterm repairs.
In addition to basic maintenance, HOAs frequently offer additional amenities, such as swimming pools, tennis courts, gyms, and community centers, for which maintenance costs are included in homeowner dues. Rules vary from one to the next, but HOAs often regulate things like landscaping, outdoor holiday decorations, pet size and breed, rentals, and house paint color.
Technically, homeowners associations operate as corporations, usually nonprofits. The California Courts of Appeal* has compared HOAs to “quasi-government[s]” in that they enforce laws for the community and collect fees (reminiscent of taxes) which are used to maintain and improve the neighborhood for the benefit of its residents. The associations are themselves governed by California Civil Code, particularly the Davis-Sterling Common Interest Development Act**, which outlines homeowners’ rights with respect to HOAs—definitely worth a read if you’re considering purchasing a property in one of these communities.
So, without further ado, let’s talk about the pros and cons of the homeowners association.
WHAT EXACTLY IS AN HOA, AND HOW DOES IT OPERATE IN CALIFORNIA?
A homeowners association, or HOA, is an organization in a community or condo that devises and enforces regulations for the residences within its jurisdiction. The HOA maintains a certain standard of consistency, convenience, and aesthetics for the neighborhood, funded by monthly or annual dues. These fees cover operations and upkeep for the current year, such as landscaping and security costs, and contribute to a reserve for longterm repairs.
In addition to basic maintenance, HOAs frequently offer additional amenities, such as swimming pools, tennis courts, gyms, and community centers, for which maintenance costs are included in homeowner dues. Rules vary from one to the next, but HOAs often regulate things like landscaping, outdoor holiday decorations, pet size and breed, rentals, and house paint color.
Technically, homeowners associations operate as corporations, usually nonprofits. The California Courts of Appeal* has compared HOAs to “quasi-government[s]” in that they enforce laws for the community and collect fees (reminiscent of taxes) which are used to maintain and improve the neighborhood for the benefit of its residents. The associations are themselves governed by California Civil Code, particularly the Davis-Sterling Common Interest Development Act**, which outlines homeowners’ rights with respect to HOAs—definitely worth a read if you’re considering purchasing a property in one of these communities.
So, without further ado, let’s talk about the pros and cons of the homeowners association.
Pros
PRESENTABLE AND CONSISTENT APPEARANCE
Your hood will always look good. There will be nary an overgrown rosebush, lime green garage door, RV parked for too long in the neighbor’s driveway, unkempt road, neglected lawn, leaf-strewn swimming pool, or over-the-top reindeer display. If you enjoy a consistent, upscale aesthetic and appreciate a meticulously kept, clean community, then the right HOA could very well be your happy place.
LESS WORK—UPKEEP AND SERVICES
HOAs use homeowner dues to maintain common areas like parking lots, sidewalks, and pools. And many offer additional services like lawn maintenance, security, and pest control. These perks can be a lifesaver when you lead a busy life, saving you the hassle of researching, hiring, and coordinating with outside professionals.
RECREATION AND AMENITIES
Most HOA communities and condominiums include onsite recreational amenities—from swimming pools to gyms to tennis courts. So, depending on your particular HOA’s offerings, you may be tempted to skip out on that Equinox membership.
STRONG SENSE OF COMMUNITY
A shared goal of neighborhood harmony and a pooling of resources can foster a deep sense of community among fellow residents. Some HOAs throw annual block parties—a perfect opportunity to get to know your neighbors. If you enjoy being part of a tight-knit community, an HOA might be ideal.
MEDIATION OF NEIGHBORLY DISPUTES
If your neighbor’s tree is dipping a little too far into your backyard, or their dog’s incessant barking is keeping you up all night, you’ve got a built-in mediator at your disposal to help you settle the dispute quickly and calmly.
PROPERTY VALUE MAINTENANCE AND IMPROVEMENT
With reliable maintenance and frequent improvements to the aesthetic of the neighborhood, you can feel pretty confident that the value of your property will increase—at the very least, you can rest assured that it won’t dwindle. And thanks to strictly enforced HOA rules, you don’t run the risk of a nearby neglected or forsaken property causing an eyesore for prospective buyers.
