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Seven out of ten people who live under owner associations are happy with their communities, according to independent research conducted for the Community Associations Institute (CAI) by IBOPE Zogby International. However, for those looking into buying a home within a Homeowner’s Association (HOA), understanding the rules and regulations that could likely be involved is essential, especially when it comes to things like personalizing the home. From the importance of understanding the CC&Rs to the financial considerations involved, here’s what you should know before jumping in.

Understanding the Covenants, Conditions and Restrictions (CC&Rs)

When purchasing an HOA home, there will be a set of rules involved that homeowners must abide by, which are described in the Declaration of Covenants, Conditions, and Restrictions (CC&Rs). Nolo.com notes that the goal of CC&Rs in real estate is “to protect, preserve, and enhance property values in the community.” That said, the CC&Rs entails what you can/cannot do with your home, and can cover aspects such as property maintenance and home decor, making this the first thing to consult when thinking about personalizing your home. For example, Forbes notes that it’s common for HOAs to require properties to maintain a consistent look, meaning that the CC&Rs are likely to detail restrictions such as what colors and designs are or aren’t allowed.

Consulting the HOA’s CC&Rs is perhaps one of the simplest ways to determine whether or not you can implement various personalizations, whether you want to paint the home, put out yard decorations, or plant any flowers out front. It’s important to note that failure to check the CC&Rs can potentially result in violating a rule or regulation, which can lead to various consequences. This is especially important, as the CC&Rs are part of a binding contract, according to the Forbes article.

Forbes notes that if you break a rule outlined in the CC&R, you’ll likely be fined, in addition to having to fix the issue (otherwise you may get fined each day that the violation is present). That said, the Forbes article goes on to further explain the consequences of violating a CC&R, stating “Failure to pay your fine or fix the problem could also result in losing privileges, such as access to the onsite laundry or gym, until you’re squared up. If necessary, the HOA may have the issue fixed themselves and send you the bill. However, before it comes to that, you’ll likely have a hearing before the HOA board first and be given the chance to explain your situation or appeal any decisions made by the board.” That said, it’s also noted that should the fines go unpaid, further consequences (such as going to court over the matter) could occur.

Getting HOA approval

In some instances, you may need to get approval from the HOA before undertaking a project. Hoamanagment.com notes that you need to seek approval “for exterior renovations like painting the exterior of a home, building a fence, and even changing the front door of your home. Similarly, the HOA requires homeowners should seek approval when undertaking interior renovations like replacing bathroom tiles.” Other projects that are likely to require HOA approval include flooring, rewriting, structural projects, and exterior projects like landscaping. However, projects like landscaping a fenced backyard or interior trim work likely won’t need HOA approval, according to the site. In any case, it’s imperative to check beforehand to avoid any consequences.

 The financial considerations involved

Understanding the financial considerations involved with making any changes to an HOA property will allow you to make an informed decision. Home Advisor, for instance, notes that people often assume that work done inside is paid by the homeowner, while the HOA covers the costs if the work is on the exterior of the home — though there’s more to it than that. Home Advisor explains that every HOA home has ‘common area elements,’ stating that “Multiple HOA homes share these communal services, which include the waterline, sewage pipes and electrical line.” That said, it’s noted that the HOA will cover renovations or repairs to remodeling projects that impact these common area elements, while the homeowner will cover the costs should a project only impact their home, according to the site.

While each HOA’s rules and regulations may vary, Home Advisor gives additional insight as to which projects are likely to be covered by the homeowner or the HOA (or, in some cases, both). Adding a new fireplace is just one example, as the homeowner will typically pay for the indoor fireplace, while the HOA is likely to pay for the exterior venting if the roof is covered by the HOA. Detached garages, however, are a bit more complicated, as they may be covered by potentially both the HOA and the homeowner, according to Home Advisor. However, if there is a project that the HOA covers that happens to be too big/expensive and exceeds anything in the reserve fund, associations may consider taking out an HOA Loan. This means that the bank will furnish the community association with the money that is needed for the project, though there are considerations (as with any loan). For example, while HOA Loans will allow for quick funding and will allow money to be left in the reserve fund, interest will be involved, thus making the project more expensive when looking at the big picture.

Buying an HOA home can bring an array of benefits to the table, such as maintaining property value, access to amenities, and community connection. However, when it comes to personalizing an HOA home, there are several things to keep in mind before jumping in — such as the rules and regulations involved, as well as the financial considerations.