A lot of times people buy a house in an HOA with no idea of exactly what it means. I know, because I did it myself…here are some things you might not be aware of:
1) YES, THEY CAN TAKE YOUR HOUSE – The obligation to pay your assessments is as legally binding as your mortgage and you CAN lose your house if you don’t pay them.
2) YES, THEY CAN COME ON TO YOUR PROPERTY – Most governing documents (CC&Rs) give the Association the right to enter onto your property (with notice) to cure certain violations if they are a public nuisance or to maintain the exterior of the unit. The Association may charge the costs of any clean-up or repairs to that unit.
3) YES, YOU HAVE TO GET APPROVAL FOR THAT – Most documents include a process for approval for any changes to your property that can be seen from the street (this includes items added to your backyard such as gazebos, sheds, etc.).
4) YES, YOUR ASSESSMENTS CAN GO UP – The Board of Directors decides every year whether or not to increase assessments based on their opinion of the financial health of the Association. They should be seeking and following the advice of professionals, i.e., their manager, accountant, and reserve study specialist.
5) YES, YOU CAN CANCEL YOUR SALES CONTRACT – Home buyers should receive a copy of the documents well in advance of the closing date of the purchase. Nevada law provides that prospective buyers have 5 days from receipt of the documents to cancel the deal without penalty. Read the governing documents – YOU MIGHT NOT AGREE WITH THEM!
