In Chester County and the surrounding areas, there are more and more developments being built with a Homeowner’s Association (or HOA’s).  The definition, according to Wikipedia (found here) is as follows:

The legal entity created by a real estate developer for the purpose of developing, managing and selling a community of homes. It is given the authority to enforce the covenants, conditions, and restrictions (CC&Rs) and to manage the common amenities of the development.

These associations all add to the yearly cost of living in your home.  I myself live in a “planned community”, as these are sometimes referred too.  The builder usually decides what amenities (pool, tennis courts, common areas) they are going to include in the cost of these developments and gives the buyer a breakdown of what the costs will include.  Whether it’s a condominium or single family home complex, buyers are given documents which break down the the costs and gives the buyer a chance to review all the details about the community.  These documents are extremely important and not something you should take lightly when reading through them.  Of course, the total cost per year is important, but even more important (I believe) is what are the restrictions.  Some associations have very minor requirements, i.e. they mow the common areas and there are no real restrictions on what you can do on your property.  That’s right, they can restrict what you can do ON your property.  They have the power, through the CC & R documents, to restrict things such as door colors, mulch colors, whether you can have clothes lines (one of my wife’s concessions when we bought), too where your trash can should be when it’s not trash day.  If you have a utility truck of some kind, you better make sure you can park it in your driveway (you may not).  That car you had “wrapped” for your business, you may want to be sure it’s in the garage (closed), or whether you should have it.

There’s another very important reason for reading these documents and making sure you are comfortable with the restrictions, they’re part of your deed.  That’s right, when you sign all those documents on settlement day the documents you should have read, become part of your deed.  You are agreeing to abide by all the rules in those documents.  It’s like buying a car.  You know when you drive off the lot, you can’t speed, or you’ll get a ticket.  In a HOA, you could be fined if you do not abide by the rules of the association.  These are quasi-governments that work under municipal and state restricted laws.  The board of directors can make decisions on certain matters (i.e. special assessments) for the good of the community without a community vote.  These decisions are typically written into the association by-laws that should describe their restrictions.

I am not trying to deter you from buying into these communities, but I am trying to make you aware that if and when you do, you should really know what you’re buying.  Every day, people walk into new construction without representation.  While the agents at these sites are very nice, when they hand you these documents to review, it is my belief that they don’t always make you fully aware how important these documents can be.  In PA, you have 5 days to review these documents.  If there is something there that you don’t agree with or can’t abide by, you have the option to get out of the deal.  If you have an agent (and the documents are delivered to them), it’s 5 days from then, not when you (Mr & Mrs Buyer) first see them.  Remember too, that listing agent is working for the builder, but that’s for a different post, another day, about Agency.

Bottom line:  Know what you’re getting when you buy into a planned community.  Read the documents and if you need help in interpreting them, ask your favorite Realtor®.  If you’d like help finding your next home, whether it’s in a planned community or not, feel free to contact me.  I’m happy to help.

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