Deed Restrictions: The American Reality

Article Courtesy of The Tampa Tribune

By Julie Pace
Posted on Sunday, June 18, 2006

TAMPA - It's a standard of success for many Americans - owning your own home.

It's where you can spend weekends painting, watching your children play basketball in the driveway, and walking the dog around the block.

In the Tampa Bay area, homeowners increasingly are being told to get that paint color approved, put the basketball hoop away at night, and walk the dog only in designated areas.

If you don't like the rules, don't move into the neighborhood, say supporters of the deed-restricted communities where these regulations are typical.

But finding a neighborhood without restrictions is becoming harder to do in the Bay area.

Changes in land development codes and growth management regulations mean nearly every single-family home built in Hillsborough, Pasco and Pinellas counties during the past decade has a homeowner association, bringing the number of association-run communities to more than 1,000.

That is part of a nationwide trend that has seen homeowner association communities rise from 6,000 in 1970 to about 157,300 in 2006. The heaviest concentrations are in fast-growing states such as Florida, California and Arizona.

Buying in homeowner association communities might mean gaining control of neighborhood aesthetics, but it also means losing basic rights. Some homeowners aren't aware of that, especially if they don't read the rules. Those rules are often more than 100 pages long and filled with legal jargon.

Not knowing the rules can cost residents thousands of dollars and, in extreme cases, their homes.

Newer Homes, Little Choice

The changing housing market affects the Bay area's middle-income buyers the most. They're the ones most likely to look for homes that cost about $201,700, the median home price in the Tampa-St. Petersburg-Clearwater area.

The median price of a single-family home in Hillsborough County is $212,000. Most houses that hover around that price are in areas saturated with deed-restricted communities, such as Carrollwood and south Brandon.

Neighborhoods with fewer deed-restricted communities tend to fall at both ends of the spectrum - high-end houses in south Tampa, where the average home price is between $325,000 and $425,000, and low-end houses in areas like Sulphur Springs, where the average price is $120,000.

Rolando Genao considers himself an average buyer. The 40-year-old small-business owner and father of three relocated from Danbury, Conn., to Tampa to escape cold winters.

When Genao started house hunting, price was the most important factor. Genao also considered location and the quality of schools.

Whether a community had deed restrictions and a homeowner association was not something he considered. He didn't have to. Most neighborhoods in his price range - about $300,000 - were run by homeowner associations.

Genao expects to close soon on a house in Countryway, a deed-restricted community in northwest Hillsborough County.

He will pay a $340 annual homeowner association fee to maintain community tennis courts, playgrounds and landscaping.

Having never lived in a deed-restricted community, Genao took some time to read the rules. Nothing seems unreasonable, he said, and he likes the idea of living in a well-maintained neighborhood.

Still, Genao is not convinced it takes a homeowner association and deed restrictions to have a nice neighborhood.

"I wish the luxury of having a nice area, and people who take care of it, would be free," he said.

No Rules. Just Right?

That type of community is possible, said Peter Anello, a resident of Four Oaks, an 81-year-old, association-free community tucked between Citrus Park and Carrollwood.

Since purchasing his home in 1985, Anello has watched deed-restricted communities pop up around him, but he said he's proud that his neighborhood has maintained its character.

"We're very individualistic out in the neighborhood," he said. "It's like a little gem."

Because there is no association, there is no protection from a neighbor who fills their yard with lawn kitsch or leaves a rusty car in the driveway.

Anello said he would rather have nearly a half-acre of property and a street lined with nearly century-old grand oaks than a neighborhood where all the houses look the same.

In a deed-restricted community, "You have trouble finding somebody's house because they all look alike," he said.

With fewer communities like Four Oaks available, other homeowners looking to escape restrictions find themselves moving to more rural counties.

That's how Walter Morrissey found himself in a restriction-free neighborhood in Hudson, after getting fed up with Pasco County's Beacon Woods, where he was banned from parking his pickup in his driveway.

Morrissey's new neighbors in Brooksville formed an informal association to help clean up common areas, but there are no rules telling residents what they can or can't do on their own property. Gaining that freedom, Morrissey said, was worth the move.

That view is becoming outdated, said Ellen Hirsch de Haan, a prominent Largo-based homeowner association lawyer.

People no longer buy a home expecting to stay there for decades, she said.

