By: Julia M. Wei, Esq.
Home prices being what they are here in the Palo Alto area, many first time homebuyers opt to purchase a townhouse or condominium. When they do so, they receive a thick stack of documents, including the disclosures and the HOA docs.
Reviewing the HOA packet can be intimidating, and I have advised many purchasers who are too time-crunched to review the CC&Rs and offer some of the most frequent issues to watch for in the Codes, Covenants and Restrictions (CC&R's) in this article linked below:
Some CC&R's can really restrict your lifestye. Avid bicyclist? Perhaps you have several bikes and were planning to park them with your car in the garage. Some CC&R’s restrict the amount and types of storage permitted in the garage.
Also, if you are trying to obtain financing for purchasing into an HOA, there may be loan requirements on owner-occupancy in the HOA. Living in a group environments means relinquishing some rights, and buyers may be unaware to what degree. One horror story involved a homeowner who replaced his lawn with eco-friendly, water saving synthetic grass but was forced to remove it after the HOA Board got involved.
Further, if you find yourself in the position where you must actually litigate an HOA dispute, my colleague Henry Chuang offers the following insights:
"As a matter of law, HOAs are required to have an internal dispute resolution procedure which a homeowner can initiate to resolve disputes that have arisen. This basically means that in the HOA handbook that homeowners receive when they purchase their house, there should be a section on managing disputes with the HOA. If the HOA has established a dispute resolution procedure, then the homeowner must utilize it before proceeding further. It is important to note that if the homeowner asks the HOA to participate under this process, the HOA must comply. However, if the HOA requests the homeowner to participate, the homeowner can choose not to attend."