Flipping a house can be a financially rewarding venture, but it can also be full of unknowns and questions. Will there be hardwoods beneath the orange shag carpet? Will you uncover termite damage behind the drywall? Is the wall between the kitchen and the living room load-bearing? Should you expand the master bath to include a separate tub and shower? We could go on.
Although flips can come with many unknowns that are difficult to anticipate what you can prepare for are the rules and regulations of your community’s homeowners association (HOA). HOA ordinances are intended to help the neighborhood maintain a neat and consistent appearance. While HOAs may sometimes appear to have free reign when it comes to community governance, they must abide by laws established in the Fair Housing Act, as well as by their own covenants, conditions, and restrictions—known as CC&Rs. Here are two things your HOA can’t do.
An HOA cannot enact or enforce rules that single out or disadvantage any group that’s identified in the Fair Housing Act. This means your HOA can’t prevent you from buying a flip house in a neighborhood, or fine you, based on your race or ethnicity. Neither can the homeowners association discriminate based on sexual orientation, gender identity, or religion.
Make new rules on the fly
An HOA can’t suddenly place a ban on flagstone landscape pavers because they don’t like the ones you’re using in the front yard of your flip. Your homeowners association cannot create new rules on the fly—there are regulations for how new rules can be passed and they should be outlined in the HOA’s CC&R. If your HOA isn’t adhering to its own stipulations, you have a legit complaint. Request documentation from your homeowners association and consider attending public meetings, or having someone on your team do so.