Your hood will always look good. There will be nary an overgrown rosebush, lime green garage door, RV parked for too long in the neighbor’s driveway, unkempt road, neglected lawn, leaf-strewn swimming pool, or over-the-top reindeer display. If you enjoy a consistent, upscale aesthetic and appreciate a meticulously kept, clean community, then the right HOA could very well be your happy place.
LESS WORK—UPKEEP AND SERVICES
HOAs use homeowner dues to maintain common areas like parking lots, sidewalks, and pools. And many offer additional services like lawn maintenance, security, and pest control. These perks can be a lifesaver when you lead a busy life, saving you the hassle of researching, hiring, and coordinating with outside professionals.
RECREATION AND AMENITIES
Most HOA communities and condominiums include onsite recreational amenities—from swimming pools to gyms to tennis courts. So, depending on your particular HOA’s offerings, you may be tempted to skip out on that Equinox membership.
STRONG SENSE OF COMMUNITY
A shared goal of neighborhood harmony and a pooling of resources can foster a deep sense of community among fellow residents. Some HOAs throw annual block parties—a perfect opportunity to get to know your neighbors. If you enjoy being part of a tight-knit community, an HOA might be ideal.
MEDIATION OF NEIGHBORLY DISPUTES
If your neighbor’s tree is dipping a little too far into your backyard, or their dog’s incessant barking is keeping you up all night, you’ve got a built-in mediator at your disposal to help you settle the dispute quickly and calmly.
PROPERTY VALUE MAINTENANCE AND IMPROVEMENT
With reliable maintenance and frequent improvements to the aesthetic of the neighborhood, you can feel pretty confident that the value of your property will increase—at the very least, you can rest assured that it won’t dwindle. And thanks to strictly enforced HOA rules, you don’t run the risk of a nearby neglected or forsaken property causing an eyesore for prospective buyers.
Cons
FEES AND…FEES
Your HOA fees will likely increase over the years. In California, homeowners associations are allowed to raise dues up to 20% with 30 days advance notice. HOAs will sometimes levy “special assessments” for unexpected or previously underestimated expenses like replacements or repairs to common areas. Residents can also incur fines for breaking even seemingly minor rules, or for damaging shared spaces.
LIENS AND FORECLOSURES
In response to overdue fees, HOAs have the right to place liens on, or even force foreclosure on your home. So, staying on top of monthly dues is no slight matter.
BANS OR RESTRICTIONS ON RENTING
Many homeowners associations ban residents from renting out their homes. If you like the option of renting out your abode as a source of income or while you’re out of town, this could be a serious disadvantage. Often, those HOAs that do allow rentals will closely regulate the process, requiring that renters move in on certain days, or governing how much you can charge.
LESS ROOM FOR PERSONALIZATION
With rules regulating the type and volume of flora you’re allowed to plant, signage you’re allowed to display, and colors with which you’re allowed to paint, the eccentric or fiercely independent homeowner may find his or her style cramped by an HOA. What one homeowner might consider a pleasingly consistent aesthetic, another might consider monotonous. And with that strong sense of community may come a degree of surveillance by fellow residents and the association board.
HISTORICALLY TOUGH LEGAL OPPONENTS
Homeowners associations are nearly impossible to take on in court. They usually win and often, when they do, you are responsible for their legal fees.
THIRD-PARTY MANAGEMENT
Volunteer board members can only do so much in their spare time. So the work of managing the HOA is commonly outsourced to third-party management companies with no connection to or personal investment in the community.
OBSTACLES TO SELLING
If you decide to sell your home, your HOA may require that potential buyers be screened and formally approved by the board, which could slow or interrupt the process.
Your HOA fees will likely increase over the years. In California, homeowners associations are allowed to raise dues up to 20% with 30 days advance notice. HOAs will sometimes levy “special assessments” for unexpected or previously underestimated expenses like replacements or repairs to common areas. Residents can also incur fines for breaking even seemingly minor rules, or for damaging shared spaces.
LIENS AND FORECLOSURES
In response to overdue fees, HOAs have the right to place liens on, or even force foreclosure on your home. So, staying on top of monthly dues is no slight matter.
