Homeowners associations and covenants and restrictions
Another Ask the Agent question. I got an email recently from someone who wondered why so many neighborhoods in the Charleston South Carolina real estate market have homeowners associations and covenants and restrictions.
The bottom line. If you don't like the rules of a neighborhood, that neighborhood is likely not one that you should choose to purchase in. The best way to protect and preserve the investment in your property is with a well run homeowners association that enforces the covenants and restrictions governing the neighborhood.
The explanation. A homeowners association is usually formed to maintain the common areas of the neighborhood including the entrance, streets, ponds, play parks, swimming pools and other community amenities. Depending on the number of and quality of the amenities offered to the residents of the neighborhood, the fee will vary.
In many neighborhoods, there is an architectural review board (ARB) that restricts changes you might like to make to your property. If you want to add an addition, build a fence or even how you might like to landscape in some cases, it must be approved by the ARB. I don't think I've ever heard of any reasonable changes denied but for example, if the neighborhood has white picket fences no taller than 6 feet throughout and you want to put up an 8 foot wooden privacy fence, you aren't going to get approval. If your neighborhood requires all homes to be a minimum of 2000 square feet, you aren't going to be able to build a home of only 1800 square feet. If the exterior of all the houses in the neighborhood are cement plank, you won't be able to build a home with brick or vinyl siding. If you want to change the color of your home, it must meet board approval. Simple enough.
Sometimes, the residents of the neighborhood manage their community and other times, professional management is hired to take care of the neighborhood. The larger communities are more likely to retain professional management.
The purpose is to protect, preserve and enhance the property owner's asset, the home. Most people's biggest asset is their home and they have a large financial investment and significant personal stake in maintaining property values in their neighborhood. While some people may not care, it is more likely that most homeowners do care that their neighborhood looks good, remains attractive and increases in value over the long term. For those who don't care or don't like rules, they probably should not move into a neighborhood that has covenants and restrictions to property use. Nice homes are available in neighborhoods without homeowners associations and covenants and restrictions.
If you really like a home but are unsure about the covenants and restrictions of the neighborhood, it is very common to make the sale contingent upon a review of the covenants and restrictions by the buyer in a timely manner. By the way, an excuse such as "but I didn't know about it" is not valid after you move into the neighborhood to avoid abiding by the rules. Disclosure of the neighborhood association, the annual fees and any restrictions to property use is included in the listing, the sellers disclosure and at the closing. You sign off that you understand and agree to abide before purchasing.
I hope this has helped and thanks for the great question.