The Housechick Blog

There are some people who absolutely do not want to live in an area with an HOA - a Homeowner’s Association.  While the intended effect of an HOA is to preserve property values, some folks feel restricted by the rules and regulations that go along with an HOA.

In the Tucson MLS, there’s a searchable field where I can find homes without a listed HOA fee.  While information there is deemed reliable but not guaranteed, you should always investigate to find out if no HOA really exists.

Also, many properties have deed restrictions.  Deed restrictions can limit the usage of a property, but are not a formal HOA.  When the property was originally built, or a subdivision originally created, the developer can record restrictions against the deed: hence the name, deed restrictions.

If you really want to know what you can or can’t do with a property, you’ve got to examine the deed and any restrictions that may be recorded against the property.  A common example of deed restrictions without an HOA would be something like not parking a boat in the front yard.

It’s a common misconception, that having no stated HOA means you can do anything you want with a property.  It just ain’t so.  You’ve got to check for deed restrictions.

Yesterday, I got a call from a resident of North Ranch, a subdivision in Northwestern Tucson.  She was interviewing a couple of local Tucson real estate agents, trying to put some information together for the North Ranch homeowner association board meeting.  I am not privy to all the details, but it sounds like the community is thinking about changing the color scheme.  I gather that they want to increase their resale value and “get homes selling” in the area.

North Ranch is off of Thornydale, north of Linda Vista.  There’s about 700 homes in the subdivision, and most were built in the early 1990s.  The average house is about 1900 square feet, and sits on about a 0.1 acre lot.  Typical turnaround on these houses is about 3.25 years, and the average sales price over the last 6 months is $244,565, with a median of $219,000.  

A defining characteristic of the neighborhood is the color of the houses.  In fact, the resident I talked to has heard it called the “pepto bismol” neighborhood.  In fact, the resident I talked to related a specific incident where someone chose to live in a different neighborhood just because of the pink houses.  From what I gather in our conversation, the association picked colors in the past that faded badly.  I don’t think it’s that bad, really. 

It’s good to hear that the association is trying to address the colors of the houses.  It’s a very nice area up there, and having a little change of colors of the exteriors would help to make the subdivision a little more personalized, more custom.

So does pink really matter?  I think so, especially if you’re the one pink house in a sea of earth tones.  If every house is pink, well, maybe it matters less.  However, there is so much inventory right now that buyers can afford to be extra picky.  Maybe pink is a deciding factor after all.

There have been 20 houses sold in North Ranch over the past 6 months.  There are 25 houses on the market right now.  That means there’s over a 6 month supply of houses in North Ranch.  I’m sure there are 25 anxious home sellers in North Ranch, but it’s going to take some time for all of that inventory to sell, pink house or not.

So you’ve found the perfect home and are ready to write an offer.  Fabulous!

Is there a Homeowner’s Association that governs the property?  If so, we’ll have to add a little bit more documentation to our offer.

The HOA/Planned Community Addendum helps a Buyer and Seller negotiate terms and costs that may occur when buying or selling a house with an HOA.  Using this addendum, we’ll spell out who pays for what, what the expected fees will be, and who will be providing the required HOA information to the Buyer.

Let’s take this one item at a time.

First, the addendum discusses costs.

• The regular association dues amount is specified, and in what interval those dues are paid.  This lets the Buyer and Seller acknowledge and disclose what those fees are currently.
• If there are any additional HOA fees, those fees are specified here.  Again, to disclose and acknowledge any fees, so that the Buyer and Seller are on the same page.
• If there are any HOA assessments that are a lien on the property, this form indicates who will pay for that: if the Seller will pay off those liens in full or if the Buyer will prorate and assume those liens.  Typically, the Seller will pay off their own liens (debts), but in some communities, there are large assessment liens on each property to pay for major improvements.  In this case, the Buyer may elect to prorate and assume the lien.
• If there is a fee to transfer the HOA records into the new owner’s name, then this document specifies who will pay that fee, the Buyer or the Seller.  This fee ranges widely, from $50 to $300 and beyond.

