Things to Consider When Purchasing a Home in an HOA Community

Before purchasing a home that’s part of a homeowners association, you should research the community’s covenants and assessments, both of which will be set forth in the declaration and bylaws.  The HOA’s board or the seller can usually provide copies, or the documents can be viewed in the county land records, which are often available online.  Remember, when you accept the deed to a property, you are agreeing to be bound by any covenants that come with it.  So, make sure you know what you’re getting into.

The restrictiveness of covenants varies considerably between communities, depending in large part on the nature of the community and where it is located.  A laissez-faire rural development with large lot sizes, for example, might be fairly permissive - not requiring much more than that you keep your lawn mowed and remove any eyesores like visible trash or debris from the property.  On the other hand, a suburban community with more closely situated homes might restrict everything from the color you can paint your house, to the size and breed of dogs you can keep, to the type of garden you can have (if any).  Covenants are mandatory and strictly enforced by most associations, so be certain the community’s standards are compatible with your lifestyle before buying a home.

It’s worth noting that, while Ohio law expressly requires homeowners to abide by applicable covenants, certain restrictions are prohibited. Condo associations, for instance, cannot prevent their members from displaying the American flag.  O.R.C. §5311.191.  Likewise, any covenant that violates the federal Fair Housing Act or Civil Rights Act is unenforceable and void.

Assessments are the fees each member contributes toward an association’s common expenses, providing the necessary funding for the “administration, governance, and maintenance” of the association.  O.R.C. §5312.10(A)(1). Like covenants, assessments vary substantially between communities.  A smaller association with few common elements might charge as little as $100 per year, while assessments in a large association with elaborate recreational facilities might be as much as a few thousand.

The precise dollar amount is either stated in the declaration or, if not, calculated according to a method laid out in Ohio’s Planned Community Law.  Each year, the board adopts an estimated budget for all anticipated expenses and collects assessments from homeowners according to the budget.  O.R.C. §5312.06(A)(1).  Each lot is responsible for an equal share of the total budget unless the declaration provides for different proportions.  If an assessment cap is expressed in the declaration, the board cannot increase the amount without first amending the declaration, which requires approval of 75% of the association’s members.  O.R.C. §5312.05(A). 

As with covenants, you’ll want to be sure you’re comfortable with the annual assessments before acquiring a home in an HOA.  Because an owner’s failure or refusal to pay assessments impedes an HOA’s ability to function and burdens other owners, the board is granted strong enforcement powers.  Under Ohio law, boards have the authority to suspend voting rights and common facility privileges of delinquent owners. O.R.C. §5312.06(D)(15).  An association can also record a lien against a non-paying owner’s property and foreclose on the property to satisfy the lien in the same manner that a bank forecloses on a delinquent mortgage.  O.R.C. §5312.12.  If an association is required to file a civil lawsuit to collect assessments or to otherwise enforce community covenants and restrictions, it can recover its attorney’s fees and other costs of enforcement from the member.  O.R.C. §5312.11.

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Community LivingChristopher R. Moore, Esq.Real Estate Investment