BiggerPockets

Hi, and Oh boy, did you come to the right place!

I for one would never purchase a property in a HOA. Many reasons, but generally rules are made without much thought as to how reasonable they might be for all owners. You need to first understand that what you do effects the marketability of your property. Too many restrictions people will shy away, not enough and you may lose the exclusiveness of the project and the intrinsic values you desire. What you end up with in any HOA is the sidewalk cop, the owner that takes it upon himself to enforce the rules. These people are usually uninformed as to legal aspects of real estate and are unfamiliar with ownership rights, easements and other issues that may be in contradiction with an HOA rule, as they see it.
I suggest you get an attorney, a real estate attorney first of all. You need to be very careful how you word your rules.

For example saying the garage door shall be closed at all times unless entering or exiting with a vehicle....means you can never clean out your garage, never be able to paint some flower pots in your garage and lif the door so you don't drop dead. How far will the sidewalk cop take it? How do you return the trash cart if you're at work? I've seen rules state that trash carts shall be immediately after trash pickup. Maybe they should have considered returning the carts by 9:00 pm.
If I were to consider an HOA property (which is not the same necessarily as a gated community) I'd want to see a remedy available to owners for harrasement by the sidewalk cops, because every HOA has one.
As a group, you might think no one would ever take it upon themeelves to address issues with neighbors.....trust me, there will be a few and they will, in the end, cause trouble.
Limiting fence heights may restrict meeting code for a hot tub in a back yard. Don't complicate things by duplicating current municipal ordinances, like barking dogs, yard lights shinning in another neighbor's windows, basketball goals in the driveway (one thing I really don't want to listen to at night...or anytime for that matter, is a bouncing basketball).
Others will have much more I'm sure, but get an attorney early on before you set anything in stone that may haunt you later and require a majority vote to change or modify. What you are about to do is not a good idea without a good real estate attorney (and not one that is an owner!). Good luck, Bill

Good rule would be... self dissolution...

Because in my experience, they have draconian rules,they cost money even if you don't use the services provided. (Common ground club houses, swimming pools, holiday parties, etc). There are laws that are governed by municipalities, I don't need HOA to force additional restriction on me or my tenant such as: Cannot park cars overnight in my own driveway for instance and other nonsense.

I own one property in HOA community and I vowed never again.

If the HOA is ONLY to run the sewer plant, why have any rules at all? If you have rules beyond the sewer plant, then you must have something more in mind than just the sewer. You can easily structure it so that its only purpose is to operate the sewer plant.

Like others, I would never buy in an HOA. I've lived in areas, Houston, specifically, where HOAs were all-powerful since there was no planning and zoning commission. I've seen them run amuck. Their rule seems to be "The HOA has absolute and total control of your property. We can tell you what you can do to your property. We can tell you who can live there. We can bill you at any time for any amount and if you don't pay we will place a lien on your property."

Even if that's not what you intend, think about the situation where an entirely new group of people takes over the HOA (that will happen, eventually) and DOES have that in their mind. Can your rules be interpreted to give them that degree of control

Associations always change over time. Once in a while nobody really cares, and association just fades away. More often, there is gradual changeover from reasonable HOA management to little dictators who have too much time and want too much control over their neighbors. These folks like HOAs because they can exercise power over their neighbors.

I grew up in a tiny town in rural MO. We had a saying "small town politics are so bitter because the stakes are so small." That's how I see HOAs.

IMHO, the fundamental problem with HOAs is that you don't fully own your property. The HOA is always a partial owner and always has some ability to control your property. While I am tempted by the cheap condo prices in Florida right now, this single issue keeps me from seriously considering buying one.

Thank you Jon and Matt. We did discuss some of the issues mentioned above. We don't want to make the association so "rule trodden", that people won't purchase and build here, that the group agreed upon. However, we do realize that there needs to be a minimal set of criteria to begin with, so we are addressing: Trash cans being out of sight during the week (and we need to address having them put away by say 9:00 p.m. as suggested), landscaping, what types of projects require Architectural Committee approvals (permitted projects only or assembled items versus constructed items), screen doors, fines (penalties for non-compliance) etc...This forum is giving me some great advise, keep it up folks, and as always, thanks in advance.

lol mari....getting hoa tips here is like getting diet tips at krispy kreme....

i am all for HOA. unfortunately, many people don't have a pride of ownership in their homes and could care less what it looks like from the street. i think there are people that want nothing to do with HOA communities (as u see here) and its absolutely thier choice to not live there....seeing that your question is asking about rules for the HOA (and not whehter you should have one or not), i will focus on that.

definitely, definitely, DEFINITELY seek counsel and get a lawyer that specializes in HOA and realestate. my current HOA is in a bitter lawsuit regarding our validity and it appears that when the transfer occured from the builder to the community there was a snafu. each state has laws that hoa's must follow and you don't wanna just 'wing it'. our lawyer told us to cease opertaions right now until after our may 20 court date.....sounds optimistic! lol

another great rule for the board is to FOLLOW THE RULES. don't let anyone get away without following the rules because then those that you do enforce can claim that you were selective and and discriminatory.

