Did you read the CC&Rs before you struck a deal?

Five years after purchasing our home, I am doing some light reading on Labor Day: The CC&Rs for our homeowner's association (HOA). Why, you ask? I happened to google CC&Rs and found an interesting page on Wikipedia. Here is the link: http://en.wikipedia.org/wiki/CC&Rs

The CC&Rs were designed to protect the neighboorhood, the developer as well as the individual rights of the homeowners. Most of these items make good sense to me, but others will surely disagree.

Here are the highlights:

1. No large commercial vehicles

2.No livestock

3. No clotheslines

4. No mining

5. No illegal enterprises

6. Prior approval is required for most changes including exterior window coverings, antennas and so forth. Nothing unsightly as determined by the architectural review board.

7. A reference to "overnight parking on the street isn't really allowed.

Here are a few items that I question:

1. No basketball hopps without prior approval from the architectural committee. Really?

2. Your swingset must be made a specific style and material (wood). I got the letter on this one. My metal swingset for the kids is illegal and needs to go?

3. All lawns must be mowed and fertilized on a timely basis. This seems a little arbitrary. Is someone going to peek over the back wall to make sure I don't have crabgrass as well?

Every neighborhood has at least one of these, don't they?

But now to get to the real issue for folks in Arizona. As of 1996, if you purchased a home in a planned community, the CC&Rs may have eliminated your "Homestead Exemption".

What does this mean?

The Homestead Exemption protects up to $150,000 of the equity in your home from creditors. If you owe someone money and have less than this amount of equity in your home, you would be protected from having a lien placed on your property. They may place the lien elsewhere, but not on your home. So in AZ, the HOAs wanted to be able to enforce the CC&Rs and by eliminating the exemption, they can now place a lien on your property if you don't abide by the rules and so can any other creditor.

I can't say that I was aware of this when I purchased a home within an association and it comes as a surprise to me. I am going to follow up on this to see if it does apply in my neighborhood. In the future, I will be sure to complete the due diligence and debate the pros and cons of living within the"protections" of an HOA before we enter into a contract.

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Patrick Randles

Sunstreet Mortgage, LLC

Tucson, AZ 85718

(520)850-7485

Photo courtesy of Kate Shepard, Flickr