Documents That Rule Our Lives

Once you purchase your dream home, the contract used to exchange the property between you and the seller will most likely wind up in a cabinet drawer, long forgotten until you want to review it for the next sale or purchase in which you're involved. The multi-page file (usually about an inch or so thick) has a long-term effect, but not a daily influence on your life.

Homeowners association documents, however, rule our lives more than we may realize. The Community Associations Institute(CAI), serves nearly 16,000 associations nationwide (out of the 250,000 that are in existence) and is one of the premiere think-tanks on property ownership associations.

If you're interested in keeping up with these matters, an individual homeowner can join for just $95 – community association memberships start at $150, depending on the number of units in your association.

Community Associations' homeowner documents govern the lifestyles of nearly 55 million American residents, according to the CAI. Over the last 35 years, homeowners have evolved these government-like organizations to where they control many aspects of what you can and cannot do with your house – inside and outside.

While homeowner documents are not allowed to discriminate, they can control some aspect of who can live in a development – i.e., senior adult living facilities, no pets (except for assisted living animals) and for some, religious affiliation (retirement home for members of a particular faith, for instance).

These regulations have become an integral part of most local real estate contracts, as well. The regional contract for the metropolitan Washington, D.C. area has a couple of paragraphs that deal with the ordering, delivery and review of condo and homeowners documents for the purchaser. The laws in each state regulate when the documents must be provided to a purchaser, how much time the purchaser has to respond to them and how old the documents can be. Which can cause a timing quandary at times for home sellers and Realtors.

For instance, in Virginia, the HOA documents must be delivered to the purchaser as soon as possible (up to a few days before settlement – but that's not advisable). They cannot have been ordered more than 30 days prior to the purchaser's review, and the purchaser has 72 hours to review them and can actually pull out of a contract if they don't agree with what they see in the docs.

Buyers, though, have found a crack in an otherwise ironclad contract. While they may not be able to pull out of a contract because of financing, home inspection, defects or any other problem with the transaction, some have used an issue with the HOA documents as a means of nixing the contract: "I don't like the fact that I can't paint my front door red," or "I like working on my car in the driveway," or any other part of the regulatory language they don't like.

When the HOA documents are ordered, several things set in motion. The association staff (if you have any – it might be an independent management company) could send an inspector out to your house to see if the property adheres to the rules – if not, the seller could get a laundry list of to-do items to bring the property under compliance of the rules. The staff also checks to see if the homeowner is behind on association dues and could place a lien on the property to be paid before the transferring of the deed.

With this said – do you know what's in your HOA documents? Are you adhering to them? If you've repainted your house with different colors than when you moved in, are they the right colors? Do the colors even still exist in the paint world? How about that fence you installed – will the architectural review committee (ARC) approve it once you start the selling process? What? You didn't know you had an ARC?

Get to know your association board (they're usually your neighbors); keep up with what the rules are and what changes are coming down the pike – and review the docs to see if something could be changed to keep up with the times … No dogs? What's this world coming to?

Published: May 27, 2005