If you buy a home in a planned development, you’ll most likely automatically become a member of a homeowners’ association, known commonly as the "HOA." The HOA is a nonprofit corporation responsible for managing and maintaining the community.
As a member of the HOA, you agree to follow the terms and conditions set out in the HOA’s governing documents, including the Declaration of Covenants, Conditions, and Restrictions (CC&Rs), which are the rules of the neighborhood. The CC&Rs describe how you can use your property by setting out requirements, such as keeping your garage door closed except when entering and exiting the structure, and limitations, like not leaving your garbage cans at the curb unless it’s trash day.
If you don’t follow the CC&Rs to the letter, the HOA can impose fines and, if you don’t pay, sue you to collect the amount you owe. If they win and you still don’t pay, the HOA might record its judgment in the land records to place a lien on your home. The HOA can then foreclose the lien to satisfy their money judgment. (Depending on state law, an HOA can sometimes include fines in an assessments lien, which automatically attaches to the property. Other times, unpaid fines for CC&R violations don't automatically become a lien on your property.)
Typical CC&R Provisions
A community’s CC&Rs describe the requirements and restrictions on how homeowners use their properties. The CC&Rs often set standards for:
- How you maintain your home. For example, you might have to routinely mow your lawn and ensure that the paint doesn’t start to peel off the exterior of your house. (Some HOAs provide lawn care and home maintenance services, like exterior painting, while other HOAs expect homeowners to do these things themselves.)
- How you decorate your home. The CC&Rs might limit the color you can paint your house. Some HOAs limit homeowners’ color choices to various shades of brown or gray.
- The type and number of pets you can own. CC&Rs sometimes ban specific kinds of pets—like livestock or certain dog breeds—or limit the number of pets you can own.
- Where you park. CC&Rs sometimes prohibit vehicle parking on the streets and limit overnight guest parking.
- How you store your trash or other unsightly items. The CC&Rs might require that trash containers, utility meters, and clotheslines are enclosed or appropriately screened from view.
- Other requirements. The CC&Rs could restrict the height of your fence, require a defensible space for fire protection, or prohibit political signs, among other things.
If you violate any of these rules or any of the community’s other CC&Rs, the HOA might fine you (and then try to collect those fines from you), file a lawsuit against you in court, or, in some cases, foreclose.
For example, in one well-publicized case, a resident placed an American flag on his front porch violating the community's rules. The HOA then imposed fines, placed a lien on the homeowner's property, and foreclosure became imminent.
Be Sure to Read the CC&Rs Before You Buy
Talk to an Attorney If You're Facing an HOA Foreclosure
If you live in a planned community and are facing an HOA foreclosure, you might have some options for stopping the foreclosure. If you need help working out a resolution with the HOA or want to fight the foreclosure in court, consider talking to a foreclosure attorney who can advise you about what to do in your circumstances.