Let’s leap ahead to the incredible moment when you sign a stack of documents and celebrate the purchase of your Seattle dream home. Will you be like many people and listen to the escrow agent describe the purpose of each agreement without reading what’s printed in front of you and sign away?
We’ve preached this before: Don’t simply sign any documents without understanding the terms. They are contracts. This especially applies to buyers of condo units who are governed by a series of covenants, conditions and restrictions (CC&Rs) that are policed by a homeowners’ association (HOA).
Among the documents you will sign at closing is one that states you have read the CC&Rs and agree to abide by everything within. You are entering into agreement with the other condo owners to conform to those rules.
Don’t get me wrong; I like the condo life. I’ve lived in condominiums for more than 15 years, both in Seattle and New Jersey. Condominiums can be gated (or ungated), sprawling, multi-unit dwelling communities or traditional, high-rise buildings – and I’ve experienced all three living environments.
In one condo, home dwellers were not allowed to place any decorations – wreaths, signs, holiday lights – on the outside door in an ungated community. How would you feel if you purchased a fresh wreath and couldn’t hang it on the door for all to enjoy? One condo association even had a rule against a Welcome mat. How welcoming!
Among its many duties, the HOA is charged with adopting bylaws, rules, regulations, budgets, as well as making contracts with vendors to help maintain the property. Without structure, members of the community could do whatever they wanted and possibly influence the value of homes.
In addition to reading and understanding the CC&Rs, it’s also important to request in advance the HOA’s financial reports and ask whether the association is in litigation or facing pending lawsuits. Depending on the answers (and whether you buy the home), you may be joining a condo that could hold you liable to financial or legal consequences just like your neighbors. If you’re buying a unit as a rental property, be sure you understand the HOA’s rules on owner-tenant rental ratios and whether homes can be promoted on short-term rental sites such as Airbnb and VRBO.
As you see, CC&Rs cover a wide range of rules: on-street and garage parking, landscaped areas, noise levels and curfews, elevators, recycling, smoking and growing marijuana (it’s legal in Washington but not necessarily in a condo), as well as use of common grounds such as a club room or rooftop. When it comes to adjudicating the rules, some HOAs follow the letter of the law while others can turn a blind eye.
“I usually advise buyers to review the CC&Rs – to understand what they say,” notes Lawrence Glosser, real estate attorney and partner at Ahlers Cressman & Sleight in Seattle. “In one case, people bought a house [in a neighborhood with CC&Rs and an active HOA] and they wanted to put in some fencing for a dog area and then found out they couldn’t.
“If buyers see something that can limit the use of their home, then contact an attorney,” he adds.
Speaking from my experience, home dwellers usually learn they are in non-compliance (okay, breaking the rules!) through a letter in the mail from the HOA or its management company charged with overseeing the community. When digging through files for the CC&Rs, which are usually supplied to homeowners well before closing, dwellers can usually find the rules and associated penalties right there in black & white.
Typically, a first written violation will come with a finger-wag and tsk-tsk. A second (or, heaven forbid, third) violation of the same rule will likely lead to a fine that escalates each time it is broken. Sometimes, the HOA board must step in to help resolve an owner-condo disagreement, and the legal system is the ultimate arbiter on protracted conflicts.
But let’s not go there, especially if it’s only over a Welcome mat!
In the end, be sure to read the CC&Rs – or have your real estate attorney have a look – before you get to closing day.
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