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ASSOCIATIONS

Fee hikes don't apply just to condos

July 23, 2006|Stephen Glassman and Donie Vanitzian | Special to The Times

Question: When I see single-family homes for sale with homeowner associations and assessment dues or fees, does this automatically mean these single homes are deed restricted? Could that homeowners association impose 20% assessment fees on homeowners without a vote of the owners, just like they do on condominiums?

Answer: Any house, whether standing alone or attached, that is in a common interest development with a homeowners association will have a title that is "deed restricted."

A deed-restricted property is subject to the Davis-Stirling Act, which governs condominiums and other types of properties, including single-family homes.

Just as with any other form of common-interest type of property ownership, the deed-restricted house can have annual, non-voted fee increases of 20%.

To learn whether the house for sale is deed-restricted, ask for the declaration of covenants, conditions and restrictions, or CC&Rs, before making an offer or signing the purchase agreement. Once well into escrow, it will be too late to uncover such information without jeopardizing your position as a buyer. Don't forget, however, that the California Assn. of Realtors' standard purchase agreements provide a 17-day period during which buyers can back out with ease.

Alternatively, if the seller can't or won't say if the home is in a deed-restricted common-interest development and there is uncertainty about the type of property being purchased, include a "condition" in your purchase agreement allowing you to back out of the sale at any time without penalties or forfeiture of deposited funds if the property is in a deed-restricted community.

Unfortunately, low monthly association dues are all but nonexistent in many common-interest developments. Sometimes, comparatively lower homeowner association dues are used to entice buyers into a development, with nothing said of special and emergency assessments or fee increases down the road.

Be wary of advertisements that omit referencing "HOA" (homeowners association) assessments and instead refer to "HODs" (homeowner dues). This can be misleading because homeowner "dues" are "assessments" and can indicate the property is deed restricted.

Owners of deed-restricted property, whether it's a single-family home, a town home or a condo, are part of a homeowners association. Being part of such an association, which is operated by a board of directors and of which all owners are a part, may mean that individual owners are unable to effectively control aspects of their ownership, such as monthly expenses.

Send questions to P.O. Box 11843, Marina del Rey, CA 90295 or e-mail noexit@mindspring .com.

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