Homeowner's Associations
©2001 By David Regenbaum, PCAM®
Association Management Inc., AAMC®
Why do so many people choose to buy a home in a homeowners association in spite of all the adverse publicity? The majority of homes purchased in the last few years were in homeowners associations. There have to be good reasons why so many people are choosing to live under the jurisdiction of homeowners associations. To help us understand this phenomenon lets exAMIne some of these reasons.
Creation of Standards
The developer of a homeowners association sets the standards for the community and has these standards inscribed in a legal document that creates the community and sets up the homeowners association. This document is referred to by many names but most commonly is called the declaration of covenants, conditions and restriction (CC&Rs) or the deed restrictions. Restrictions generally have a negative connotation, but in this context they are very beneficial to owners within the community because of the protection they provide for individual owners. The document prescribes what the land may be used for and, also what it cannot be used for. Business use is generally restricted, as is signage, and any activity that may be regarded as a nuisance to the community. Buying a home in a homeowners association provides the purchaser with a degree of certainty as to the appearance and activities permitted within the community.
Enforcement of Standards
The homeowners association enforces the standards ensuring that the attractiveness of the community is maintained for the benefit of all owners. The standards are generally enforced by two committees of the association: the architectural control committee and the deed restriction committee. The architectural control committee ensures that all initial improvements to the lot meet or exceed the standards contained in the restrictions; the deed restriction enforcement committee ensures that residents within the community abide by the standards. Cities generally are not able to meet the aesthetic standards envisioned in the restrictions. Enforcement at grass roots level is far more effective. The result is that homes in well managed homeowners associations enjoy higher standards and, accordingly higher values than similar homes in neighborhoods that don't have associations.
Community Services
Homeowner associations use the collective buying power of the residents within the community to provide services more efficiently and generally at a lower cost than the individual could obtain. Trash removal is an example of a service that many associations provide more efficiently and at a lower cost. The association negotiates for trash removal throughout the community and can generally get enhanced services at a reduced cost. Some homeowner associations have successfully negotiated security patrol services, bulk cable TV services, alarm monitoring services, high speed Internet connectivity, landscape services and many more innovative services at significant discounts for the individual residents. Residents in homeowner associations receive more for their money than residents in communities without associations.
Community Facilities
Associations have a vast variety of different facilities for the use and enjoyment of the residents, facilities that many residents would not otherwise be able to access either conveniently or at all. The list of common facilities is extremely broad. Examples include walking paths, swimming pools, sports fields, parks, lakes, tennis courts, golf courses, aircraft landing strips, marinas, equestrian centers, community meeting and entertainment rooms, and many more. Several homeowner associations are built around specific themes such as golf courses, marinas, aircraft landing strips and equestrian centers; others have age restricted communities where one of the residents in each home must be at least 55 years of age; and some enjoy the privacy of access controlled entrances as their main purpose. Purchasers can select the association that most suits their individual lifestyle.
Maintenance of Common Areas and Facilities
The homeowners association is responsible for the maintenance of the common areas and facilities. In addition to property owned by the association and services provided by the association, the association generally maintains the right of way setbacks and medians along the public streets. This additional level of maintenance enhances the curb appeal and attractiveness of the community and as a result also adds value to homes within the community.
Protecting Investment
A home is probably the largest single investment made by an individual. The homeowners association protects this investment for the benefit of the individual by ensuring that the standards of the community are maintained. Even investors in residential real estate prefer to buy homes in an association for the protection that the association provides.
Although homeowner associations are a form of private zoning, the benefits of homeowner associations do not only apply to a city like Houston that has no zoning, but to communities throughout the USA. There are over 200,000 associations throughout the USA of which approximately 8,000 are in Houston. The phenomenon is nationwide - more new home are sold in homeowner associations throughout the USA, than in neighborhoods without associations. This is because home buyers see the benefits that homeowner associations provide.
