How To Understand California HOA Rules

Thinking of buying a condominium apartment or a home in a California HOA neighborhood? Learn how to understand California HOA rules.

What is a Homeowners Association?

A Homeowners Association (HOA) is a corporation enforcing rules in condominiums, restricted neighborhoods, and planned communities. It consists of a board of directors from community members who keep the building or community of homes in pristine condition.

HOA dues are collected from each community member to pay for common areas maintenance and repairs, within written community standards.

Planned communities use an HOA to maintain the structures, common areas, amenities, and social areas. The purpose of an HOA is to enforce cleanliness and architectural standards. Established rules and regulations require compliance with penalties of hefty fines if violated.

In essence, property owners are restricted from doing whatever they please inside and outside of their homes.

How Did HOAs Get Established?

In the first half of the 20th century planned community developers included common areas for all homeowners to enjoy. While starting slowly HOAs didn’t become popular until after World War II due to overcrowding in large cities. Homeowners sought better options outside of city centers.

Not until suburbs sprang up in the 1960s did planned communities gain public popularity. However, once planned communities started up some neighbors didn’t maintain the common areas as others expected.

Thus, private homeowners associations were created to keep neighborhoods orderly.

How To Understand California HOA Rules

Let’ explore HOA rules in California. These include how an HOA operates, what are its governing documents, and California laws.

 

How Do HOAs Operate?

An HOA board of directors is elected by the community members. The board oversees the HOA rules and regulations.

While most HOAs boards consist of elected community members some hire off-site property management companies to govern the HOA.

Each HOA board conducts meetings and votes on proposed amendments to its rules. The board hires staff or outside services to maintain and repair the common areas. They follow standards accounting practices to maintain books and records of all income and expenditures.

What are HOA Governing Documents?

Like a corporate board of directors, the HOA has governing documents outlining the rules of the community often called the Covenants, Conditions, and Restrictions (CC&Rs). The CC&Rs are filed with the county recorder’s office by the developer.

In addition, the board may enact other rules on how the community functions called Bylaws. Every owner must follow the written CC&Rs and Bylaws.

Examples of the types of rules contained in the CC&Rs and Bylaws include:

• Architectural controls;
• Home maintenance standards;
• Color of the homes;
• Pet size and quantity limits;
• Proper pool etiquette;
• Designated storage and parking spaces for each home;
• Trash and recycling rules; and
• Short-term rental restrictions.

What California Laws Govern HOAs?

Only two California laws affect HOAs:

HOAs are established as California corporations requiring a board of directors to operate the association.

The Davis-Sterling Common Interest Development Act (2014) giving associations a legal framework to govern themselves. The act set forth the responsibilities of an HOA board as follows:

• Collecting members fees and assessments for repairs and capital expenditures;
• Managing association finances;
• Paying association bills;
• Preparing budgets;
• Handling disputes; and
• Efficiently running the association.

HOA Benefits

Many homeowners like living within an HOA. They enjoy the orderliness of the neighborhood or community. They like the HOA preserving the aesthetics of the community.

Normally, the HOA takes care of chores like mowing the lawns, trimming the bushes, and snow removal. These provide convenience to the owners.

Community amenities maintained by someone else make it easier for owners to enjoy them.

If a neighbor breaks the rules or causes a disturbance the owner can complain to the association. The board can discipline the rule-breaking neighbor.

Finally, communities kept up to high-quality standards and kept in pristine conditions lead to increase resale values. According to a June 2021 report, the Community Associations Institute (CAI) claimed that 94% of HOA residents nationwide “said that the HOA rules protected and enhanced property values”.

What Are HOA Fees?

The board collects homeowners’ HOA fees monthly or annually. These fees pay for common areas maintenance, repairs, and upkeep. The HOA oversees all common areas like:

• Entrances, hallways, stairs, and elevators in each building;
• Parking lot;
• Lawns and landscaping;
• Clubhouse; and
• Pools, tennis courts, gym, social areas, meeting rooms, game rooms, and laundry rooms.

The HOA fees also compensate the board members for their time and pay all staff and service providers.

