How to Handle Living in a Community With a HOA

Filed under: Buying, How To, Renting

apostol_8/GettyCondos and many newer communities require paying dues and following the Homeowners Association’s rules.

By Teresa Mears

If you buy a condominium, townhouse or single-family home in a newer development, you’re likely to become a member of a community association.

About 20 percent of Americans live in a community governed by a condo association, homeowners association or co-op board, according to the Community Associations Institute, which educates volunteer board members and association management professionals. The number of communities covered by associations has grown from about 10,000 in 1970 to more than 333,000 today.

Community associations come with rules that determine everything from the number of pets you can own to what color you can paint your front door. Some include amenities such as pools, clubhouses and golf courses, while others provide services such as road maintenance and streetlights.

The associations are set up by developers and then turned over to a volunteer board of homeowners once all the units in the development are sold. Those volunteers are responsible for making sure facilities are maintained, collecting maintenance dues and enforcing the rules.

“This is the ultimate form of democracy,” says Frank Rathbun, vice president of communications for the CAI.

While stories of homeowners associations that deny permission for a disabled child’s playhouse or won’t allow veterans to fly flags on the wrong kind of pole may steal the headlines, CAI statistics show that 64 percent of residents are satisfied with their community association experience and 26 percent are neutral, with only 10 percent dissatisfied, according to a 2014 survey.

But the same survey shows that almost a quarter of residents have experienced a significant disagreement with their association, with landscaping and parking being the two most common causes, followed by finances and architectural issues.

Whether you like or hate the rules that come with community association life, once you’ve bought or rented in an association, you’re committed to it. Being a member of an association ties your fate to your neighbors in ways that living in a traditional neighborhood does not.

“You have to overcome that ‘my home is my castle’ issue,” Rathbun says.

Rules are designed in part to protect property values, and 70 percent of the respondents in the CAI survey believe they do, while 26 percent believe they make no difference. Disagreements over which rules are required to protect property values often lead to conflicts that can cost residents both time and money if they’re handled poorly.

“People ought to know that being in a condo is a give-and-take kind of thing,” says Patrick Hohman, author of “Condos Townhomes and Home Owner Associations: How to Make Your Investment Safer” and a longtime volunteer board member who is now a part-time, on-site manager at a condominium near Louisville, Kentucky. He also runs an educational website called www.CondoHOAinfo.com.

“It’s a nonstop process of building trust and maintaining trust,” Hohman says. “You learn to be forgiving of others and forgiving of yourself. You deal with people where they are and as they are. It’s kind of like dealing with your extended family at Thanksgiving.”

One challenge for associations is that volunteer board members with no property management experience are charged with maintaining hundreds of thousands of dollars’ worth of property. About two-thirds of associations hire professional managers, but the rest are managed by the residents themselves.

“Board members are almost never trained in property management,” says Richard Thompson, who publishes The Regenesis Report, a weekly newsletter for board members and developers. He also writes a syndicated column for Realty Times and just published the book “Trade HOA Stress for Success.” He recommends professional management — hiring trained and experienced property managers to oversee operations — for most associations. “If the board hires competent people, they’re going to stay ahead of the curve and not put fires out,” he says.

Communities are dependent upon the skills and personalities that residents and board members bring to the table. Some people are better than others at working with their neighbors, and residents with poor people skills can create problems for everyone, especially if they are elected to the board.

Experts say that communication and transparency — being very clear about where the money goes, welcoming residents at board meetings and sharing information about how decisions are made — go a long way toward building community harmony.

“There is no substitution for communication between the association and the residents,” Rathbun says.

Here are seven tips for getting along in a homeowners association.

1. Know the rules before you move in.

Too few prospective residents understand the rules before they buy or rent. It’s particularly important to be able to live with policies on pets, parking, rentals, noise and architectural guidelines. “Folks buy into a homeowner association without any clue of what they’re obligated to do,” Thompson says. “Few prospective buyers research these things before they close the deal.”

2. Follow proper procedures.

Boards should set up clear procedures for everything from getting permission to paint your front door to rental applications to installing a satellite dish, and homeowners should expect to follow those procedures.

3. Go to your neighbor before you go to the board.

The board is there to make sure the rules and regulations of the development are followed, but if your neighbor’s loud music annoys you, talk to your neighbor first before taking your complaint to the HOA board.

