History of Homeowners Associations

In the 19th century, the United States began to transform, setting the stage for the emergence of homeowners associations. It went from a primarily agricultural society to an industrial culture. A growing number of people took jobs in cities. But most cities were overcrowded, dusty, and noisy. The advent of commuter rail lines allowed people to work in the city and live in the country. A series of railroad communities grew up along the rail stations.

In the 20th century, people became even more mobile, thanks to the automobile. This led to a series of planned communities around the country. In some, single-family homes looked essentially the same. Others included several designs.

Real estate developers fueled homebuying by constructing condominiums and cooperatives. These planned unit developments had no restrictions. But people in these communities generally shared common ideas of how streetscapes should look. Homeowners associations (HOAs) as we know them today did not exist. Homeownership was not subject to HOA rules and HOA fees. But, residents cared about preserving property values and promoting healthy occupancy.

A History of HOAs

The first modern planned development was in Levittown, New York. It was on the site of a Long Island potato field off the coast of New York. Builder William Levitt constructed a series of inexpensive but attractive homes. He wanted to make them affordable for veterans to purchase. Low-interest loans guaranteed by the federal government financed the purchases. The government did this through the Servicemen's Readjustment Bill of 1944 (the GI Bill).

Between 1947 and 1951, more than 17,000 houses were built in and around the original Long Island community. Levittown residents were subject to restrictive covenants in their deeds. Similar to governing documents in HOA communities, deed restrictions set rules like:

• Prohibiting laundry lines in front yards
• Restricting types of land use
• Limiting sales to certain buyers or renters (This was later found to violate the Fair Housing Act to the extent it was discriminatory.)

But, there were no homeowners associations to enforce the restrictions or enact changes. Community associations or HOA management companies did not yet exist. State law and local government regulations, including zoning ordinances, were inadequate substitutes for property owners' associations. While property taxes helped develop schools and playgrounds for the community, more was needed to promote harmony between neighbors.

The Birth of HOA Boards

As suburban living grew, developers built other projects on a smaller scale. The developments were often more self-contained than the large-scale communities. They maintained stricter standards regarding the appearance of the homes.

The standards applied to both the structures and the landscaping of homes. The general idea was to draw certain people to communities. This included people looking for certain amenities, such as restrictions on pets or rules governing landscaping. Other developments offered different options.

People created covenants, conditions, and restrictions (CC&Rs) to formalize the development and neighborhood rules. A homeowners association with a board of directors was set up to:

• Address all the resident concerns
• Provide for maintenance of common areas
• Create CC&Rs, by-laws, and rules for members of the community
• Meet expenses through reserve studies, special assessments, and reserve funds

Today, homeowners associations (HOA) and common interest developments (CID) have complex regulations. HOA board members create and enforce these rules for the harmony of all residents. But sometimes, this can lead to disputes with neighbors or the homeowners association itself.

Speak With a Lawyer

Before you purchase a house or promise payments to a lender, consult with a local real estate attorney. They can advise you about all the rules, regulations, and by-laws of a development or neighborhood you are considering. A knowledgeable real estate salesperson or Realtor may not be enough. Understanding the law is a separate matter altogether. From California to New York and Florida to Texas, residents of all states can benefit from legal experts.