How to Deal with Changes in HOA Requirements
Over 20 percent of homes in American fall into a HOA (homeowners association). There are statistics out there that show HOAs help retain or even increase a home value due to the benefits they provide. Common advantages of a HOA community are parks, swimming pools, tennis courts as well as community green spaces. In addition, a HOA ensures that your neighbor will not park 20 cars in their front yard or paint their house neon green.
However, there can be major drawbacks to living in a HOA community. A quick Internet search will bring up hundreds of horror stories that range from lawsuits over paint color or the type of grass being grown to situations that ended in a foreclosure over unpaid HOA dues.
There is a wide variety of HOA requirements as well as the people that oversee the HOA. Some tend to be more lenient while others may enforce even the most mundane of regulations. Unfortunately, you may find yourself in a battle with your HOA when they require you to make changes to the exterior or interior of your home and in most cases, those changes will not be covered by your homeowners policy.
Can HOAs Require Homeowners to Make Changes or Upgrades?
When it comes to how much power your HOA wields in regards to forcing you to make changes to your home, it often depends on a few factors.
When purchasing a home in a HOA community you are usually required to sign a copy of the Declaration of Covenants, Conditions, and Restrictions (CC&Rs). The CC&R varies by community and your particular CC&R will spell out exactly what type of changes may need to be made to the interior or exterior of your home
If you are purchasing a brand new home there is a good chance you will be aware of any changes that need to be made prior to closing and in most cases, the house will be built to the HOA requirements.
This does not apply if you are building a custom home in a HOA neighborhood, in this case you would need to determine what HOA requirements your new home must meet. These can include the type of materials you can use as well as height restrictions, paint color and even the design of the home.
However, if you are purchasing a used home, it is possible that the previous owner did not meet the requirements and you will have to upgrade the home or make changes to it almost as soon as you move in.
The majority of HOAs will have an architectural review committee whose job it is to make sure that all homes in the community adhere to the rules spelled out in the CC&R. If you are contacted by the HOA in regards to changes that need to be made to your home, it is most likely the architectural review committee that is requesting the changes.
Where trouble often starts is when the HOA changes or amends the CC&Rs. In many cases, this can be done without the approval of homeowners and once the changes to the CC&R are official, they can require homeowners to make the changes to their homes.
Legally, when you sign a CC&R you are signing a legally binding document that is enforceable. The HOA can take legal action against you if you fail to meet CC&R requirements or pay your HOA dues. Legal remedies can include putting a lien on your home or even foreclosure if things go far enough.
Insurance Will Usually Not Cover HOA Change Requirements
While your homeowners insurance may cover some changes made to your home if it is damage by a covered peril such as fire or wind, it usually will not cover changes requested by an HOA. As an example, if your home is damaged by a hurricane, your insurance will pay to repair or rebuild it to its pre-damaged condition.
However, they will not pay to rebuild it using more expensive materials or to add features required by the new HOA CC&R. This can apply to a variety of situations. Your HOA may want you to use upgraded shingles on your roof or other exterior materials that were not used on the home originally. If this is the case, your insurance policy will usually not cover these additional costs.
This means that you will be covering these added costs. In most cases, if you argue with the HOA they will claim that the new requirements are necessary to maintain home values in the community.
What Can You Do Regarding a HOA Change Requirement?
If your HOA is requiring a change to your home that will not be paid for by your insurance policy, there are a few things you can do:
Verify the requirement is in the CC&R: In most cases, the change requested will be in the CC&R but there have been cases of an HOA committee member trying to force changes without the actual authority to enforce it. Request a copy of the CC&R if you do not have the latest version and make sure the request is in writing. If the change is not in writing, you do not need to make the change. Hire a lawyer if necessary to review your options.
Check with your neighbors: Verify that all of your neighbors are being required to make the same changes. If it turns out that you are the only one in the neighborhood that is being targeted you may have a case of discrimination which means you can file a lawsuit against the HOA. Remember, lawyers can be expensive so weigh the cost of the lawsuit against the cost of the change they are requesting.
Request a hearing: In most cases, the HOA must allow a hearing on the matter. If they refuse to grant you a hearing, you have grounds for a lawsuit. However, just because you are granted a hearing does not mean that the change request will go away, in most cases the HOA will still require that you make the changes.
Join the HOA: If you are unhappy with the direction your HOA is going, get involved. Go to meetings, ask questions, petition for changes and if possible run for a seat on the HOA board. The majority of HOA boards are members of the community.
Make the Changes: If none of these options work, there is a good chance that you will have to make the changes the HOA is requesting or prepare for a long and expensive legal battle.