Not only do people looking for a quick turnover want a guarantee that the neighborhood will look the same in a few years, but de Haan said they also want easy access to amenities, such as pools and parks, that come standard in many large homeowner association communities.

People would lean toward these neighborhoods, de Haan said, even if more choices were available.

"Is it more important to be able to paint the house the colors of your favorite college team, or have a community that is well-maintained?" de Haan asked.

Giving Up Control

When people who want a nice home in a nice neighborhood are forced into association-run communities, they're also forced to take big risks, lawyer Barry Silver said.

Silver represents homeowners in association disputes and said many people don't realize what they're giving up when they move in.

It's about more than losing the ability to choose landscaping or paint colors. In Florida, association rules can override some of the protections of the U.S. Constitution because associations are considered private corporations, not a governmental body.

Silver said that means residents are putting themselves at the mercy of the homeowner association board.

"You have to hope and pray you don't have people who become petty dictators and make your life miserable," he said.

High-profile disputes, such as the battle over a "Support Our Troops" sign in Westchase, or the parents of a cancer patient fighting to keep their son's treehouse in Tampa Palms, highlight the ugly side of life in an association.

Most people, Silver said, assume they'll never end up in that situation, so they don't take time to become fully versed in the consequences of breaking the rules.

That's what happened to Carrollwood Village resident Cherie Callahan. Despite living in the deed-restricted community since the early 1980s, Callahan said she never knew the homeowner association could take her house.

Callahan was diagnosed with Lyme disease in 2002. The illness forced her to stop working, and she fell behind on her bills, including her $284 homeowner association fee.

In September 2003, the association filed a lawsuit to foreclose on her house.

"I just don't understand why a group of private citizens can be afforded that power," she said.

Callahan was lucky. Like most homeowners who face association foreclosure, the board dropped the case after Callahan paid the assessment, plus about $1,000 in attorney and court fees.

In 2004, the Florida Legislature amended association foreclosure laws. Homeowners no longer can face foreclosure for violating deed restrictions and not paying those fines.

They still can face foreclosure, however, for not paying annual dues and special assessment fees.

The costs Callahan faced pale in comparison to the fees some homeowners have paid associations.

What started as a fine for a dried-up lawn has Pebble Creek homeowner Edward Simmons facing more than $50,000 in attorney and court fees after he tried to fight his homeowner associatiom.

A civil court sided with the association, ordering Simmons not only to fix his lawn, but also pay fees the association accrued during the four-year legal battle.

In April, a judge ordered the two parties into mediation, which could help reduce Simmons' fees.

Value Judgments

Extreme cases grab headlines, but studies show that the majority of homeowners are happy living in association-run communities, and think deed restrictions help protect their property value.

Although that's a common belief among homeowner association residents, it is difficult to make a direct connection between deed restrictions and higher property values.

Comparing property values is an imperfect science, said Tim Wilmath, who oversees valuation for the Hillsborough County Property Appraiser's Office.

A 1,300-square-foot home built in the mid-1970s in Bay Crest Park, a deed-restricted community, sold last year for $234,000. A similar size home, built during the same time period, but in an adjacent Town 'N Country neighborhood with no deed restrictions sold for $185,000.

Across the county, in Temple Terrace, the opposite is true. A 3,000-square-foot home, built in the mid-1980s in a deed-restricted community near the Temple Terrace Golf and Country Club, sold for $365,000. Around the corner, on restriction-free Sleepy Hollow Avenue, a comparable house sold for $400,000.

Expect Trend To Continue

Whether there is a financial benefit to buying in a deed-restricted community, growth management officials say its likely new housing developments will continue to have restrictions and homeowner associations.

"They almost have to," said Joe Incorvia, Hillsborough County's community planning manager. "In fact, they're inherently flawed if they do not."

That's because stormwater requirements in the Land Development Codes, as well as the Hillsborough Comprehensive Plan, force developers to add amenities the county wants but won't pay for.

That includes parks, walking trails and stormwater ponds, all of which require maintenance. Steady maintenance requires a steady flow of money, and one of the easiest ways for a developer to get that money is to establish a homeowner association with yearly dues.

Municipalities could add and maintain these amenities on their own, Incorvia said, but it would come at a cost - a higher tax rate.

"There's really not an alternative," he said.