HOAs and Restrictive Covenants, What rules really add value? (Austin: house, neighborhoods)

[wildflower_FL]

The two assumptions that Steve has made that I disagree with are:

1. HOA's are another form of government.

2. Homeowner's are the ones that want to break the rules and HOA's are the ones that prevent that from happening.

From my experience, the ones that don't want to follow the rules, but want to make sure that others do, tend to be the ones that want to serve on the board. Also, you do not have any consititional rights when dealing with an HOA.

If you are following all traffic laws, but come across a police officer (of questionable character) that wants to bring his ticket revenue up, and he pulls you over for speeding, you can contest the ticket. An impartial judge will be the one to decide who is more credible. If you have a passanger that swears under oath that you weren't speeding and the officer can't produce any evidence to the contrary, the judge most likely will side with you. If for some reason the judge doesn't, you can appeal the decision.

If you are following all HOA rules, but come across a HOA property manager or board memebr (of questionable character) that whats to bring their fine revenues up, and cites you for leaving your trash can out, your options to contest the fine are very limited. The HOA is the one that gets to decide if they want to believe their version of the story or yours. They also can decide if they want to consider evidence supporting your version (such as sworn affidavits from neighbors) or if they want to reject it. Your only option is to sue the HOA. Since they are using the homeowners' money, they have much deeper pockets to handle law suits and aren't out their own money if the judge doesn't side with them.

I have very little interest in spending my volunteer time being part of an HOA board so I can make sure the HOA is following the rules. I have learned from experience is that if the wrong people get themselves on the board, you can end up with a nightmare and much lower property values. I have also learned from experience, that the majority of people that live in an HOA don't want to get involved neighborhood matters. I am also not convinced that HOA in and of itself will retain property values 10 -20 years down the road once the developer has moved on.

Back to the OP's original questions, I do see value in having deed restrictions. My house has deed restrictions but no HOA to enforce them. There is a MUD and they do handle the same types of issues that a city would since we are outside the city limits. The MUD does not enforce all of my deed restrictions such as ones regarding landscaping, number of pets, how long the garage door may be left open and what colors you can paint your house. The neighbors are expected to work that out amongst ourselves.

I like the uniform look to common areas that the deed restrictions provide and that they limit the uses of the house to residential purposes. A lot of the residential developement in the Austin metro area seems to take place outside of city limits, so the deed restrictions do provide some framework for what is to be built.

[austin-steve]

When I started this discussion I was curious about other people's view of "reasonable rules" and/or what minimum level of rules would really keep a neighborhood attractive vs which rules actually detracted from the value of the property.

The biggest bang for the buck would be the rules that preserve and protect the aesthetic appearance of a neighborhood. The curb appeal of all homes. More than anything else, a shoddy drive-through will kill the interest of a prospective buyer and they may therefore eliminate the neighborhood from consideration. Reduced demand results in falling/stagnant values.

For example, a 5-year old home I manage had a tree get blown down in a recent storm. I had my tree guy remove the tree and plant a new $500 Red Oak of decent size. The owner griped to me about spending the money when we could have just not put in a new tree. But the HOA rules require two trees in every front yard (which I think is a good rule that will pay off in 20 years for sure) so, in this instance, the HOA rule is doing its job to preserve the desire of all home owners that the neighborhood be one of plentiful trees.

Without the rule, as storms and disease wipe out some trees, particular owners (especially investors) might decide to save money and not replace lost trees, thus hurting the value of all homes. If you're one of the owners who values the concept of a tree lined street, you are being well served by the HOA.

Steve

[Roadking2003]

The positive thing about HOA rules is that the conditions around the neighborhood become predictable. That has a lot of value.

I don't like some HOA rules that make all the houses end up looking too much alike. I like variety, but also quality. So I would not buy in a neighborhood where all houses had to be painted alike and all roofs looked alike.

But the bottom line is if you don't like the rules, don't buy the lot or house.

[TexasHorseLady]

Originally Posted by Roadking2003

The positive thing about HOA rules is that the conditions around the neighborhood become predictable. That has a lot of value.

