Home & Garden: Know Your HOA Fees and Rules

Sandra Gurvis

Maureen (not her real name) was thrilled when she purchased her Downtown condo. It had all the right amenities, including a rooftop pool; a small, well-equipped weight room; and underground parking. She thought she did due diligence when she checked with her Realtor to make sure that she could bring along Bilbo, her 70-pound English sheepdog, a gentle giant who knows no strangers.

The Realtor assured her that she was allowed two pets, either of the canine or feline variety. A few weeks after Maureen moved in, however, she received a letter from the condo’s homeowners’ association. The weight limit on animals was 50 pounds, so unless poor Bilbo went on the keto diet, he would have to be rehomed.

Heather (also not a real name) has lived in her condo for 12 years. For the first 11, the builder ran the homeowners’ association as it struggled through the recession. But when the Columbus real estate market perked up and all units were sold, dues and other maintenance responsibilities were handed over to a professional property management company several states away.

Six months after the transition, Heather received a letter from the company saying she owed several hundred dollars in back condo fees. Unable to contact the company by phone, she sent an email trying to resolve the situation. A few weeks later, she received a threatening letter from a collection lawyer, along with the addition of several hefty fees. When she spoke to the president of her condo’s HOA, he knew nothing about the arrears.

Know the Rules

While tales abound of HOAs forbidding the display of American flags and use of service animals—both of which they legally cannot do—Maureen’s and Heather’s experiences are fairly common. HOAs wield a great amount of power, from setting monthly fees to implementing very particular (and sometimes peculiar) restrictions on landscaping, barbecue grills, patio décor and holiday decorations. Associations also can implement huge assessments for external repairs and maintenance, as well as put liens on homes and even foreclose the mortgages of homeowners who don’t meet their financial obligations.

Nonetheless, HOAs don’t have to be scary if condo or planned community buyers do their due diligence. “There are two buckets, financial and practical” to consider, says attorney Jeffrey Kaman of Kaman & Cusimano. He is president of the Central Ohio Chapter of the Community Associations Institute, an international organization that works with association board members, community managers, management firms and related professionals.

“With the financial, you need to think about fees in general,” says Kaman. “What do [HOA fees] include? Two units may offer the same amenities and even have the same fee structure, but if one includes water and trash [expenses that are covered], that’s a big savings.”

Also, potential buyers should ask how big the association’s reserve fund is, he says. “As communities age, they will need major maintenance and repair. Maintenance-free living is not free.” Unless there’s a well-managed reserve account and budget, homeowners may be hit with dreaded “special assessments,” which may mean having to come up with $10,000 for a new roof or to keep a pool up to code.

“You’re actually buying a percentage of the building, including the exterior, clubhouse and tennis courts,” says Kaman. So while a new community may not initially have maintenance expenses, they will likely occur down the road.

On the practical side, you need to make sure you understand the rules, Kaman adds. As Maureen found out, all dogs are not created equal. There may be other contingencies, such as not allowing you to rent out the condo or even restricting whether and how long friends or family may stay.

Before buying, “get a copy of HOA bylaws as far in advance as possible,” recommends Joe Peffer of Delicious Real Estate, a boutique firm specializing in Downtown properties. “As dry as they may be, read them thoroughly so you can go into the purchase with your eyes wide open.” A Realtor can obtain the HOA bylaws and financial information for a potential buyer even before seeing the property.

“A $500-a-month condo fee is worth $100,000 in mortgage,” Peffer continues. Despite all the attractive amenities you may get in a new high-rise condo, you can likely get more square footage for your money if you purchase a single home.

Still, living in a planned community—whether it’s a high-rise or a neighborhood with a homeowners’ association involved—has a lot of perks. These may include the fact that someone else is mowing the lawn, shoveling the snow or fixing the gutters. Such benefits may be some of the reasons that planned communities areon the rise.

“According to the MLS, 36 percent of all sales in Franklin County have an HOA,” says Peffer. The CAI’s Foundation for Community Association Research states that some 69 million Americans live in community associations—about one in five, with the vast majority being positive or neutral about the fairness of rules and belief that the association protects and enhances property values.

Still, a 2015 survey by the Coalition for Community Housing Policy in the Public Interest found that two-thirds of residents in community associations have been involved in significant disputes, with some 60 percent of those disputes remaining unresolved. Of those involved in legal disputes, over 60 percent have filed complaints with a federal or state agency.