Next, the HOA addendum discusses who will provide the HOA information to the Buyer, and defines what information the Buyer must receive, by law.

• If the HOA has less than 50 units, then the Seller is responsible for providing the HOA information, which we’ll list below.
• If the HOA has 50 units or more, then the Seller must tell the HOA to provide the proper information to the Buyer, and the HOA is obligated to provide the information.

By law, the Buyer must receive:

• Copy of the bylaws and rules
• Copy of the CC&R’s (Covenants, Conditions, and Restrictions)
• Dated Statement containing:
• principal contact information for the association
• amount of regular dues and any other assessments or fees
• what portion of the unit is covered by association insurance, if any
• total amount of money held as reserves by the association
• case names and numbers for any pending litigation
• If provided by Seller, a statement saying whether the Seller has any information regarding violations of the rules for their unit
• If provided by the HOA manager, a statement saying whether the records of the HOA show any violations of the HOA rules for that unit.
• Copy of the current operating budget
• Copy of the most recent annual financial report
• Copy of the most recent reserve study, if any
• and a statement that the Buyer has acknowledged and received that information, with a place for the Buyer to sign.

Every home and HOA is different.  For more specific information regarding a home you like, or the association it sits in, just send me an email and we’ll get some answers.

Homeowner Associations.

People either love ‘em or hate ‘em.

Either way, Homeowners Associations are fairly common among Tucson Real Estate, especially in newer home communities.

HOAs are intended to promote the value of a community by enforcing rules, called CC&Rs (Covenants, Conditions, and Restrictions).  The HOA, or Association, may be governed by a volunteer homeowner group, or the homeowners may elect to hire an  association management company.

Membership in the HOA is typically mandatory.  There are a few HOAs that are voluntary, where the community has come together to create an association and has not enforced the rules upon everyone in the neighborhood.  But, by and large, if there is an HOA in the neighborhood, all homeowners are members and will be charged an Association Fee.

An Association Fee is paid by each homeowner to help enforce the rules and to pay for community amenities.  These fees are typically due monthly or quarterly, and can range from $20 per month to several hundred dollars per month, depending on what the Association Fee covers.

The Association, or HOA Fee may go towards:

• fire protection
• trash collection
• common area maintenance and insurance
• pool and spa area maintenance
• neighborhood streets
• exercise facility maintenance
• common area utilities
• grounds keeping
• exterior insurance

An HOA may also vote to create a Special Assessment for each homeowner.  Special HOA Assessments are typically created for long term, high cost improvements, such as repaving the roads, installing lighting, or repainting all buildings.  Special HOA assessments are usually paid at the same frequency of the normal HOA Association Fee.  The HOA Board will typically space out the payments so that the increase won’t create a financial burden on the homeowner.  Over time, the small payments from all homeowners add up so that the HOA Board can conduct large scale repairs, or updates.

HOAs are usually created by the developer of a new community.  The developer records a set of restrictions against the property that limit the rights of the homeowner.  These limitations can vary widely.  It is very important when buying real estate in Tucson that you review these CC&Rs and deed restrictions.

Common Limitations may include:

• Number of pets allowed
• Whether parking is allowed in the driveway overnight
• Whether the garage door may be left open
• Board approval for painting the house a different color
• Approval for landscaping both front and back yards
• Approval for installing a pool, flagpole, or other signs
• Approval for making changes to the yard or house that may be visible from neighboring property
• Whether RV parking is allowed and for how long
• Whether rentals are allowed

Here’s a few examples of local Tucson Community Homeowner Associations:

Shadow Hills, in North Tucson

Tucson Mountain Association, in Western Tucson

Civano, in Southeast Tucson

Sabino Springs, in Northeast Tucson

Midvale Park, in Southwestern Tucson

HOAs are a fact for Tucson Real Estate, especially for newer homes.  Whether you like having an HOA or not, it is important to understand them.  Watch for more information about buying a home in Tucson with an HOA, and the legal documentation requirements for Buying or Selling a Home in an HOA in Tucson.