I have a question about HOAs and have been searching around but cannot find a similar situation to mine.
I purchased a single family fixer upper in CA that is in an HOA community. The homes are situated on at least 1 acre parcels and are very secluded. Many of the homes cannot even be seen from the road due to long, winding driveways, etc. I got a deal on it because it needs a lot of cosmetic repair and isn't the most functional house (the previous owners didn't live here, and for reasons I still don't understand, removed the kitchen and remodeled the bathrooms, but left showers, vanities and mirrors out (just new tile, paint, and a toilet in each bathroom. Weird, I know. Less demo work for me?) and the area is extremely desirable, so I went for it.
Anyway, the HOA is saying that not only do I need the typical exterior paint color approval and any sort of window shutter approval, etc, but there are HOA "fees" associated with improving one's property. For painting, I have to submit a request AND a fee! for my asking to paint my own house. Maybe they approve, maybe they do not. If no, I get to resubmit, pay another fee, and cross my fingers. Since they only go over these requests one day a month, this could really slow things down. The fees are also non-refundable.
Additionally, the color approval (and everything else, it seems) is scrutinized and decided by an "environmental control committee" and not the design committee. This environmental control committee is a one-man committee, run by an employee of the community and not a homeowner (most of the committee members here are homeowners and volunteer their time to be on the committee's).
Some of these fees to the HOA run well into the 5 figure range. For example, this house doesn't allow for water to drain away from the house, but rather runs toward it and pools up along exterior walls. I want to regrade the soil around the property so that it slopes away from the home, eliminating this issue. However, according to the HOA, regrading requires that I pay $20,000 to the HOA before I even start. That's more than it would cost to do the job!
Are these fees even legal? Can an HOA charge homeowners for making repairs and improvements to their home? Obviously, this really affects my bottom line as well as my budget. I have other properties in HOAs but this is the first I've come across something like this.
Thanks for reading!
Following with great interest.
I've dealt with strata councils for condos before and am familiar with some of the dumb things they'll try to do; this has pushed me away from HOA's for future investment as I see similar patterns / horrors like what's described here (ouch!)
Keen to see what folks with experience/expertise have to say.
The law does state that HOA's can charge fee's for the review of submitted plans which associate to the costs the HOA pays for architects or consultants to review the plans. Here is a link from Davis Sterling which provides the civil code. Click here.
In regards to the Environmental Control Committee, I would check in the Architectural Guidelines/CC&R's to see what it is exactly their purpose is as I have never heard of an ECC.
In regards to the regarding of the soil, I have seen the costs that the HOA incur in the 5 digit range (for large properties) because of the liabilities of it being done incorrectly where it ends up damaging a neighboring property. You can request the paperwork from the HOA as to what the fee's are for (i.e. consultant, testing, etc.) Unless you know what the HOA is required to pay for and it's costs, it does come across as expensive.
I am a Association Manager in Los Angeles and it really varies from HOA to HOA as to how strict they are in regards to enforcement, procedures and costs. Let me know if you have any additional questions.
Yes, HOA stuff can get crazy! We (the homeowners) just won a lawsuit against the builder for construction defects. We purchased a condo in that building back in 2005! That dragged on forever. I'm glad it's over. It can get very complicated and frustrating very quickly! But they seem to be hard to avoid, especially in my area.
Kinda stupid why they get fees to ramp up like that, seems like they are making a living out of it. Even the city doesn't have those kind of rules. LOL.
Thanks so much for posting that info. Very helpful and much appreciated. I will look further into the ECC and see exactly what it's about. I read an 8 page overview of what that committee does, but the overview was written in 1979 before any houses were constructed. And it's a bit off from how things actually ended up going.
I guess what I don't understand is that this guy is a salaried employee and the only board member of the ECC. So, he pockets the money he charges to come see if a paint color is ok? Seems kind of strange. Isn't that what he's salaried to do?
I can understand regrading to the extent where your neighbors are or could be affected. But then I wonder why I need to pull permits and hire a licensed and insured ____ to do the work. Isn't that all in case something goes wrong? Their insurance will cover their goof? Why the need for such a large "fee?" And what if nothing goes wrong? They just took 20k from me for fun?
