Understanding HOA Covenants: What Buyers and Sellers Need to Know

With over 75 million Americans living in HOA communities—and thousands more forming each year—homeowners' associations (HOAs) play a key role in the real estate market.

Whether you are buying or selling a property, understanding HOA covenants is essential to avoid surprises and ensure a smooth transaction.

What Are HOA Covenants?

HOA covenants are outlined in a document called CC&Rs (Covenants, Conditions & Restrictions).

This document establishes community rules and impacts key aspects of the property and residents' lifestyles. Some common restrictions include:

✅ Home Exteriors: Limits on paint colors, landscaping, and decorations to maintain a uniform community aesthetic and preserve property values.

✅ Pets and Parking: Rules regarding the size and type of allowed pets, breed restrictions, and regulations for street or designated parking areas.

✅ Fees and Maintenance: Mandatory HOA fees covering common area maintenance, security, trash collection, and other amenities.

The CC&Rs aim to maintain order and quality of life in the community, but they can be restrictive for some homeowners.

It is important to carefully review these documents before purchasing a property in an HOA community.

Why Is This Important for Buyers and Sellers?

🏡 Buyers

HOA rules can influence lifestyle, rental potential, and overall property use.

Before purchasing in an HOA community, it is essential to review the CC&Rs to ensure the regulations align with your needs and expectations. Additionally, buyers should consider the following:

• Additional Costs: HOA fees can vary significantly and impact the owner's monthly budget.

• Renovation Regulations: Some HOAs impose restrictions on home renovations and modifications.

• Compliance and Penalties: Violations of CC&Rs can result in fines, restrictions, or even legal action against the homeowner.

🏡 Sellers

If you are selling a property in an HOA community, you must disclose key information such as HOA fees, established rules, and any pending disputes. It is also advisable to:

• Ensure there are no overdue HOA fees, as this can affect the sale.

• Inform potential buyers about any regulations that may impact their purchase decision.

• Obtain an updated copy of the CC&Rs to provide to interested parties and avoid complications during the transaction.

Final Considerations

HOAs can offer significant benefits, such as common area maintenance, security, and better community organization, often leading to increased property values.

However, they can also impose restrictions that limit certain personal freedoms.

Both buyers and sellers should be well-informed to make the right decisions.

Carefully reading the CC&Rs and consulting with real estate professionals can prevent conflicts and ensure a smoother experience when buying or selling a property within an HOA.

Ultimately, living in an HOA community can be a positive experience if the rules and regulations align with your lifestyle and expectations.

The key is to stay informed and evaluate whether an HOA community is the right choice for you.