You've found the perfect property to purchase, whether
it is a condo or detached house. If it falls within
the guidelines of a community association make sure
you educate yourself on the bylaws before buying or
else you run the risk of being terribly unhappy.
Homeowners association, property owners association,
cooperative, condominium association, council of
homeowners and common interest development are all
names that mean there exists a governing body whose
fiduciary responsibility is to preserve the nature of
the community and the value of the property owned by
members.
However, sometimes conflicts arise and often they
happen because buyers become attached to a property
and decide to buy it before they fully review the
governing documents, including the Covenants,
Conditions & Restrictions (CC&Rs).
"Most of the conflict in community associations comes
down to this: it's the delicate balance between
protecting the best interest of the community as a
whole against the preferences of individual
residents," says Frank Rathbun, vice president of
communications for Community Associations Institute.
"When you move into a neighborhood it looks a certain
way, the homes look a certain way . the landscaping,
the pool, the tennis courts . . When you move into a
neighborhood those are your expectations. It's the
board's fiduciary responsibility to try to maintain
those services and amenities," says Rathbun.
He points out that these regulations are for the
benefit of the whole community, "If the community
starts to go down, if for whatever reason curb appeal
. is diminished you're going to have a lessening of
property values and that hurts everybody in the
community."
According to research conducted by Gallup
Organization, there are more than 54 million Americans
living in properties governed by community
associations. Approximately 75 percent of homeowners
reported they were "very" or "extremely" satisfied
with their community. Influencing factors were
community appearance, safety, financial
accountability, location and neighbors. Of those
living in community associations, 30 percent of
homeowners reported having an "extremely" positive
opinion of their community that compared to 24 percent
of homeowners who do not live in an
association-governed community.
Those statistics may partly be responsible for
community associations growing. The Community
Association Institute states that close to four out of
five housing starts since 2000 have been in
association-governed communities, including
condominiums converted from existing rental units.
Additionally, those living in community associations
are active in their communities; more than 1.25
million people serve on community association
governing boards, with another 300,000-plus involved
as committee members.
However, despite the glowing report on community
associations, problems still occur. The biggest
problems are issues over: architectural guidelines
such as outside paint colors, screen doors, etc.;
pets; parking; maintenance of yards of individual
homes; and even backyard items such as sheds.
According to the Community Association Institute there
are very important questions to ask before you
purchase a property that's governed by a community
association so that you don't get locked into rules
that you can't or don't want to abide by. Here are a
few of them to keep in mind:
* How much are the assessments, and when are
payments due?
* How often can assessments increase and by how
much?
* What procedures are in place to collect
delinquent assessments?
* What is the annual budget and how does it
compare to similar communities?
* Does the community have a viable reserve to fund
major, long-term maintenance and repairs?
* Are there restrictions on renting property?
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