Condo - Quicken Loans Zing Blog

You’ve probably heard of homeowners association (HOA) fees, but have you heard of covenants, conditions and restrictions (CC&Rs)? The first time I read that phrase, I thought it was referring to some federal tax law or something. While CC&Rs are legal terms, they just refer to the rules put in place by your homeowners or neighborhood association, builder or developer.

What Are Covenants, Conditions and Restrictions?

Condominiums are one of the most common types of property with HOAs, but townhomes, planned subdivisions, gated communities and co-ops usually have them too. Sometimes called bylaws, CC&Rs are a homeowners association’s rules for all of the homes and homeowners in that community. These rules cover everything from adding a pool or shed to your property to what kind of curtains you can have.

As a quick aside, CC&Rs are different from zoning laws. CC&Rs are agreements between private parties while zoning laws are dictated by government entities.

CC&Rs can be pretty controversial at times, so I’ve broken down the good and the bad for you to think about.

Advantages of CC&Rs

If you’re thinking about buying a condo or any of the other home types mentioned above, there are a lot of pros and cons to consider, and, depending on your personality and your needs and wants, living in a community regulated by an HOA may be exactly what you want. CC&Rs are going to keep your neighbors from throwing loud parties, ignoring their landscaping so you feel like you’re living in weed city, leaving all their laundry flapping in the breeze for you to stare at, subletting to trashy tenants, keeping a pack of massive dogs or repainting their home a bizarre mix of colors.

When you put it like that, living under your HOA’s CC&Rs sounds like a no-brainer, right? Well, let’s flip that coin over.

Disadvantages of CC&Rs

If you want to know about the disadvantages of buying a home governed by CC&Rs, just read the paragraph above like you’re your neighbor. The rules are pretty specific about where you can park your car (not in your driveway for more than two hours, for example), how many visitors’ cars can be parked around your home, how much noise is too much and where/how you can party outside.

You’re also going to be limited in a lot of other ways:

  • What kind of landscaping you can do
  • What color you can paint your front door
  • If you can put up a fence for your dog
  • If you can even have a dog
  • What kind of curtains/shades/blinds you can have in your windows
  • If you can put a basketball hoop in the street/driveway/front yard
  • If you can park your boat/RV in your driveway
  • What kind of shingles you can have
  • If/how to put in a pool, swing set, garage, shed, mailbox, outdoor lights, TV antenna and decorative wreaths

Things to Know Before You Move In

I hope I didn’t put too much of a damper on your plans for that new condo – it still might be a good option for you, but there are some things you should know and do first.

Ask to see the association’s operating budget, and make sure they aren’t losing money. Get copies of the engineering, architectural or structural inspection reports too; what you don’t know definitely can hurt you. Also make sure you clearly understand the rules for electing board members, subleasing and remodeling.

If there’s a rule you don’t like, don’t assume that you can get it quickly changed once you move in just by submitting a petition. Different HOAs have different rules on when and how their regulations can be changed, and often, too few people show up to the meetings to be able to vote on changes anyway. Also, because they’ve chosen to live there, most residents probably agree with the current rules.

If you’re thinking that it can’t be that big of a deal, and that you can just ignore the rules you don’t like … think again. The CC&Rs you sign when you purchase the home are legally binding documents. This means the HOA can impose fines, force compliance or even sue you if you don’t obey.

Remember, you’re paying monthly (sometimes yearly) HOA dues and assessments, and if you fall behind on those dues, the association can actually put a lien on your home – meaning they have a claim to the property if you don’t pay. If you fail to pay over a long enough time, your home could be foreclosed on.

Foreclosure is a pretty extreme situation, and I don’t want to end on a negative note. Condos and HOAs can be great if they fit your lifestyle, but it’s important that you fully understand what you’re agreeing to before you agree to those covenants, conditions and restrictions.

What kind of experiences have you had with homeowners associations and CC&Rs? Do you think they’re a good thing, or are they too prohibitive sometimes?


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