I don't like some HOA rules that make all the houses end up looking too much alike. I like variety, but also quality. So I would not buy in a neighborhood where all houses had to be painted alike and all roofs looked alike.

But the bottom line is if you don't like the rules, don't buy the lot or house.

This is the usual answer, and to a certain extent, I agree. But when the availability of relatively new housing with HOA's becomes too restricted, then that's not an option for many many people.

I think there should be more balance between HOA and non-HOA new construction. Not that I'm holding my breath.

[eileenkeeney]

I like the tree rules as well. The two trees per lot is my favorite rule for the particular neighborhood I was (am?) considering.

However, there are a few issues with the rule.
The lots are so small that in many cases the trees (planted when the subdivision was new) were already invading the home foundations.
In many cases the trees had been removed, probably for this very reason.

The same subdivision has a rule against letting bushes grow taller than 5' (or maybe it was 6, I don't remember the exact number).
In a few cases, the houses would have been better served by tall bushes, than trees(weaker root system, less likely to damage foundations).

If I were to by this house:

I would probably need to remove that tree. The roots are already up under the foundation, although the inspector did not find any actual foundation damage.
(But he was not an engineer or foundation expert).

[eileenkeeney]

Originally Posted by Roadking2003

But the bottom line is if you don't like the rules, don't buy the lot or house.

If people who own, in areas where the deed restrictions are so restrictive that they hurt the property values, these owners might be inclined to invoke the options for modifying the rules.
Some areas do have this option.

[atxcio]

Originally Posted by eileenkeeney

I would probably need to remove that tree. The roots are already up under the foundation, although the inspector did not find any actual foundation damage.
(But he was not an engineer or foundation expert).

To give you a feel of City of Austin restrictions, you might not be able to remove that tree because of the trunk size. Even if it was destroying your house. You would have to modify the house to accommodate the tree.

Some Austin homeowners call for reasonable tree ordinance | kvue.com | KVUE News home | KVUE.com | Austin news

[eileenkeeney]

Originally Posted by atxcio

To give you a feel of City of Austin restrictions, you might not be able to remove that tree because of the trunk size. Even if it was destroying your house. You would have to modify the house to accommodate the tree.

Some Austin homeowners call for reasonable tree ordinance | kvue.com | KVUE News home | KVUE.com | Austin news

That is good to know.
I knew I would need permission to remove the tree, but thought that it being a threat to the house was enough to get permission.

Oh well, Another reason (besides the electrical, plumbing, ducting and water integrity issues; and the deed restrictions) to not buy that house.

[IC_deLight]

Originally Posted by austin-steve

But the HOA rules require two trees in every front yard (which I think is a good rule that will pay off in 20 years for sure) so, in this instance, the HOA rule is doing its job to preserve the desire of all home owners that the neighborhood be one of plentiful trees.

Without the rule, as storms and disease wipe out some trees, particular owners (especially investors) might decide to save money and not replace lost trees, thus hurting the value of all homes. If you're one of the owners who values the concept of a tree lined street, you are being well served by the HOA.

Steve

Hmmm. This creates ambiguity as to whether there is an actual restrictive covenant mandating two trees or whether this is merely some HOA corp board "rule" as it has been called.

A rule is NOT a restrictive covenant and no owner is being served by an HOA corp board that imposes such whimsical rules on property owners. All that is being served is the personal preference of board members.

Demanding that a homeowner plant a tree using the threat of fining and litigation with what can only be described as an unsubstantiated claim of a "payoff in 20 years" is not doing any favors for the owner of the property. Should the HOA board members be held accountable if it does not "payoff"? Will the homeowner be the beneficiary of the "payoff"? Most people aren't buying property solely to sell it. They purchase it to live in it.

[eileenkeeney]

5.08. Landscaping. At least two (2) trees shall be planted in the front yard of each Lot and the front yard of each Lot shall be fully sodded prior to the occupancy of the residence located on such Lot.

This can be found in the deed restrictions found here:
http://www.wellsbranchmud.com/covenants/014Phasedsec1.pdf (broken link)

In this case it says nothing about keeping two trees. The subdivision is about 25 years old.

I am guessing that the rules were not well thought out.
While trees do add value, root invasion decreases value.