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by: Wild Bill, aka The Texas Authority

About me:  I have been the President of my HOA in Texas for the past 20 years.  I’ve been an accountant, financial advisor, Controller and CFO for literally hundreds of Texas businesses and business owners.  I’ve been involved in local, state, and national politics, and I’ve been a provider for my family for over 50 years here in Texas.  It’s a great place to live, so lean on me and listen up.

Depending on where you build your custom home here in Texas, you may be subject to the rules and restrictions of a property owner association. The popularity of such property owner associations, more commonly called Home Owner Associations (HOAs), has increased dramatically over the last 40 years.  

Today it is estimated that 75 million people in the USA reside in such “covenanted” communities, with standards and specifications that apply to all residents.  

Driving the popularity of these associations is the desire to protect property values and insure an ambiance that makes for a higher quality of life in the neighborhoods they govern.

So before committing to any specific HOA, it is imperative to understand the way these organizations work. Not all HOA’s are created equal.

The Basics

Property owner associations in Texas are formed as legal entities by the filing of a set of founding documents, typically described as “Covenants, Conditions and Restrictions”(CC&Rs).  

Usually these covenants are accompanied by a set of “Bylaws” which lay out essential standards for its residents to live by.  As the association matures, the governing Board may also develop a set of Rules to supplement these founding documents.  

Together these written instruments form the framework for a distinctive neighborhood.  All of these written documents should be available to the public at large, so you should request these governing documents and READ THEM.  

When you acquire a piece of property that is part of an HOA, these documents will become restrictions to your deed.  From that point on you will be required to subordinate your personal preferences to the terms and conditions set forth in them.

4 Things To Watch For

1.  Architectural Specifications

One of the primary goals of an HOA is to set standards for the construction and maintenance of the structures within the development’s boundaries.

Serious consideration should be given to the types of materials and design characteristics authorized by the CC&Rs, as they may limit your options for your new home.

Issues such as roof height, percentage of masonry, setbacks, and fencing specification may all be regulated, so any applicable CC&Rs should take center stage in the planning process if you are building a custom home.  This is why it is important to READ THE DOCUMENTS.

2.  Behavioral Restrictions

No one wants to build a home in a neighborhood that allows junk cars to be parked in the driveways, or one that allows animals to roam the streets untethered, or ignores rubbish and debris on a homeowner’s property. 

Do the CC&Rs for your HOA address these kinds of issues?   

Other behaviors that may be addressed in the CC&Rs are overnight parking on the streets, prohibition of invasive noise levels, operation of a business out of your home, rental restrictions and even visitor restrictions.  Again it’s important to READ THE DOCUMENTS.

3.  Association Management

With the increase in residential planned developments has come a proliferation of off-site property management companies to offer services that an HOA may need or desire.  

Although the general policies for the neighborhood fall to an elected Board of Directors, it is instructive to understand who runs the day-to-day affairs of the HOA.  

For example, if the community  irrigation system springs a leak on Saturday afternoon, who shuts off the water valve?  If the common restrooms clog up, who calls the plumber?  If a homeowner persists in accumulating debris in his backyard, who confronts the situation to effect a cure?

Attendance at a Board meeting should enlighten your understanding of who does what to maintain the standards and ambiance of your prospective community.  Additionally, you might reach out to the President or other members of the HOA directly, to better understand the culture and expectations of the community.

4.  Association Fees

The life blood of an association’s health is the amount of money available to carry out its prescribed duties.  These funds are derived from assessments levied on the property owners by the Board of Directors.  

Whether or not such assessments are reasonable is a subjective judgement call, but it must be noted that these financial obligations are mandatory and ongoing.  They must be considered as a cost of living factor moving forward, and you should expect to pay your dues.

Before committing to an association’s rules, it would be wise to understand what triggers an increase in fees.  Is there a limit on yearly increases?  What conditions permit a “special assessment”? Or are the fees frozen? 

An HOA operating without the ability to adjust to future inflation may be placing itself in a short-sighted bind.  And, ignoring the possibility of special circumstances which might arise could be risking the future for the convenience of the present.  The only way to know these factors is to READ THE DOCUMENTS.

Tips for Success

For additional insights into the character of your prospective neighborhood, drive the neighborhood.  Drive the streets in the daylight, and in darkness.  Drop in on weekdays, and on weekends.  And while you’re at it…

Talk to the neighbors.  Find out from them if there are any problems.  Take their pulse to see how they like living in their restricted community.

The Verdict

If your thorough examination leads you to commit to an HOA neighborhood, then commit wholeheartedly.  Be supportive.  Be a contributor.  Volunteer.  You are committing to a lifestyle that will preserve your property’s value, and enhance your quality of life.  Congratulations and welcome to Texas.

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