Real estate Q&A: Pros & cons of HOAs
YOUR JOURNEY HOME
Free Press Real Estate Columnist
Q: Our family moved into a GJ neighborhood about seven years ago realizing there was an HOA and covenants. Over the years, we have observed violations of the covenants. Sometimes things seem to get corrected and other incidents seem to persist. If this stuff keeps happening, what is the worth of having covenants?
A: Unfortunately, as a Realtor I hear both sides of covenant complaints. I want to speak to your question, but first let’s take a very quick look at the other side of the issue.
Sometimes I hear, “I want to sell my house and move out of this neighborhood because of the darn covenants.” One of the provisions in a home purchase contract is that the buyer be provided with any homeowners association (HOA) documents, including the covenants. So, people are provided the opportunity to know the rules on their way into homeownership. As a matter of fact, if there is anything in those covenants a prospective buyer does not like, they can cancel their purchase contract with full and unquestioned return of their earnest money.
To address your question, it seems people may not pay attention to covenants as long as they do not have issues. However lifestyles, habits and the economy all change. For one thing, families acquire “big boy and big girl toys” like boats, RVs and other large items which, if not screened from the street, is a violation of covenants in many Grand Valley neighborhoods. Some other common violations include offenses like letting front yard grass or weeds get out of control, erecting ham radio antennas, covering large items that can be seen from the street with the ubiquitous blue tarp, storing an excessive number of vehicles within public view, or conducting a home business in a way that both violates the covenants and annoys the immediate neighbors.
When there is an HOA, issues or possible violations first need to be brought to the attention of the board and any management company the association may contract with. To follow the by-laws of many HOAs, a complaint, usually by another neighbor, is best presented in writing with time/date stamped photos to document the issue or grievance. A letter to the property owner from the HOA is oftentimes all that is required to end the bothersome activity.
Many HOAs send that first letter with a time frame with which they want compliance. Mediation needs to be the name of the game in how an HOA deals with covenant issues so meeting with the property owner is a good second step.
If these and subsequent steps by the HOA board do not get compliance, the HOA may have a system to levy financial fines on a property owner; and, to assess penalty charges on top of that if the issue is not resolved and the fine is not paid.
Here’s the rub: There is no way for the HOA to force compliance or payment of fines. If, after accumulation of enough fines and penalties, an HOA decides to take legal action some have been known to take their issue to small claims court. From my experience, if the HOA prevails in court, a judgment may be issued for payment of what is owed to the HOA but the association is still stuck having to collect on the judgment.
A follow-up step some HOAs apply is to file and record a lien against the property for monies owed. However, that remedy only comes into play when a property is sold.
You can see getting compliance with covenants can be a long and laborious process. Much like renters who skip out on paying rent knowing how to game the system, people who want to violate covenants seem often to know there is much they can get away with.
It has been my experience that compliance with covenants is a matter of keeping honest people honest and it often seems to be an ongoing vexation for HOAs dealing with those who are not.
Doug Van Etten is a local Realtor with Keller Williams Colorado West Realty. He has been helping home buyers and sellers as well as real estate investors meet their needs and goals for more than 20 years. Read his articles and other postings at Van Etten’s blog http://www.GJRealEstateAdvice.com
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