Skip to content

News

How an HOA Works When Buying an Orange County Home

neighborhoods-lakehouse

If you’ve only lived in an apartment or owned an older home, you may be unfamiliar with the term HOA when you buy an Orange County home. The term is an acronym for home owners association. Because an HOA is part of any condominium complex or almost every new housing development, understanding and knowing how to take advantage of it is an essential part of owning a residence.

An HOA is a corporation that is established by a housing developer to manage homes and community property in a subdivision. Once the homes are sold, the developer transfers ownership of the HOA, as well as all legal and financial responsibility for the corporation, to the residents. You become a member of the HOA when you buy a home. 

The HOA is the neighborhood’s management — in charge of the maintenance, insurance, external home appearance, and other issues that affect all the residents in the community. They enforce their responsibilities through the CC&Rs, or covenants, conditions, and restrictions. You receive an official copy of the CC&Rs when you assume ownership of your home. CC&Rs differ from development to development but may contain everything from community pool hours, paint colors allowed on home exteriors and parking prohibitions.

The money to finance the tenets set out in the CC&Rs come from assessments, also known as HOA fees or dues that you usually pay monthly. This money covers expenses that affect the community as a whole, such as the maintenance of subdivision roads and the community center, landscaping in front of each home, newsletter distribution, fees for an HOA lawyer, and hiring an HOA manager. Note that HOA dues are privately administered and have nothing to do with property taxes or other government fees. Violating the CC&Rs may result in penalties ranging from loss of privileges, such as the use of a facility, to fines.

The people responsible for developing the CC&Rs are  homeowners like you. All residents participate by voting for board members who directly take care of HOA issues. Again, this is not a government entity but a private concern. However, California does provide several checks and balances so that HOA boards do not abuse their powers. For example, the state mandates that only 5 percent of HOA members may demand a rule change that is then subject to a majority vote by the residents.

When buying a home, find out what the HOA dues are because they will affect your monthly budget. Before finalizing your purchase, ask to see a copy of the CC&Rs. Peruse it so you know the difference in responsibilities between you and the HOA. Make sure that you can live with the rules.

For example, if you’ve always wanted to build a pottery workshop in your backyard, confirm that the CC&Rs allow it or you may never get it built. Keep in mind that the members of the HOA, such as yourself, are ultimately responsible for developing the rules and regulations, so you have the power to change anything you don’t like if you go through the proper voting channels. You can also run to become a board number at elections, which, by law, must be held via secret ballot.

If you’re interested in finding out more about HOAs or would like to tour one of our developments, please contact us.

 Back