BANS OR RESTRICTIONS ON RENTING
Many homeowners associations ban residents from renting out their homes. If you like the option of renting out your abode as a source of income or while you’re out of town, this could be a serious disadvantage. Often, those HOAs that do allow rentals will closely regulate the process, requiring that renters move in on certain days, or governing how much you can charge.
LESS ROOM FOR PERSONALIZATION
With rules regulating the type and volume of flora you’re allowed to plant, signage you’re allowed to display, and colors with which you’re allowed to paint, the eccentric or fiercely independent homeowner may find his or her style cramped by an HOA. What one homeowner might consider a pleasingly consistent aesthetic, another might consider monotonous. And with that strong sense of community may come a degree of surveillance by fellow residents and the association board.
HISTORICALLY TOUGH LEGAL OPPONENTS
Homeowners associations are nearly impossible to take on in court. They usually win and often, when they do, you are responsible for their legal fees.
THIRD-PARTY MANAGEMENT
Volunteer board members can only do so much in their spare time. So the work of managing the HOA is commonly outsourced to third-party management companies with no connection to or personal investment in the community.
OBSTACLES TO SELLING
If you decide to sell your home, your HOA may require that potential buyers be screened and formally approved by the board, which could slow or interrupt the process.
The Bottom Line
THE BOTTOM LINE
There’s a whole host of factors to consider when you’re contemplating an HOA—from personality, to lifestyle preferences, to budget, to plans for the future.
If you think an HOA may be a good fit, be sure to do the following:
Read and understand every single rule, from California bylaws to HOA-specific regulations.
Once you’ve read the rules, think long and hard about whether you’ll be content to follow all of them to a T. Don’t move in thinking you’ll be the exception when you want to paint your house pink or grow a four-foot wildflower garden. If you conclude that you’re happy to follow the rules for the sake of a pristine and pleasant atmosphere, go ahead and check this item off your list of considerations. If not, an HOA is probably not your cup of tea.
Assess the amenities provided by the homeowners association. Consider how much value they add to the home, and whether or not you’ll take advantage of them.
Evaluate your budget, taking into consideration mortgage and HOA fees. Remember that dues will likely increase, potentially suddenly, and that you may not be able to rely on renting as a supplementary source of income. On the other hand, keep in mind that, in the long-run, you may save on maintenance costs and passively benefit from a larger increase in property value than you might have otherwise.
Whatever your situation and preferences, it’s essential that you work with a knowledgable real estate agent who can talk you through your options, and help you move into the neighborhood of your dreams.
Happy Househunting!
Citation
*Villa Milano Homeowners Assn. V. II Davorge (2000) 84 Cal.App.4th 819
**Davis-Sterling Common Interest Development Act
There’s a whole host of factors to consider when you’re contemplating an HOA—from personality, to lifestyle preferences, to budget, to plans for the future.
If you think an HOA may be a good fit, be sure to do the following:
Read and understand every single rule, from California bylaws to HOA-specific regulations.
Once you’ve read the rules, think long and hard about whether you’ll be content to follow all of them to a T. Don’t move in thinking you’ll be the exception when you want to paint your house pink or grow a four-foot wildflower garden. If you conclude that you’re happy to follow the rules for the sake of a pristine and pleasant atmosphere, go ahead and check this item off your list of considerations. If not, an HOA is probably not your cup of tea.
Assess the amenities provided by the homeowners association. Consider how much value they add to the home, and whether or not you’ll take advantage of them.
Evaluate your budget, taking into consideration mortgage and HOA fees. Remember that dues will likely increase, potentially suddenly, and that you may not be able to rely on renting as a supplementary source of income. On the other hand, keep in mind that, in the long-run, you may save on maintenance costs and passively benefit from a larger increase in property value than you might have otherwise.
Whatever your situation and preferences, it’s essential that you work with a knowledgable real estate agent who can talk you through your options, and help you move into the neighborhood of your dreams.
Happy Househunting!
Citation
*Villa Milano Homeowners Assn. V. II Davorge (2000) 84 Cal.App.4th 819
**Davis-Sterling Common Interest Development Act