my community does not have a clubhouse, pool, gate, etc. our dues area whopping $60 a YEAR because of this. we keep up some common ground (basically the grass around our entrance) and basically make sure that nobody parks on the grass, parks commercial vehicles, parks trailers/boats, keeps their lawn cut, keeps trash out of their yard, fences must be approved (of which we've never said no), etc.
we do not have a community color pallette that people must choose from for paint colors or certain mailboxes that they must have.

be reasonable when you make the rules. regarding the trashcan rule, we say ours must be taken up the same day the trash was picked up. we understand people work late.

Hi Jackie and Josh, thanks for the responses. I like the 75% rule and will suggest it, we did discuss as a point of later topic the ability to enforce the rules and change them later if need be, but hadn't come up with a criteria as yet. Josh, I love the "Krispy Kreme" reference, and I knew that, but I figured the folks here would be more than willing to share their nightmares and from those, I'd be able to develop a listing of possible issues we need to address. Your community sounds a lot like ours, our dues is $126.00 a month, but we've only gotten 20 homes built of a possible development of 179 so far, so we're in the beginning of developing the rules for the HOA. We do have a CC&R in place, but very few specifics are defined, so the membership felt we needed to address more issues. Thanks again for the suggestions all, please keep them coming. TIA...Mari

Mari, it sounds to me like you new homeowners in this development have undertaken quite a task. I'm going to give you a different aspect to consider. As a potential buyer I am going to ask questions that come to my mind if I were interested in purchasing in your development. Many of these questions would most likely be posed to the developer or the salesman who is promoting your development. As a potential buyer I would need to know these answers before I could go into Rules and Restrictions.
1 Who is currently in charge of the HOA?
2 What do the HOA dues cover?
3 Is there a current Budget in place? Is there a reserve fund?
4 Who currently runs the HOA - financially? who is collecting your monthly dues? who is paying the expenses? Is the developer carrying the expenses on the unsold lots until they are sold?
4 Customarily if a new development is established as an HOA it is done so by the developer/builder/sponsor prior to construction and has a set of basic rules already in place.
5 Do you each have a Master Deed filed on this property where each owner has a certain percentage interest and receives a Unit Deed?
6 If dues are $126 a month, is that $126 a month for each owner? Is this based on lot size and are all lots identical?
7 If your developer set up this HOA and he/she has a plan to construct ___ units total, 20 of which have been constructed so far, who is collecting these dues and who is in charge of distributing these dues to expenses of the property? i.e. is the developer contributing his monthly dues on the remaining unsold lots? I guess once you are able to tell us what expenses your $126 goes to each month now, we have a better understanding of how your HOA operates or is planned to operate.
8 Normally the developer turns over certain seats on the Board of an HOA subject to the sale of a certain number of lots.
9 Rules such as mentioned about decision making requiring 75% of membership/owners etc. are normally established when the HOA is set up. Those rules are later amended by homeowners such as yourself after a majority of units/lots are sold.

I guess what I'm trying to get at is there has to be a "bible" or established set of rules/guidelines in place already to a degree prepared by your developer and filed with a State agency to allow the collection of the monthly dues. From a purchaser's perspective, we are first looking at what we need to pay each month if we buy here (what we get for $126 a month) and then ascertain the rules that we must abide by.

Good morning Ingrid and Steve, and thank you for the great input. The HOA here runs like any other, we have a management company who oversees the finances of the HOA, we have a Board and an Architectural Committee, and the basic CC&R's are in place. The issue of trying to define standards for the community came about when the membership expressed a concern that the CC&R's didn't really define a whole lot, the members asked questions about "How long can the trash cans remain on the street?", "Where do they need to be stored when not being emptied?", things of that nature, so the membership decided to have a meeting, with the Board and address the concerns by addressing the questions and attempting to come up with some answers. The $126.00 HOA fee is for all owners at this time, and is used at this time to run the pocket sewer plant (a requirement in California for developments of over 5 homes where there is no city sewer), and for the upkeep of the common areas (basically the areas between the street and sidewalks and the area outside the development on the street). There is a budget and a reserve which is holding it's own right now, but because the fee is so low and the cost to run the pocket sewer plant is high, but the developer has stated that he prefers not to raise the fees at this time, but it is anticipated that as more homes are built and come on-line to the PSP then the fees may go up, but quite frankly this area cannot support much more in the way of a fee (low income area other than a Marine Corps base and school district and your basic fast food establishments, there's not much in the way of employment). The first set of owners (those of us who were first to build in 2008) are just hoping the 175 homes comes to fruition.

instead of raising the fees the developer should be carrying some of those costs for the sewer plant or get those other houses built so they can get them sold.