4. If you don’t like a rule, get your neighbors together to change it.

Changing circumstances may make some rules outmoded, and boards should review the rules every few years to make sure they’re all serving the community. If you don’t like a rule, talk to your neighbors and petition the board collectively for a change.

5. Volunteer to help your community.

It’s not always evident from the outside exactly what work the board of directors is doing and what issues the community faces. Once you move in, volunteer to help with a project or serve on a committee, and expect to serve on the board at some point. “Get involved. Don’t wait until you’re dissatisfied about something,” Rathbun says.

6. Try to stay out of court.

Every community has a few people who think the rules don’t apply to them, and some would rather fight than comply. A court battle can be costly, both in money and in emotional turmoil within the community. “Win, lose or draw, we are still talking about neighbors who have this bigger wall between them,” Thompson says. Adds Rathbun: “Be reasonable: That applies to both the homeowners and the volunteer homeowners who serve on the board.”

7. Have a long-range plan. State laws regarding reserves and planning vary, but it always makes sense to plan for items you know will have to be replaced or repaired, such as roads, roofs and pools. If the community has no reserves and no plan, a roof leak at a condominium complex could mean a surprise assessment of thousands of dollars for each homeowner. “If the board had been collecting money and planning for this … every member along the timeline would have been paying some portion,” Thompson says.

 

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Mortgage Rates Rise, but Predictions Remain Steady

Filed under: Buying, Financing, Refinancing

ZillowThe weekly mortgage rate chart illustrates the average 30-year fixed interest rate in six-hour intervals.

By Lauren Braun

Mortgage rates for 30-year fixed loans rose this week, with the rate borrowers were quoted on Zillow Mortgages at 3.61 percent on Tuesday, up 8 basis points from the same time last week. On Thursday morning, the national rate was at 3.71%.

However, the long-predicted rise in mortgage rates still appears to be on hold. After a report that economic growth slowed during the winter, the Federal Reserve signaled Wednesday it will not raise its benchmark interest rate in the near future.

According to Zillow Mortgages, the 30-year fixed mortgage rate rose early in the week, then hovered around 3.60 percent before rising to 3.61 percent Tuesday.

“Rates were essentially flat last week, remaining in the range they have been in for the past month,” said Erin Lantz, vice president of mortgages at Zillow.

Additionally, the 15-year fixed mortgage rate was 2.84 percent, and the rate for 5/1 ARMs also was 2.84 percent.

Check Zillow Mortgages for rate trends and up-to-the-minute mortgage rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.

A look at the broader mortgage rate trend for the past six months:

 

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Griffith, Banderas Divorce Puts 1925 LA Estate on Market

Filed under: Buying, Celebrity Homes, Selling

ZillowThe 15,000-square-foot Italian Revival home features seven bedrooms and classic old-world styling on 1.5 acres.

By Melissa Allison

Melanie Griffith and Antonio Banderas, who announced last year that they were getting divorced, have listed their longtime Los Angeles home.

Charles Sykes/Invision/APGriffith and Banderas in 2013

The home is listed for $16.1 million and sits on 1.5 acres, the Wall Street Journal first reported.

The centerpiece of the property is a 15,110-square-foot Italian Revival-style home at the end of a long, stone driveway. Built in1925, its grand scale includes a two-story kitchen, a two-story banquet hall, a formal dining room with coffered ceilings, a recording studio and stone fireplaces.

The listing agent is Brett Lawyer of Hilton & Hyland.

 

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California’s Hot 5: The Fastest-Moving Housing Markets

Filed under: Buying, Economy, Selling

Gustav Dejert/Getty

Be prepared for a race to the finish if you’re looking to buy in California these days.

As they did in the Gold Rush of 1849, Americans are racing westward in 2015. Trulia’s Housing Economist Ralph McLaughlin noted that five of the 10 fastest-moving real estate markets this year are located in the Golden State, while sales have slowed in such eastern states as New York, Tennessee, and South Carolina.

It looks like 2015 is seeing its next Gold Rush, but this time, it’s with homes — and they’re selling incredibly fast. In fact, less than 30% of homes for sale in three San Francisco Bay Area metros remained on the market after two months.

Why are people racing to buy in California? Well, each one of the cities on this list has its own charm. Let’s see what you can buy in the Golden State’s hottest markets.

