What Are Covenants, Conditions & Restrictions (CC&Rs) in HOAs?

If you buy a home, like a single-family home, in a planned, covenanted community, you'll most likely be part of a homeowners' association (HOA). The rules of the HOA community are described in the Declaration of Covenants, Conditions, and Restrictions (CC&Rs).

Most of the time, the rules make sense and are easy to accept; it's pretty easy to agree with a covenant that requires you to mow your lawn and keep it weed-free. But other rules might interfere with your plans or seem unreasonable to you. You might want to park your car in the street and turn your garage into a home office. However, the HOA might require you to keep your car in the garage or restrict what you can do with the garage space. Or maybe you want to put up a fence around your yard. After reading the CC&Rs, you find the community doesn't allow fences.

If you violate the CC&Rs, you could face various penalties, including fines and maybe even foreclosure.

What Are Covenants, Conditions, and Restrictions (CC&Rs) in HOAs?

An HOA's "Covenants, Conditions, and Restrictions" (CC&Rs) is a legal document that describes what you can and can't do with your home. For example, the CC&Rs might limit what color you can paint your house, prohibit you from leaving your laundry out to dry, or describe what type of mailbox you may install.

These terms have the following meanings:

• Covenants. "Covenants" are agreements that homeowners make when purchasing a home that's part of an HOA, such as agreeing to maintain their lawns and not break the community's rules.
• Conditions. "Conditions" generally refers to conditions regarding the use, appearance, and maintenance of properties within the community.
• Restrictions. "Restrictions" are limitations or prohibitions on certain activities, property uses, or home maintenance. For example, the CC&Rs might restrict your landscaping choices or prevent you from building certain types of structures, like sheds or fences.

CC&Rs are usually recorded in the county clerk's office and run with the land, which means these rules remain with the home even when the property is sold or transferred to a new owner.

Why Are CC&Rs Important for Homeowners?

The main reason for having CC&Rs is to protect and enhance the community's property values. They preserve the neighborhood's aesthetic and uniformity. They also foster a harmonious living environment. Having a well-functioning HOA can influence (and enhance) resale values. Having an HOA that's poorly managed or inattentive can devalue homes in the community.

That said, living under an HOA's CC&Rs isn't right for everybody. There are pros and cons to being part of an HOA. (See "What Are the Pros and Cons of Living Under an HOA's CC&Rs?" below.)

CC&Rs are legally binding rules that apply to homeowners who are members of the HOA. Homeowners who violate the CC&Rs might face certain penalties (see below). Not only can HOA rules directly affect your day-to-day living, but they also often impose financial obligations. Most homeowners who are part of an HOA have to pay periodic fees (such as monthly) and special assessments to the HOA. These dues pay for the upkeep of common areas or shared amenities like pools, parks, or security services. The CC&Rs describe the types of fees the community requires, how special assessments work, and the penalties for nonpayment, such as late charges and interest.

So, if you buy a home in an HOA community, you have to play by the rules. But you also need to know your rights and what the HOA can—and, more importantly—can't do. You might have legal protections against unreasonable restrictions or discriminatory practices. More and more states are regulating what HOAs can and can't do.

If you don't know your rights, you can't enforce them. If you need help, talk to a lawyer.

How Can Homeowners Access Their HOA's CC&Rs?

Typically, you'll get a copy of the governing documents, including the CC&Rs and bylaws, when you buy your home. Also, many HOAs also post their CC&Rs online. If not, contact your HOA to get a copy.

What Are Some Common CC&R Restrictions and Requirements?

CC&Rs in real estate typically include restrictions and requirements on:

• Property maintenance. Again, the CC&Rs might require you to mow your lawn regularly. Or the CC&Rs might state that you can't allow the home's exterior paint to peel. Some HOAs provide lawn care and home maintenance services, like exterior painting. Other HOAs expect homeowners to take care of these tasks themselves.
• Home Decorations. The CC&Rs could say how you may decorate your house, either permanently or temporarily.
• Pets. Some CC&Rs prohibit specific pets, like livestock or certain dog breeds, or limit your number of pets.
• Parking. CC&Rs sometimes prohibit vehicle parking in specific areas and limit overnight guest parking.
• Garbage/Unsightly Items. The CC&Rs might require trash containers, utility meters, and clotheslines to be enclosed or appropriately hidden from view.

