Homeowners associations (HOAs) are gaining popularity all across the state of Maryland and property owners are flocking to purchase property that is part of an HOA. Take a look at this list to get an idea of just how many HOAs there are in existence right now, with additions consistently being made.
So why the increase in HOAs?
Homeowners associations appeal to many property owners because their aim is to maintain property values, serve the best interests of those in the community, and keep some order amongst a diverse group of people. And, as a property owner that leases a home, these are great benefits.
You want your home to maintain value. You want your tenants to have their best interests served. And of course, you want a peaceful neighborhood so your tenants want to stay.
However, HOAs have a reputation for being difficult to deal with. And unfortunately, this difficulty trickles down to property owners, their property managers, and even their tenants.
Thankfully, we have some great tips for handling a tough HOA that you and your tenants can take advantage of to ensure the best possible leasing experience. In addition, if you employ Montgomery County’s leading property managers to care for your property and tenants, these tips can pass from manager to tenant easily during the move-in period.
Today we will look at what exactly a homeowners association is and how best to handle one if they are tougher than the norm.
What is a Homeowners Association?
A homeowners association, or HOA, is a legal entity created to manage and maintain the common areas of a community. These common areas include places such as pools, clubhouses, landscaping areas, parks, streets, and roads.
And, as mentioned earlier, they are quite popular. As of 2012, nearly 60 million Americans live in a community that is regulated by a homeowners association.
HOAs are typically established in communities that include condominiums, single-family homes, or townhouses. And, as the leaders of the community, HOAs provide rules, called the “Declaration of Covenants, Conditions, and Restrictions” (CC&Rs), regarding what can and cannot occur within the common areas of the community.
Here are some of the key traits of a typical HOA:
- They are usually non-profit corporations
- They have the authority to enforce the bylaws within the CC&Rs
- Membership of the HOA is mandatory for all those living within the community
- Mandatory dues are collected monthly from property owners
- There is an elected board of members, most of which are volunteer homeowners of the community
- Many HOAs hire a property management company to conduct things such as maintenance, bookkeeping, and dues collection
In addition, HOAs provide services such as maintenance of common area landscaping, neighborhood security, activity organization for residents, and approvals for exterior home improvements property owners want to make.
How to Handle Strict HOA Rules
All HOAs expect residents, whether owners or tenants, to abide by the community’s CC&Rs. However, as a Montgomery County rental property owner, it is your responsibility, or that of your property manager, to ensure your tenants follow the HOA’s regulations. In fact, here are some things most HOAs will want property owners to provide any tenant that leases their home:
- A copy of the HOA’s CC&Rs
- HOA rules and regulations must be a condition in all lease agreements
- Property owners or their property managers will be held responsible for tenant violations
- Tenants must communicate with HOAs via the property management company
- Multiple tenant violations can lead to termination of residency
As you can see, there is a lot of responsibility that falls onto property owners and their property managers when leasing a home that is a part of an HOA.
Here are some ways you can lessen that burden and ensure a smooth tenancy that satisfies both your community’s HOA board members and your tenants.
Know Your HOA Bylaws . . .
. . . and follow them. It is a good idea as a property owner to read your HOA’s CC&Rs thoroughly. Your Montgomery County property manager should do the same. This prevents any unusual violations, such as parking in your driveway, from occurring. After all, violations result in fines and possibly termination of your tenant’s stay.
Communicate with Your Neighbors
One of the benefits of owning property within an HOA community is that all of your neighbors are in the same HOA as well. Everyone is following the same rules set forth by the HOA and everyone pays the same monthly dues.
In the case your HOA begins enforcing rules that you feel are unnecessary, or hiking monthly dues beyond that of what is reasonable, reaching out to neighbors you already know to voice your frustrations will be a lot easier. Plus, you can all band together and make a common complaint against the HOA board.
Get Approval for All Changes
Yes, this can be tedious, and often seems unfair. However, living in an HOA means you must have approval for all exterior changes to your home and landscaping, backyard included.
To make things easier with a tough HOA that enforces every single bylaw perfectly, just get approval first.
Getting approval will protect you from fines, complaints from neighbors, and legal trouble. In addition, it is important that your property manager enforce this with your tenants as well.
Make sure your tenants are aware they cannot make any changes, even small ones such as adding a pet fence in their backyard, without gaining prior approval.
Pay Your Dues on Time
This seems obvious, but a quick way to get on the wrong side of a tough HOA is not paying your dues. If you refuse to pay your HOA dues, or even just fall behind, your HOA may have the power to foreclose on your home. Chances are very slim that late dues would result in the foreclosure of your home, but that hefty price for falling behind on dues is not worth the risk.
If You Get Fined, Pay Up
Maybe you have fallen victim to the toughest HOA in the country. As unfortunate as that is, if you receive a fine and the HOA acted within their power to impose such a fine, the best option is to pay the fine.
However, there are three additional options for dealing with an HOA fine if you adamantly believe you shouldn’t have to pay it:
- Ask for a variance. This means you or your property manager are requesting the HOA make an exception to the bylaw violation. If the HOA does not initially agree, they may hold a hearing where other homeowners can come to hear your case and make a decision.
- Take legal action. If the HOA was in violation of their power, with the help of your property management company, you can file a lawsuit against your HOA in response.
- Don’t Pay. Although not recommended, you can refuse to pay the fine. However, if you are dealing with a tough HOA, risking additional fines and a possible foreclosure is simply not worth it.
In the end, dealing with an HOA can be difficult at times. However, there are some wonderful benefits in owning property in a Montgomery County HOA that you may feel are worth the potential extra hassle.
If you are looking to take some of the work off your shoulders, and the stress of dealing with a tough HOA does not sit well with you, contact Bay Management Group today. Working solely in property management and ready to take on the task of managing your property, tenants, and tough HOA, BMG will assure you peace of mind.
Bay Management Group is knowledgeable about how to draft solid lease agreements that include HOA regulation compliance and will protect you should any legal issues arise.
In addition, we are exceptional at taking care of tenant screening and placement, maintenance issues, rent collection, and everything in between that involves your property and tenants.
So, contact us today and start handling that tough HOA in a proactive and beneficial way.