Tips for the Prospective MemberNov 10, 2014
When buying a common interest property, you automatically become a member of an association. Here are a “baker’s dozen” of items to consider first:
1. Read the CC&Rs
The document is a joint agreement between all the owners regarding the property, and it binds you when you become an owner – so read it before you take ownership. Look for restrictions regarding how you use your property – Are there pet limits? Can you park your RV in the driveway? Are there restrictions against hard floors (in multi-story buildings)? You will want to know that before you own.
2. Check the reserves disclosures
Prudent associations set aside money each month to offset the ongoing deterioration of major capital components (roofs, asphalt, paint, etc). Associations with little money saved in reserves are more likely to impose special assessments against the members when major refurbishments are needed. Unfunded reserve accounts are a form of hidden debt not reflected on the balance sheet.
3. It isn’t about “me,” it’s about “us”
Common interest communities are just that – communities. The HOA is not “them,” it’s “us”.
4. Most associations need professional managers
In California, the common interest development (aka “HOA”) law is so complicated it is difficult to operate one without professional help. If the association has no professional manager, it is probably innocently violating many laws (and the board is probably working too hard as free managers of the community).
5. Board Members
The board members are homeowners also, and they pay the same assessments you do. They volunteer their time to handle things you don’t have to worry about. If you want to worry about those things, volunteer for the board.
6. Common areas
If you buy a condominium, understand that “common area”, the shared property, is probably a lot more than you think. It may include even the drywall underneath your paint, or the floor underneath your carpeting.
7. In associations it is NOT better to ask for forgiveness than permission.
You may be required to apply in writing to the association before you make changes to your home (and possibly to your yard).
8. Don’t ignore the rules
Never assume the board is not enforcing a rule or restriction, so that it is OK for you to ignore it. The association’s enforcement actions are normally in closed session, and you may be unaware of the board’s actions against violators… until you become one.
Ask about the reputation and credentials of the manager. No license or credential is required in California to manage associations.
10. HOA managers don’t make decisions
Managers advise the board, and then implement board decisions and policy.
11. Individual directors have no power to make decisions
HOA leadership is a team sport, and the board makes decisions, not one director (even if President).
12. Free education
Read the Community Association Institute “Introduction to Community Association Living”. The free download can be found at www.caionline.org. Click on “education” then “education for homeowners”.
13. It’s all about being a good neighbor
Consideration is the key to happy and successful association living. A self-centered focus is a path leading to conflict and unhappiness with the neighbors in the association.
Common interest development associations are a large and increasing sector of the housing market. Look before you leap, embrace the benefits (and responsibilities) of common interest community living, and have a positive experience!
Written by Kelly G. Richardson
Kelly G. Richardson Esq., CCAL, is a Fellow of the College of Community Association Lawyers and a Partner of Richardson | Ober | DeNichilo LLP, a California law firm known for community association advice. Submit questions to [email protected]. Past columns at www.hoahomefront.com. All rights reserved®.