Homeowner 101: Exploring the Community Association

By John Voket

It used to be that if you were moving into an apartment or anything but a sophisticated private community or condo complex, you dealt with a property manager or landlord. But I recently learned that today, even modest condo clusters, apartment complexes and entire neighborhoods are ruled by community or homeowners associations.

In a recent post from HALT, a Washington, D.C.-based organization aiming to help Americans navigate the legal system with or without a lawyer, the number of community associations has exploded in the past decades, growing from 10,000 in 1970 to a quarter million today.

An estimated 50 million Americans now live within community associations. So if you're in the market for a condo, townhouse or co-op, there are some important things you should know about your rights and responsibilities if your future home is part of a community association.

HALT says community associations require individual owners, as members of the association, to be bound by contract to a set of rules that is enforced typically by an elected group of members called the board of directors. The board also collects payments from members to cover the costs of operating and maintaining the association.

Community associations can exercise a tremendous amount of control over the residents living within them, including restrictions that dictate things like what color you paint your house, what type of shrubs or flowers you plant in your yard--even what your garbage can must look like.

HALT publishes a checklist for potential tenants and residents bound by community or homeowners associations. The organization advises you to:

Carefully read the Covenants, Conditions, and Restrictions or CC&Rs. Determine whether or not the requirements and obligations of tenants are compatible with your needs and lifestyle.

Obtain a copy of the bylaws. Carefully examine the by-laws and any additional rules or documents to be sure you will be a good fit in the association.

Review the association's financial status. Determine that the association is financially stable by reviewing its operating budget, reserve account and insurance coverage. Also find out what your financial role will be--ask how much the assessments (or bills) are and what the process is for collecting and raising them.

Visit the association and attend a board meeting. Get a sense of what living in an association would be like by visiting the association and talking to members. Also attend a board meeting or review minutes of previous meetings to get a feeling for how the association is run.

Plan to get involved. Know that this legwork is only the first step. Prepare to stay informed by attending meetings and reading all notices issued by the board of directors once you move in.

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