Homeowners Associations

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Homeowners Associations

Sections within this essay:

Background
History of Homeowners Associations
Levittown Breaks New Ground
Disputes

Homeowners Association and Government
Getting Involved with Your Homeowners Association
Additional Resources
Organizations
Community Associations Institute (CAI)
National Board of REALTORS

Background

Most cities and towns have zoning requirements that prohibit homeowners from making unrestricted changes to their houses. This keeps people from adding third stories to two-story structures, building three-car garages up to the neighbor's property line, or simply tearing down a house to make room for two houses on the same lot. Most communities, however, have no power to require homeowners to choose attractive colors for their exterior walls, keep their lawns well-manicured, or repair broken steps or walkways. For people who prefer a consistently well-kept neighborhood, there are a number of residential options, known as common interest developments (CIDs). The CID (sometimes called a planned unit development)combines the security of home ownership with the convenience of minimal maintenance. Often they provide residents with self-contained communities with shared amenities such as swimming pools, parks, tennis courts, and buildings for community events. Some CIDs have actual single-unit houses, while others had attached houses or townhomes. Oversight of the common areas is the responsibility of the homeowners association, whose responsibilities include maintaining common areas, managing the CID's budget (residents pay monthly maintenance fees), and ensuring that residents abide by the community's regulations.

The CID differs somewhat from a condominium or a cooperative. The condominium owner owns only the interior space of the unit; the exterior walls are considered part of the common space (and thus are maintained by a condominium owners' association). In a cooperative, owners hold shares in a corporation that owns the property; each resident actually owns shares that correspond to a specific unit. The cooperative fees pay for building maintenance inside and out. With a CID, the resident owns the entire structure and the land on which it sits. CID residents are thus responsible for the exterior upkeep of their own homes. But the community is responsible for maintaining the common amenities; many also take care of mowing lawns.

The convenience is clearly a big selling point. According to the Community Associations Institute (CAI), a national advocacy and education group, there were 274,000 association-governed communities in the United States in 2005, with 22.1 million housing units and 54.6 million residents. In contrast, in 1970 there were only 10,000 such communities, with 701,000 housing units and 2.1 million residents. A survey conducted for CAI by polling group Zogby International in 2005 showed strong satisfaction among CID owners. Some 71 percent of survey respondents reported CID living as a positive experience, as opposed to only 10 percent who said it was a negative experience. More than half of respondents said they were satisfied with their homeowners association, and 90 percents said they were on friendly terms with association board members. In addition, 78 percent of respondents said that the association rules and regulations enhanced the CID's property values.

It is those rules and regulations, known as covenants, conditions, and restrictions (CC&Rs), that make CIDS popular—but CC&Rs are also the basis for many resident complaints. The CC&Rs generally cover the exterior appearance of each residence and their goal is to create a uniform environment. The difficulty arises when the homeowners association and individual residents have a different idea of what "uniform" actually means. Some CIDs have very general guidelines that allow people to express a certain degree of individuality (landscaping, for example, or exterior paint colors) as long as their homes are well-kept. Other CIDs have CC&Rs that prohibit residents from choosing their own paint trim colors, planting their own shrubs in their front lawn, or even hanging an non-approved color of curtains or blinds in their windows. Often, the CC&Rs are included in the property deeds, which means removing a particular regulation can be time-consuming and cumbersome.

Among the items a typical homeowners association may regulate:

pets
shingles, siding, and exterior paint
fences, shrubs, and hedges
landscaping (what flowers can be planted, for instance)
swing sets, basketball hoops, and other structures for children
mailboxes
noise
tool sheds
home-based business

Thus, one CID may allow residents to plant their own gardens but not to fence off their gardens. Another CID may allow cats or small dogs but not large dogs. Still another might allow children's swing sets in the back yard but not a basketball hoop in the front.

Along with the CC&Rs, fees are something that can vary considerably. Some CIDs charge a nominal monthly fee to maintain common areas, while others can charge significantly higher fees. In addition, CIDs can levy assessments on residents for major renovations or repairs. These charges can quickly add up, and the fee policy depends on what the CID and the governing association determine it to be. In some cases, residents who either cannot or will not pay required fees can face foreclosure.

Those who want to explore the option of living in a community development should do their homework before they commit to purchasing a home. The need to know what the restrictions are, and they need to know whether they can live with those restrictions.

History of Homeowners Associations

In the nineteenth century, the United States began to transform itself from a primarily agricultural society to an industrial society. A growing number of people took jobs in cities, but most cities were overcrowded, dusty, and noisy. The advent of commuter rail lines allowed people to work in the city and live outside the city. A series of "railroad communities" grew up along rail stations. Usually these communities were populated by middle-class families.

The twentieth century made people even more mobile, thanks to the automobile. This led to a series of planned communities around the country. In some, the houses would look essentially the same; in others, several designs would be built. These communities attracted more affluent families; there were few restrictions, but people who lived in these communities generally shared common ideas of how streetscapes should look. Homeowners associations as we know them today did not really exist; if similar associations existed in any of these early communities, their purpose was often to restrict residency based on race or religion.

