More HOA Fun!
That’s right! Last time we talked about homeowner’s associations, or HOA’s, we were discussing generally what HOAs are and where their authority comes from.
By way of review, the HOA is essentially a 501(c)(3) nonprofit corporation that exists for the sole purpose of governing your neighborhood. The HOA enforces the restrictions and requirements that can be found in the recorded Declarations, it takes responsibility for upkeep and maintenance of any common area, and it sometimes might even be tasked with planning fun community events.
Remember that the HOA, through its Board of Directors, is going to be bound by several different sets of rules. The Planned Community Act is North Carolina’s body of statutory law regulating what HOAs can and can’t do, while the Bylaws and Declarations are going to be more particularized to the individual HOA and Board. Though there are a lot of requirements that the HOA has to abide by, it remains true that North Carolina law affords them quite a bit of discretion. This can be problematic in some cases, which is why it’s important for homeowners to understand exactly what their rights are. Thus this blog series!
So what’s today’s topic?
Today, we’re going to talk about some of the trade-offs that you sign up for when you move into an HOA-governed neighborhood. It’s true that the HOA imposes some burdens on its members (meaning the homeowners living in the community), but it’s also true that the HOA provides some very valuable benefits as well. Let’s talk about it, shall we?
Regular assessments. If your neighborhood has an HOA, chances are that you have to pay regular assessments, or “dues,” to the HOA on a regular basis; be it monthly, quarterly, or annually. Depending on what all expenses the HOA is tasked with covering, the amount of these dues can range from just a few bucks per year all the way up to several hundred dollars every month. Dues are meant to keep the HOA solvent, both in terms of day-to-day expenses and long-term reserves, which are a kind of “rainy-day fund” in case of emergencies.
Special assessments. Special assessments are just expenses borne by the homeowners outside of the regular dues. They’re about as popular as you would probably expect. Special assessments are generally levied in order to pay for major, high-dollar projects. If you own a condo or townhome, a lot of times you’ll see special assessments for roof replacements; other times you’ll see them put in place for work on the neighborhood pool, tennis courts, playgrounds, hiking trails, et cetera.
Home project compliance. This is one of the heaviest and most unpopular burdens that HOAs place on their members. Before beginning a home improvement project - be it painting your house, installing a fence, or even removing a tree - you may have to first seek the approval of the HOA Board. This can be pretty annoying, and it causes a good bit of consternation since it interferes with a homeowner’s right to do what he wants on his own property. But it does provide major benefits as well, which we’ll get into below.
Continuity. So we’ve established that it’s annoying when you have to get approval from the HOA before working on your own home. However, consider that your neighbors also have to get that approval, and if their projects are unsightly or even weird, the HOA can prevent them from undertaking that project. If you recall our Nemo-obsessed neighbor from Part 1, the HOA could nip that project in the bud, saving you from a lot of headaches. At the end of the day, keeping each home in the neighborhood looking nice, clean, and normal benefits everybody and even helps to keep property values up.
Consolidation. If you’re like me, you get annoyed when you have to pay separate bills for water, trash, sewer, and the like. Increasingly, neighborhood HOAs are taking on the responsibility of paying those utilities themselves, folding these expenses into the regular assessments. The idea is that since each homeowner has to pay those utilities as well as the regular assessments anyways, it makes a lot of sense to bundle them all together where possible.
Neighbor disputes. If you’ve lived in a neighborhood for long enough, you’ve probably discovered just how nasty neighbor disputes can get. I’ve seen cases with name-calling, early-morning-horn-honking, and even dog-poop-throwing, and it can easily get even worse than that. Some folks get really sensitive when they perceive that you’re messing with their castle. The HOA, through its Board, can really help to defuse a lot of these conflicts before they get out of hand. This can keep everyone in the neighborhood happier, and more importantly, safer.
Nice! Sounds like quite the trade-off.
It really is. I don’t think there’s a person alive who would tell you that HOAs are generally all good or all bad. It’s a mixed-bag, but ultimately HOAs are becoming more and more prevalent because they offer more benefit than burden.
Next time, we’ll discuss the scope of the HOA’s authority and how best to identify it. Stay tuned!