Investigate before you associate

By Cortney Casey
C & G Staff Writer

Homeowners associations can provide perks, but know the policies first

After living in her parents’ Grosse Pointe City farmhouse for nearly two decades, Isabelle Donnelly was ready to trade freedom for convenience.

For Donnelly, the prospect of never having to mow the lawn, paint the siding or shovel the snow outweighed the exterior décor restrictions and other association-established rules that came with the Harrison Township condominium she bought in 2006.

“I had 18 years where I could do whatever I wanted, and I loved it,” she said, “(but) I don’t mind paying that sacrifice for where I’m at in my life.”

Associations, implemented to maintain the character of a neighborhood, can be a blessing or a burden, depending on the buyer’s attitude, said Kelly Sweeney, president and CEO of Coldwell Banker Weir Manuel Realtors, headquartered in Birmingham.

While some appreciate the conformity, “other people feel hamstrung by those restrictions,” he said. “It’s really kind of a lifestyle decision.”

That’s why it’s critical to investigate whether a subdivision has a homeowners association — and what its rules are — before signing on the dotted line, said David Reese, associate broker/manager for Real Estate One in Troy.

“It’s good to be wise and careful prior to putting the offer in,” he said.

Stringent guidelines are common for condo complexes, where residents own from the drywall in and an association assumes responsibility for the rest.

Monthly fees can range from $150 to $900, depending on amenities available — a pool and clubhouse inevitably crank up the cost — and the nature of the development, said Sweeney.

Homeowners associations for single-family subdivisions are much more variable. Membership may be mandatory or voluntary, fees are typically collected annually, and the organizations’ responsibilities can range from merely planting flowers in common areas to cracking down on homes that fail to fulfill community standards.

“The chances of having very detailed restrictive building and use restrictions on an older home are less than in a newer development,” said Sweeney. “In some of them, they get so restrictive, they control what color you paint the outside of the house.”

Fence regulations are particularly prevalent; other common terms include limiting the number of cars parked in a driveway and requiring approval for additions or renovations, he said.

Restrictions on pets often catch buyers off-guard, especially in condo complexes, as do condo policies that place a cap on the percentage of the development that can be occupied by renters — a potential pitfall if you want to move later on and struggle to sell, said Reese.

Sweeney and Reese said it’s the seller’s obligation to provide the bylaws — and the buyer’s obligation to read them.

Unfortunately, few people seem to be familiar with their own subdivision’s bylaws, said Mitch Seelye, president of the Farmington Hills Council of Homeowner Associations.

COHA acts as a chamber of commerce of sorts for around 70 of the area’s 90 individual associations, bringing in municipal leaders, Realtors, attorneys and other guest speakers to address common neighborhood issues and outline permissible regulations.

Seelye said the umbrella organization helps take the pressure off of the neighbor-versus-neighbor situations that crop up amid association disputes.

A lot of hassle could be avoided if buyers educated themselves beforehand, he said, as particularly nasty disagreements over breached association rules can end up in drawn-out legal battles.

“No one wants to be told what they can do with their property,” said Seelye, “but we all want to tell our neighbors what they can do with their properties.”

Another thing to consider: Sweeney said foreclosures’ impacts on associations have been on the rise, as homes revert back to banks and some families cease paying fees due to financial struggles.

It’s especially problematic in condo complexes, where the association is responsible for much more than in the average single-family development, he said.

“All of a sudden, the burden for maintaining the infrastructure is falling on a smaller and smaller number of homeowners who are willing and able to pay,” said Sweeney.

He’s seen cases where $350 monthly fees shot up to $700 per month, and where associations levied assessments of $2,000 to rectify a shortfall. Liens are placed on properties to recoup the delinquent payments, but since they aren’t paid off until the dwelling sells, it could be years before the association sees the money, said Sweeney.

Little can be done to predict other people’s foreclosures, but “if you’re buying in an area that has a homeowners association, check their finances out and make sure they have adequate reserves and they don’t have an inordinate amount of delinquencies,” suggested Sweeney.

Seelye, who lives in a detached site condo complex, saw his rates rise $25 a month to compensate for foreclosures. In Donnelly’s complex, she was slapped with a one-time $250 assessment when the builder stopped constructing new units and a new company took over the association.

But Donnelly said she has no regrets. While her family’s 1915 farmhouse boasted a porch and a sizeable garden, it also required extensive maintenance.

“One of the real reasons why I did buy a condo was I didn’t want to worry about that; I love that aspect,” she said. “The lawn is always cut on Mondays. We have a beautiful pool and a lovely clubhouse … and they maintain it.”

And while a part of her periodically longs for individuality — her own flowers, a birdbath — “80 percent of me is just thrilled with it,” she said.

You can reach C & G Staff Writer Cortney Casey at ccasey@candgnews.com or at (586)498-1046.