1. San Francisco

You almost have to ask what the City by the Bay doesn’t have. Great food, great sights like the Golden Gate Bridge and Park, and lots of business opportunities. And with the average home selling for more than $1 million, the real estate market in San Francisco is just as fast-paced as its tech innovations.

So what can you get for $549,000 (roughly the midpoint of the median)? You could vie for this one-bedroom, one-bathroom condo in the Castro or this teeny, tiny 678-square-foot home in Mission Terrace. Either way, come prepared to battle it out with dozens of other buyers.

2. San Jose

Tech companies and their employees clearly know the way to San Jose, nicknamed the “Capital of Silicon Valley.” The third-largest city in California, San Jose reached the 1 million population milestone last year and shows no signs of slowing.

This is home to the headquarters of a number of huge tech companies (Cisco Systems, Adobe Systems, PayPal, eBay, and so many more) and buyers are scooping up newly built condos, roomy Victorian single-family homes, and everything in between. If you can pony up the median asking price of $800,000, you can look forward to harvesting lemons from the mature fruit trees and hosting some epic barbecues in the backyard of this 1960s ranch-style home.

3. Oakland

Across the bay from San Francisco lies Oakland, a city with a rough reputation — Anna Bloom of the New York Times described growing up there as “a mix of growth, grit, and crime.”

But things are changing as newcomers and businesses are beginning to take advantage of Oakland’s proximity to San Francisco, according to Fortune magazine. With homes half the price of those across the bay, more buyers could afford this tidily renovated Montclair cottage (listed at $599,000).

4. San Diego

Almost any native of this city will give you the following advice: “Get a California burrito and carne asada fries. You’ll thank me later.” San Diego can boast the Gaslamp Quarter, beautiful Coronado Island, Comic-Con International — and the fact that it was home to Will Ferrell’s “Anchorman” movies.

Earlier this year, San Diego was ranked the second-most-expensive city to buy a house in, making it a seller’s market. (And buyers are digging it.) Live the dream in this cozy 560-square-foot Mission Beach cottage. It’ll cost you, though — it’s listed at $559,000, well within the average for this sunny city.

5. Orange County

Widely known as “The OC” (even off TV), Los Angeles’ suburban neighbor is experiencing a big economic upswing. Last month, The Orange County Register’s Jonathan Lansner reported that local businesses are booming and the amount of money spent on cars is at a seven-year high.

Orange County is home to such affluent beach communities as Newport Beach and Laguna Beach, as well as Disneyland over in Anaheim. Chapman University and the University of California at Irvine also call The OC home. All those California vibes don’t come cheap — if you want to soak up the coastal views in a cliffside home like this one, be prepared to fork over a cool $18 million.

 

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Inside Tommy Hilfiger’s $75 Million Manhattan Penthouse

Filed under: News, Buying, Celebrity Homes

Zillow

Tommy Hilfiger took three years to renovate his two-story, 6,000-square-foot penthouse at New York’s famed Plaza Hotel. It is taking him about as long to sell it. The American fashion tycoon has dropped the price of the four-bedroom duplex to $75 million, the Real Deal reported.

Hilfiger listed the penthouse in 2013 for $80 million just before he married his second wife, Dee Ocleppo. Before another round of renovations, Hilfiger once had it on the market for $50 million, according to Curbed. Hilfiger purchased the classic unit and a neighboring unit for $25 million in 2008 when it was marketed as a “fixer-upper,” reported AOL Real Estate.

Hilfiger says he likes that this residence is in an iconic building on Fifth Avenue, overlooking Central Park. “I always wanted to acquire trophy real estate because location, location, location is very important. As an investment you can’t do better than that,” he says in a CNNMoney video.

The condo, on the 18th and 19th floors, has views of Central Park and Fifth Avenue from a private terrace. The Plaza is a fully staffed 24-hour white-glove condominium with a separate entrance from the hotel, according to the listing. Residents are offered the full complement of hotel services, including maid, valet and Todd English room service.

“Only the most luxurious finishes and materials were used to restore this property to its original grandeur, complete with 21st Century conveniences,” according to the listing.

A round, domed room in a turret contains a custom mural paying homage to Eloise, a character from Kay Thompson’s 1950s books about a girl who lives in the “room on the tippy-top floor” of the Plaza Hotel.

“If you surround yourself with things you love, it makes for a great home design,” Hilfiger told CNN.

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