My issue is just near my front door. The water pours off of the roof and pools near the exterior wall. And right onto the paver path to the front door. What I'd like to do is just get rid of a tiny slope between my circular drive and front entrance so that water runs away from the house instead of towards it. My closest neighbor is at least over and acre from this area, and across a street, and would not be affeted at all. Not like we get much rain lately here in CA anyway, but it's something that needs to be repaired so I don't keep fixing the same issues. Hopefully we'll get rain again! Soon!
Speaking of lack of rain, they also charge fees for any landscaping changes. And the ECC guy told me I cannot remove any trees without replacing it with another, because the community is an "urban forest." However, we are forced to lower our water useage by 40%, and that means we don't water lawns anymore and things are pretty crispy and unattractive. Plus our area is getting a lot of heat nationally for using too much water. I'd like to replace what exists for succulents and indigenous plants that use less water, but this fee! I can't afford it. I wonder if I can get around it somehow due to the current drought situation. Now because I have all of this crispy vegitation that I cannot water and cannot change out without hefty fees, I'm getting fined by the fire dept for being a fire hazard. We all are. Can't win, it seems...
Could the sloping be considered a construction defect? Or a repair vs new construction? I wonder if fees would not be applicable if you are fixing someone else's mistake vs grading for a new outbuilding or something. Just a thought.
Sorry for so many questions. I have a weird feeling about this situation. Especially because when I point things out to other committee members, they are completely unaware of the situation. Maybe this guy is just making up all of these rules and no one questions them or even knows? And he's a stickler to the point of it being nonsensical. Like the drought issues, for example.
There's always something with real estate! I used to get so flustered when I'd hit a road block and now I just nod when something happens. There's always going to be several snags along the way. I truly hope I can work something out with the HOA, though. I don't like having to run all of my stuff by random strangers. It really pours salt in the wound to have to pay for unwanted advice!
Thanks again for all of your help and interest!
I agree completely. Just in principle, it's wrong to deter homeowners from improving or keeping up their properties by imposing big fees to do so. Improvements will add value to the community and not just the home that's being repaired/improved.
And, yes, I don't want to accuse anyone of wrongdoing before I find out more, but I have a feeling something shady might be going on with the fees and this committee of one...
When I was restoring homes in my hometown of Minneapolis the city was cool with drawings on napkins and the permit fees were reasonable. Now I have to pay thousands and hire architects, and there's endless back and forth with gripes about the plans, and to be hit with fees by the HOA is just too much on top of everything else.
update: the ECC is Seemingly another term for a for an archtictural committee. Here, the same employee of our community runs the ECC as well as an archtictural committee. So he approves or denies all architectural plans or anything that would affect the exterior of your home, including landscaping. I cannot plant anything other than annuals without getting consent. I'm not sure why 2 separate committes are needed, nor do I understand why we have a design committee if the resident architect guy is bogarting all aesthetic changes from architectural drawings to landscaping to paint colors. What is left for the design committee?
Lesson learned: read up - all of it - and ask questions about HOA rules - before buying. Of course they all have rules and regulations, but talk to neighbors about how strict they are. I do have other HOA properties, but they don't really enforce many of the CC&Rs. Here, it's very steict and by the letter. In fact, someone approached me on Sunday trying to petition to keep the chickens she's had on her property for many years. The HOA now wants to take them away. She has 4 acres and just a handful of chickens. No roosters. I'm getting the idea that mr ECC is a bit power hungry. There will be a seat available on the committee in a few months and I'm going to try to become a member. 👍
This literally makes me sick... the fact that this can take place and have any justification is truly terrible. This should be met with nothing but shock and outrage. If anyone has ready Terry Goodkind's "The Faith and the Fallen" then all this "approval by X committee before going to Y committee, then Z committee, then pay a fee to each of them and wait a month" thing is eerily similar...
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Join the Largest Real Estate Investing Community
Basic membership is free, forever.