Levittown Breaks New Ground

The first modern planned development was Levittown, built on the site of a potato field on Long Island, off the coast of New York. Builder William Levitt constructed a series of inexpensive but attractive homes that veterans could purchase with low-interest loans guaranteed by the federal government under the Servicemen's Readjustment Bill of 1944 (better known as the GI Bill). Between 1947 and 1951 more than 17,000 houses were built in and around the original Long Island community. Although Levittown residents were subject to restric-tive covenants in their deeds, prohibiting such items as laundry lines in front yards, there was no formal homeowners association.

As suburban living continued to become a more attractive option, other developments were built, albeit on a smaller scale than Levittown. These developments were often more self-contained than the large-scale communities in that they maintained stricter standards regarding the appearance of the homes (both the structures and the landscaping). The general idea was that people who were looking for certain amenities (whether restrictions on pets or rules governing hedge planting) would be drawn to these communities; those who sought other amenities would look at other developments. Despite the logic behind this, it is not uncommon for residents of a CID to find themselves in disputes with other neighbors, or with the homeowners association, over seemingly minor infractions of the rules.

Disputes

Some of the disputes between homeowners and their associations are clearly misunderstandings, others are amusing, and still others are considerably more serious. Residents have been sued by their homeowners associations for using the wrong shade of paint; in one Atlanta case in 2003, the homeowner took paint chips with her to match the paint, but because the colors chosen were not specifically listed as "approved" colors by the homeowners association, she was ordered to repaint her house. A couple near Coeur d'Alene, Idaho was instructed to remove six pink flamingoes they had placed on they front lawn; they admitted freely that the birds had been placed there in protest of the homeowners association's arbitrary rules regarding lawn ornaments.

After the attacks of September 11, 2001 and the government's decision to invade Iraq in 2003, many people across the country adorned their homes with American flags and signs reading "Support Our Troops." In a number of cases, residents of CIDs found that they were barred from doing so under the rules set forth by their homeowners association.

Homeowners Association and Government

Can government get involved in resolving homeowners association disputes? The answer depends on the issue at hand. For general resident-association disputes, most government agencies are unlikely to get involved. In an information package distributed to CID residents by the State Attorney General's office in New York, the answer is clear: "In most cases there is no government agency that can help unhappy owners who are having problems with their homeowners association." That does not mean governments are never able to get involved. When homeowners associations clearly overstep their bounds, government does sometimes step in. In June 2005 Colorado passed a measure known as Senate Bill 100, which prohibits homeowners associations from adopting rules that prevent residents from displaying the American flag or political signs. It also limits the availability of foreclosures and requires homeowners associations to give potential buyers a copy of the rules that govern the CID.

One reason government is often reluctant to get involved with these disputes is that often for every one resident who has a complaint about a particular rule there are dozens of residents who value that rule. (The CAI survey results cited above illustrate this.) Many people choose to live in a community that guarantees them a sense of structure and uniformity, because along with structure and uniformity also comes security and peace of mind.

Regardless of the legal standing, most people would say that there is a difference between a resident who inadvertently violates a CID rule and one who deliberately does so. Colorado's Senate Bill 100 was actually less stringent when it was signed into law than it had originally been. Governor Bill Owens explained that taking too much authority away from homeowners associations ignored the fact that many CID residents had chosen to live there because they wanted a neighborhood with clear regulations.

Getting Involved with Your Homeowners Association

One way residents can help ensure that their homeowners associations set reasonable rules is to get involved themselves by joining their association board. Homeowners association boards (likewise condominium and cooperative boards) are made up of residents and the positions are acquired through elections. In fact, more than 1.25 million CID residents nationwide serve on their community association boards, with an additional 300,000 serving on board committees.

Depending on the structure of the organization, the board can have fairly sweeping power, and often that power is exercised arbitrarily. Often, these are the boards that find themselves the subject of legal action. Homeowners association boards can in fact work effectively and harmoniously, but it takes work. Many of the people who serve on these boards, after all, may have no governance experience.

Those who have no interest in joining a board should stay involved nonetheless. The best way to know what is going on within the community is to attend board meetings and to hold members accountable. As with any community, the best way to ensure that one's agenda is put forth is to be active within that community.

Groups such as the Community Associations Institute (CAI) are useful for new or established board members. They provide data about CIDs and homeowners associations, and they also advocate on behalf of homeowners associations. In addition, CAI offers a series of educational programs, both nationally, and locally, for board members, property managers, and CID residents. The goal is to make the governance of the CID a good experience for all involved. This serves a practical goal as well as a humanitarian one. From a practical standpoint, the well-run homeowners association whose regulations are understood and respected within the community is a more attractive place to live, which means that property values remain more stable. From a human standpoint, a harmonious repatinship between the homeowners association and the residents adds to the quality of life—which, after all, is the primary reason people move into community developments in the first place.