About Homeowner's Associations
An HOA is an entity that governs activities in a residential area. Most HOAs require residents to pay dues for services they provide, such as landscaping of the subdivision's streets. Depending on the services provided, HOAs may charge each household several hundred dollars per month in dues. HOAs also impose covenants, conditions and restrictions on the neighborhood's residents. Typical regulations include restrictions on the color of your house, your yard's landscaping, the types of fencing you can install and whether you can park your car in the street.
Typical State Laws
Most states with laws regulating the activity of HOAs require an HOA to clearly disclose its rules and regulations to potential residents before they purchase a home in the HOA's jurisdiction. Laws may also limit the power of HOAs to place restrictions on residents, and they may require an HOA to refund collected dues to residents if it doesn't perform services promised in the initial contract.
At the time of publication, Alabama has no law governing the actions of HOAs. During 2009, Alabama's governor created a task force committee to develop legislation that would protect homeowners and potential buyers in residential areas regulated by HOAs. However, when a new governor replaced the governor who created the task force, the committee dissolved. At the time of publication, there is no formal initiative to develop regulations for HOAs in Alabama.
Because Alabama imposes no restrictions on HOAs, a resident may purchase a home in a neighborhood with an HOA before learning that the dues are unaffordable or the regulations don't fit with his lifestyle. In addition, an HOA can raise dues without giving residents advance notice, and there are no legal consequences for the HOA if it fails to provide the services it promised to the neighborhood.