And, of course, the HOA might have other requirements as well. The CC&Rs could restrict the height of your fence, require a defensible space for fire protection, or prohibit political signs, among other things.

And if you're planning a big project or home addition, like adding a swimming pool, you'll need to check with the CC&Rs to ensure the project isn't prohibited.

What Are the Penalties for Violating a CC&R?

People who close escrow on a home in a planned community generally sign a series of papers, including one that says they've read the CC&Rs and agree to abide by them. The HOA usually enforces the CC&Rs and might penalize you if you violate them. Failing to comply with CC&Rs can lead to legal disputes and enforcement actions, potentially resulting in liens or lawsuits from the HOA.

If you violate the CC&Rs, potential penalties might include:

• fines
• suspension of your privileges to use the common facilities, like a community gym
• forced compliance (the HOA might go on your property, fix the issue, and bill you for it), or
• the HOA might file a lawsuit against you or, in some cases, foreclose.

Example. Suppose you have a large dog despite a rule limiting the maximum pet weight in the community to 25 pounds. You could be fined and possibly forced to give up the dog or find a new place to live. Don't count on changing the rules, which is usually tricky.

So, read the CC&Rs before buying a home in a planned community.

What Happens If You Don't Pay HOA Dues or Fines?

The HOA can typically get a lien on your home if you fail to pay dues or assessments. An assessments lien usually automatically attaches to your property, typically as of the date the fees or assessments became due.

Sometimes, an HOA records the lien with the county recorder to provide public notice that the lien exists, even if they don't need to record it.

How Do HOA Lien Foreclosures Work?

Having an HOA lien on your property could lead to a foreclosure. But even after an HOA foreclosure, you might be able to get your property back after the sale by redeeming it, depending on state law.

Liens for Unpaid HOA Fines

Also, if you don't pay an HOA-imposed fine, the organization might have the option to place a lien on your property if state law allows it. Some states have a law that says an assessments lien may include fines. But sometimes, an unpaid fine doesn't become a lien automatically. The HOA might have to file and win a lawsuit against you in court to get a money judgment.

After getting a judgment from the court, the HOA may record that judgment in the county. Taking this step creates a lien against your property. Then, depending on state law and the HOA's governing documents, like the CC&Rs, the HOA might foreclose that lien.

However, some states forbid liens for unpaid fines. Others, like Colorado, restrict or prohibit foreclosures when an HOA lien consists only of unpaid fines and related costs like attorneys' fees.

What Are the Pros and Cons of Living Under an HOA's CC&Rs?

The main benefit to living under an HOA's CC&Rs is that your neighborhood will most likely have a consistent appearance (again, CC&Rs often regulate landscaping and general property upkeep). These requirements can preserve the curb appeal of homes in the community. Also, many HOAs provide amenities (paid for by HOA dues), such as pools, parks, and fitness centers, for residents to use.

However, an HOA can have a lot of power over a neighborhood. Homeowners often lose control over what they're allowed to do with their properties. Some improvements, like putting up a flagpole or installing solar panels, could require the HOA's prior approval or might not be allowed. The approval process can lead to delays (or a denial) and, ultimately, homeowner frustration.

Also, some HOAs are quick to impose fines when a homeowner violates the CC&Rs, even for just minor violations. These fines can add up. And if you don't pay the assessments, or in some cases, fines, you might face penalties, including the loss of your home to foreclosure. In addition, the dues and assessments will probably go up over time.

Talk to an Attorney About Your CC&Rs

If an HOA initiates a foreclosure against you or imposes penalties you feel are unfair, consider talking to a foreclosure attorney to learn about your options. You might be able to ask for, or the HOA might require, a preforeclosure meeting to discuss the violation. At the meeting, you might be able to negotiate a resolution to the problem, such as agreeing to begin a payment program to pay off your fees, fines, or other unpaid amounts.