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Buying Into an HOA, Part 1

First Time Home Buyer, Homeowners Association (HOA) Law, and Real Estate Law by Simon Offord, Esq.

Buying a new home can be an overwhelming process. The amount of paperwork is staggering. When buying property that is part of a homeowners’ association (HOA), the paper work is increased due to a statutorily mandated set of additional disclosures regarding the HOA (Civil Code Sections 1365 – 1368 and 1375).  In this blog series, I will discuss some of the more important issues to look out for in the HOA disclosures.

One of the vital elements of the HOA disclosures is the Covenants, Conditions, and Restrictions, commonly known as CC&Rs. The CC&Rs contain the rules that govern the HOA, and some of the things you might find the in CC&Rs could impact your decision to buy the property.

Some of the most common and noteworthy restrictions in the CC&Rs deal with improvements to individual units. This issue is typically of great importance to our clients. Almost every set of CC&Rs discusses architectural restrictions in some fashion.

Architectural restrictions are important in CC&Rs for several reasons. For one, many CC&Rs have common areas that are not individually owned by any one owner, but are instead owned by the HOA membership as a whole. If there were no architectural restrictions, there would be a risk that an individual owner could do improvements that impacted the common areas. For instance, in a high rise condo, if a homeowner wanted to make electrical changes in the walls, they would likely have to access and potentially alter the common area.  This is because the owner of a condo typically only owns everything from the paint of their interior walls inwards, and the walls and space between the units are actually common areas owned by the HOA as a whole.

Architectural restrictions in CC&Rs can be as minimal as stating something along the lines of “homeowner is not to take any action to impact the common areas or other owner’s units.”  However, in large complexes it is common for the CC&Rs to require owners submit plans to an architectural committee for approval before doing any work.  The architectural committee will then typically have a set number of days to approve or deny the application, have a hearing to discuss the changes, request revisions, etc.

The CC&Rs may also have specific prohibition against certain types of architectural changes.  For instance, a very common restriction is that units in a multistory complex are not allowed to have hardwood flooring. Alternatively, the CC&Rs may require specific types or ratings of padding under the hardwood, or only allow certain percentages of hardwood floor coverage. These types of restrictions are intended to prevent noise transmission to the units below, so if you are intending to buy a unit in an HOA and want hardwood floors, it is critical you determine if you are even allowed to install them, and if so, at what cost.

As most HOAs have some form of architectural restriction, it is critical for a buyer to learn this before closing escrow, especially if you have plans to undertake remodeling.  Rarely are the CC&Rs for two HOAs the same (unless the same law firm prepared them), so no matter how experienced you think you may be in buying into an HOA, you still need to carefully review the CC&Rs.

Brewer Offord & Pedersen LLP review and advise on CC&Rs and HOA issues regularly, and are here to help.  If you have any questions about this issue, or any real estate legal issues, please contact us at (650) 327-2900, or on the web at www.BrewerFirm.com. 

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