HOA Approval & Your New Custom Home

You have a dream. You want to build your dream home exactly how you want. You're ready to start now. But hold your horses! You're in an architecturally controlled community and some of your neighbors have the right to put their two cents in... and you'll need to abide. So how do you navigate that path? This article will help give you some insight into how to keep you on schedule and your neighbors out of your way...

The Purpose of an HOA

I've heard HOA's best described at "Government by Contract." HOA's have unique legal authority in Texas that permits their rules to be highly enforceable. So, it's very important that you consider these rules (covenants) before you by your lot and before you design your new custom home.

Usually homeowners who purchase a lot within a community that has an HOA do so willingly because of the many benefits HOA-controlled communities offer. The primary goal of the HOA is to keep everyone's property values up and to maintain a proper decorum in the community that keeps the majority of residents happy. For example if you don't want your neighbor parking their old-fixer upper in their front yard for the next few years, then your HOA is your best friend. However, getting a letter from your HOA about your trash cans being visible from the street can get your blood boiling. So, it's a balance. When it comes to your Forever Home and how you want it designed, positioned on your lot, and choosing the exterior materials you want to use, it can feel kind of personal when your plans get rejected during the review process.

Understanding the Different Roles of an HOA

The term 'HOA' is often used as a general term, but there are typically different roles within the HOA and it's helpful for you to be familiar with each role.

At the top of the heap is the HOA Board. The best situation is when this group is composed of elected members of the community (ideally current residents), however in newer communities the HOA can be controlled by the developer. AND- if the developer puts his pocket book before yours, then you could find out the hard way that only builders the developer 'approves' can build your house. It goes without saying that there could quite possibly be some back-door dealing that you're paying for in these cases. This is why it's always best to understand the HOA rules (recorded by-law & convents) that must be legally recorded within the county where your property is located before you purchase your land. Note that I would point out that in some cases I have found the HOA to be enforcing rules that are NOT leally recorded (and thus not legally enforceable).

Next, we have the ACC (Architectural Control Committee). This is a committee that operationally functions below the HOA Board. However, this independent committee has a lot of control over owners and what is permitted in the community. They have so much power in their role that recently Texas law was updated to stipulate that a community member may not simultaneously serve both on the HOA Board and the ACC committee. It is the ACC's role to review plans and enforce architectural rules within your community. They are only supposed to review and enforce legally recorded rules, albeit there is usually some subjective allowances permitted in their decisions.

Finally, we have the HOA Management Company. This is a private company that is hired by your HOA Board to manage the community business, which includes managing the finances, enforcing / communicating directions from the Board and/ or ACC, and communicating meetings and notices to all owners in a community. Typically the communications you send and receive regarding your property will go through the HOA Management Company. The HOA Management Company usually also has direct access to the HOA's legal council.

Plan Review Process

Ideally, before you start the design of your home, it's best to review the architectural restrictions for your community with your home designer. Height restrictions, set back requirements and the type of exterior materials that can be used on your home are common issues that arise during the plan review process.

Once you believe you have arrived at the final set of your custom home's plans you will need to submit them to your ACC for review. Typically this is done through the management company. There may also be a 'builder packet' with further instructions for you and your builder to follow before, during and after your home is built. It is not uncommon for there to be a non-refundable 'plan review fee' and/or a refundable 'builder deposit' in case violations or damage occurs to community property during the construction of your home. It's common for these deposits to run anywhere from $2,000 - $5,000. So be prepared! Most homeowners will receive their builder deposit back at the completion of their home. Some HOAs require an on-site property inspection before these funds are returned. All the more reason to understand what rules you're agreeing to in advance of building your new home.

Typically the ACC will have a set amount of time (commonly 30-60 days) to approve or not-approve your plans. Frequently there is a provision written into the covenants that if the ACC fails to approve/disapprove your plans within the designated timeframe, then your plans are 'administratively approved.' I have seen this occur on many occasions. If you think you have administrative approval, it's always best to write a letter stating your position before just starting construction.

What Happens if our Plans are Disapproved?

Its not uncommon for plans to get rejected on the first attempt for small items (i.e. clarification of exterior color choices, location call-outs on the site plan, and contact information for example). If you find there is a more serious issue for the rejection (like size of the home, location on your lot, or something related to the design), you can appeal the ACC's decision to the HOA Board. This is called a 'variance request' and the Board can overrule the ACC if they agree with your reasoning for granting the variance request. Keep in mind if you're asking for a variance to make your point brief and show how it benefits (or at least doesn't harm) the entire community- not just solely benefitting what you want.

If the HOA Board still rejects your variance request, you have the right to an in-person meeting to see these decision makers eyeball to eyeball and continue your attempt to reason with them to grant your request.

If you still cannot get a variance, then the path of least resistance is to conform to what the HOA Board and ACC is wanting you to do. If you're not ready to give up the effort for your variance, then at this point your only option would be to hire an attorney to review your matter and see if there is any legal strength to your request. I would recommend working with an attorney that understands HOA laws in Texas. Based on your attorney's advise, you can decide how you want to continue. You may be able to have a local county judge agree you're in the right, but obviously this comes with some legal fees- HOWEVER, it might be worth it. Especially if your variance saves you thousands on your build or provides a benefit (like a better view). Be careful though- if you lose your case, then you may also be required to pay the HOA's legal fees they incurred having to defend your lawsuit.

Green Light: Approved Plans

Most plans are approved quickly and professionally within a month or two. In the end, it's best to try to work with your HOA towards a solution that makes everyone happy. Afterall, you will all be neighbors soon. And who knows, you may be on the board or ACC soon enough! Even though the process can get emotional, try to keep your emotions in check, understand the rules and the process. Hopefully sooner than later you'll be pouring a slab and framing up your new custom home!