Understanding the CC&Rs When Buying a Home in a HOA Community

The Details You Should Know

If you’re buying a home in a HOA community there are a lot of rules and regulations along with rewards and responsibilities. When I say there are a lot of terms and abbreviations we use in the Real Estate industry, this is why. The HOA has CC&R’s in the CIC… An HOA is a homeowners association and the CC&Rs are the condition, covenants and restrictions. and is a legally binding document. The CIC is a common interest community, in other words the amenities and other things like gates.

The CC&Rs are the regulations that the HOA community abides by and are very important to understand. When living in a home or condominium that is restricted by CC&Rs, an owner gives up certain freedoms in order to be part of a shared community. For example, most condominium building associations have some amenities, parking and noise level rules, aesthetic guidelines for paint color, height restrictions, and minimum and maximum square footage requirements. Sometimes buyers can get access to the CC&Rs before making an offer, but in most cases, buyers get a complete list of CC&Rs and community restrictions promptly after signing the initial Purchase and Sale Agreement.

The HOA usually enforces the CC&Rs and might penalize you if you violate them.

Violations

If you violate the CC&Rs, potential penalties might include:

  • fines
  • suspension of your privileges to use the common facilities, like a community gym
  • forced compliance (the HOA might go on your property, fix the issue, and bill you for it), or
  • the HOA might file a lawsuit against you.

Homeowners living in HOA communities usually must pay monthly or annual dues and occasional special assessments. The CC&Rs describe the types of fees the community requires, how special assessments work, and the penalties for nonpayment, such as late charges and interest.

If you fall behind in dues the HOA can normally get a lien on your home. This kind of lien usually automatically attaches to your property, typically as of the date the fees or assessments became due. Having an HOA lien on your property could lead to a foreclosure. 

Living In Your CIC

There are many upsides to living with CC&Rs in a HOA community and between property values rising and the shared amenities it’s always a strong choice for a buyer who is looking for a beautiful picture perfect neighborhood. In the process the buyer will have to review and sign a document that will breakdown all Frequently Asked Questions about living in a Common Interest Community or an HOA community. Along with this document and reviewing the CC&Rs before a purchase the buyer will be fully aware of all rules and forecasts for the HOA before going forward. A buyer generally has 5 days to cancel any purchase agreement without any penalties if they don’t like the rules. 

Your Rights

You do have certain rights regarding your Common Interest Community and according to Pursuant to provisions of chapter 116 of Nevada Revised Statutes, you have the right: 

(a) To be notified of all meetings of the association and its executive board, except in cases of emergency. 

(b) To attend and speak at all meetings of the association and its executive board, except in some cases where the executive board is authorized to meet in closed, executive session. 

(c) To request a special meeting of the association upon petition of at least 10 percent of the homeowners. 

(d) To inspect, examine, photocopy and audit financial and other records of the association. 

(e) To be notified of all changes in the community’s rules and regulations and other actions by the association or board that affect you. 

Summary

  • CC&Rs are a legally binding document that regulates what you, as a property owner, can and cannot do with your property.
  • CC&Rs are enforced by the homeowners association (HOA).
  • All properties in the community must abide by the area’s CC&Rs. When buying a property in an HOA community, you will have to sign a document stating that you have read the CC&Rs and agree to abide by them.
  • CC&Rs define how properties can be used and maintained in the community. HOAs might also put in place rules and regulations regarding pets, vehicle parking, running businesses from the property, and social gatherings.
  • Failing to abide by the CC&Rs might result in verbal or written warnings, penalties, and even a lawsuit.

If you have any questions about living in a HOA community, reach out to our CONTACT page today!

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