BENEFITS HOMEOWNERS ASSOCIATIONS PROVIDE

There are several important benefits to living in a development governed by a homeowners association. The most significant is the proven track record homeowners associations have in maintaining (and often enhancing) property values. Developments with homeowners associations better protect property values because the associations provide some critical benefits to residents that they normally would not be able to obtain on their own. First, the association provides greater certainty that the community will remain physically attractive over time by imposing, and privately enforcing through fines and assessments, rules on architecture, landscaping, accessory buildings, fences, signs, and related matters. Residents don’t have to worry that a neighbor will park a 30-foot RV, boat, or commercial vehicle in their driveway for months at a time, or that a neighboring home will be painted orange with lime green trim, or that the landscaping will be allowed to die. Second, associations often provide recreational amenities for residents – such as tennis courts, swimming pools, and “community rooms” – that many residents would not be able to afford on their own. Third, the association provides a variety of services to residents, including maintaining common areas and managing the development’s recreational facilities. Finally, many homeowners associations offer residents a heightened sense of personal safety and security because the development is a “gated” community that restricts access to community residents and their guests and invitees (such as repair or delivery services). More than eight million Americans now live in over 20,000 such gated communities, and these numbers are growing. Some observers estimate that eight out of ten new residential developments in urban centers are gated.

 

DRAWBACKS OF HOMEOWNERS ASSOCIATIONS

The principal drawbacks of homeowners associations result from the very same factor that allows associations to provide significant benefits: the homeowners ceding control over several aspects of use of their property to the homeowners association.3 While this is not dissimilar conceptually to the reciprocal benefits and burdens associated with zoning – I’m restricted in what I can do, but so is my neighbor – since the potential benefits derived from a homeowners association are greater, so are the potential burdens. The first broad concern is the requirement of mandatory membership in an association that provides few, if any, protections for those whose views differ from that of the majority of residents. Since the association is empowered to impose both financial burdens (through assessments) and restrictions on personal autonomy (through policies, rules, and regulations) the majority wields significant power to affect the lives of all residents. It can be bad enough to have to abide by decisions with which you disagree, but in homeowners associations, you may also be faced with the obligation of having to pay for them. Residents who strongly disagree with association decisions may be left with little recourse other than to consider the drastic step of moving. But in many parts of the country this may not even be a realistic option because such a large percentage of housing developments are governed by homeowners associations. The second broad concern is the degree to which association rules govern the use and enjoyment of one’s own property. This concern is amplified by the unfortunate fact that many prospective home purchasers are woefully uninformed about the degree to which the use of their home will be constrained by association rules and regulations. Absent mandatory disclosure requirements, it is in the self-interest of the developer – or seller and broker – to emphasize the potential benefits of the association, while minimizing the potential burdens. All too often, it is only after the fact that residents learn, to their distress, that they have bought a home in a development where a group of their neighbors will have veto power over such formerly personal decisions as: the number and size of pets allowed in the home; the color of the house; the right to fly the American flag or display a political sign; the freedom to allow relatives or friends to live in one’s house for an extended period; the right to build a tree house or install a solar collector …and on and on. The third broad concern, which can affect even residents who agree with association polices, rules, and regulations, is the potential for their heavy handed or arbitrary administration by the association’s governing body. 

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