Let’s say you have your plans and specs in hand and your builder is waiting for you to call. Everything from financing to finding a tenant for the rental is lined up and waiting for your next move. Now all you need to do is find out where to build. If you’re looking in a relatively new subdivision or a new cc&rs and new constructionphase of an existing development,

it’s likely that the neighborhood is regulated by a Homeowners’ Association, or HOA and they’re the gatekeepers for another acronym, the CC&Rs.

CC&Rs stands for Covenants, Conditions and Restrictions and are the rules for homeowners in the development. Most CC&Rs start out with basic, template-type regulations such as park rules and amenity access for example. Yet after some time has passed, new rules can be approved and added by the HOA as new issues crop up. Many times the HOA is staffed by a sometimes overzealous board who can get rather creative when telling homeowners what they can do with their own property. Some are easy to understand and some not so much.

Newer developments can dictate the type of building materials you may use on your property as well as the composition of the roof. Maybe metal roofs are banned or maybe metal roofs aren’t banned but they can only be one of three colors. HOA rules can restrict someone from parking their boat in the driveway 24 hours per day which is a good idea but the HOA can also insist that three-car garages are one car too much and only two car garages are allowed.

The height of the house may be restricted and only one story houses are allowed. Is your grass mowed? Is the grass height greater than two inches? Then you might be fined if your lawn isn’t kept up to standards. There are good HOAs and there are bad ones but the point is making sure you’re comfortable with a neighborhood’s CC&Rs before building your next investment property. A little legwork will keep CC&R headaches away.