HOAs also keep reserve funds for emergency repairs and future projects. In addition, the board may assess homeowners a special fee to pay for a new roof for all structures or to cover expenses the reserve funds can’t.

All fees are managed by the board who are responsible for the funds.

Are HOA Fees Tax Deductible?

No, they are not tax-deductible when used as a residence. Yet, if the homeowner rents the unit to another family, then HOA fees are deductible as a business expense during the rental period.

Penalties for Non-Payment of HOA Fees

HOA fees are required from all homeowners. The written CC&Rs and Bylaws explain the additional fees imposed when a homeowner fails to pay fees on time.

Also, the association can file a lien on an owner’s property to enforce the payment of dues and penalties. The lien can lead to a civil lawsuit against the property and the owner seeking a court order requiring payment.

Can an HOA Evict a Homeowner?

If the governing documents allow, an HOA can evict a homeowner for failing to pay dues and other fees.

Are Owners Violating the CC&Rs Subject to Police Enforcement?

No, because violating the HOA and its CC&Rs are civil matters, not criminal ones. As such, an owner may appeal a hefty fine or an order to stop acting in a certain way to a civil court.

Can an HOA Dissolve?

Yes, HOAs can dissolve. Normally, depending on the CC&Rs, a majority vote of the members can terminate the HOA.

However, terminating an HOA creates a vacuum where owners can act any way they want. Also, who pays for the maintenance, repairs, and upkeep of the common areas?

GOT QUESTIONS?

HOA Disadvantages

 

Some people hate the idea of living in a closed community where a board of directors tells them what to do with their homes.

Sometimes only the “busybodies” want to become board members when no other member wants the job. Favoritism is another complaint when the board grants exceptions to the rules for their friends or family. Nepotism by hiring family members to the staff or contracting outside services.

Others complain about the political environment that boards operate under. During times of personal conflicts, disagreements, and political intrigue many complain about their board acting like a “junta” wielding excessive power.

 

What are Your Rights Living in an HOA Community?

 

The above examples of poor HOA management can lead to helpless owners feeling they have no rights. However, the HOA board is not above the law. State laws keep HOAs in check.

For instance, the federal government and California prohibit discrimination. Read this blog post about “California Fair Housing Laws”.

Likewise, the HOA board can’t fine owners unless they violate the specific written governing documents.

 

Make Wise Decisions about an HOA before Buying

 

Before committing yourself to buy a condominium unit or a home in a planned community or HOA neighborhood in California, read the CC&Rs and other governing documents.

Sellers by law must give you a copy of the CC&Rs and governing documents. Before you sign a purchase and sale agreement, read the documents, and consult with a real estate attorney about the legal terms.

Contact us to consult with one of our experienced Realtors at Big Block Realty.

Learn more about the condominium building or the planned community or another HOA neighborhood. Maybe another HOA property better fits your lifestyle and needs?

 

How To Understand California HOA Rules – Conclusion

 

You just learned how to understand California HOA rules. Answers to typical questions include:

• A homeowners association (HOA) is a corporation enforcing rules in condominiums, restricted neighborhoods, and planned communities;
• HOAs got established in the first half of the 20th century and became popular in the 1960s;
• HOAs operate as a corporation with a board of directors;
• The HOA governing documents include CC&Rs and Bylaws;
• HOA benefits include shared community amenities maintained by the board of directors making it easier for owners to enjoy;
• HOA fees are not tax-deductible unless the home is rented as a business expense;
• Failure to pay HOA fees results in penalties including a lien on the home;
• An HOA can evict a homeowner for failing to pay dues and fees if the CC&Rs allow;
• Violating the CC&Rs is not a crime, only a civil matter;
• An HOA can dissolve depending on the CC&Rs; and
• HOA disadvantages include loss of freedom to do what you want with your home and living with a political or petty board of directors.

Make Wise Decisions about an HOA before Buying

 

While our post here explains the basics about HOAs, it’s best to sit down with a Realtor experienced with HOAs.

Contact us to learn more about HOAs and to find one that fits your lifestyle and needs in the greater San Diego area.

 

 

Steven Rich, MBA – Guest Blogger

 

 

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