It’s definitely in the owner’s best interest to be familiar with Ohio laws designed to protect homeowners and community organizations. “In most cases, good communication and the democratic process are sufficient to resolve problems with a community association,” writes attorney Christopher R. Moore on the Homeowners Protection Bureau website. What you don’t want to do: go into the situation angry or upset, giving the impression that you are somehow being singled out or persecuted.

Being confrontational might further escalate the conflict, possibly resulting in legal action. Thus, with the help of a mediation lawyer, Heather contacted the management company to get the original builder’s bookkeeping records, as Ohio law requires them to share. While she didn’t agree with all the charges, she came to a resolution with the management company and worked out a payment plan.

Arbitration is another alternative means of clearing a dispute, although both parties must agree to the arbitrator’s findings. The court of last resort is, literally, court. In Ohio that means filing a lawsuit in the county court of common pleas or, if the amount due is less than $6,000, in small claims court.

Photo by (c)2019 Thinkstock

Attend Meetings

“Attendance at member meetings, voting and simply speaking with board members often goes a long way toward resolving disputes that might otherwise seem implacable,” continues Moore of Homeowners Protection Bureau. “Ohio law requires HOAs to hold owner meetings at least once per year, and special meetings can be called by the president, the board or a majority of owners. Members can voice concerns over how the board is enforcing association rules or performing obligations, and the board and homeowners can work cooperatively toward solutions. Overzealous board members or officers can be removed democratically. When necessary, members can amend the declaration by [a] 75-percent vote.”

Maureen pled Bilbo’s case before the board, and members amended the 50-pound dog rule to include board-approved exceptions, no doubt influenced by Bilbo’s friendly and amusing appearance during the HOA meeting.

Sandy Meisel, who resides in a planned community in Blacklick, found himself elected president of the neighborhood’s newly minted association. “It’s just like the Army,” he half-jokes. “You raise your hand to ask a question, and before you know it you’ve volunteered.”

“We’ve had some issues with nonpayment of dues and violations of bylaws and have made every attempt to reach out to the homeowners,” says Meisel. Occasionally, HOA officials have been ignored or sidestepped. He and others who have worked on local HOA boards have found it tricky, time-consuming and, in certain cases, thankless and heartbreaking. “It’s unsettling to see someone possibly lose their home over unpaid dues when it might have been resolved through less drastic means,” adds Meisel.

No matter how you look at the situation—whether or not to live in a community that has association fees—the grass may be greener on the other side. But in a planned community, everyone is responsible for the lawn.

1. Community governance can be murky. The HOA board of directors is made up of owners who volunteer and are elected by the community, the property management companies who take care of the business and the service providers they hire, including lawn-care companies and roofers. “A …board creates and enforces the organization’s Covenants, Conditions & Restrictions, or CC&Rs, a document that dictates homeowner actions,” explains Miranda Morely at smallbusiness.chron.com. And while “the board is also responsible for all aspects of condo management … they often hire management companies to perform day-to-day operations.” So if you want to stop your dues from being raised or change what seems like an onerous rule, watch for notification of HOA meetings and attend them so you can make your voice heard.

2. Before buying, obtain a copy of an HOA’s reserve study. Kaman recommends potential buyers review a reserve study, which is a projection of how much is needed to pay for future deterioration and repairs of a building. Reserve studies are usually prepared by outside consultants and while the final figure is only a recommendation, according to some financial experts, the reserve should be funded by at least 70 percent. For example, the HOA should have $700,000 on hand if the reserve is estimated to be $1 million.

3. Play nice but keep records and know the rules. Before buying, make sure you understand the HOA’s rules, even if you have to get outside help for clarification. Also, keep written records of every interaction—dates and conversations as well as correspondence and emails. But complying with the bylaws or asking the board for an exception—or apologizing if you have inadvertently broken the rules—are the best courses of action.

4. Pay your dues but be aware of hidden fees. “No matter what you’re arguing about, make your monthly payments and pay any late charges that have been levied,” writes real estate blogger Teresa Mears on USNews.com. “Otherwise, the amount due can escalate once the board starts adding attorney fees. If it turns out you were overcharged, you can ask for a refund later.”

5. Sometimes there will be add-on fees, such as an elevator repair or other one-time maintenance. While Realtors can get information on HOA CC&Rs, “you may have to call the management company or the HOA treasurer to get a rundown of what the numbers actually mean,” advises Peffer. In more exclusive areas—such as neighborhoods within the New Albany Communities or retirement communities in Florida and Arizona—you might need to pay two HOA fees: one for your neighborhood and a second one for the greater community. Before buying, be sure you understand all fees involved.

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