You’ve upgraded to that next level in life and just bought a beautiful condominium near all the downtown amenities in the city.

You finally have a balcony with sweeping views, perfect for dining al fresco. It’s so inspiring, you decide to begin replacing the deck tiles.

Then all of a sudden, in the middle of work, there’s a knock at your front door with a penalty notice from your condo association. Oops, you didn’t pay attention to your homeowners association rules.

If you’re just getting started looking for your first place, you may not know how a homeowners association, or HOA, can affect you if you buy a property in one of these groups.

In areas with shared facilities, such as a condo or a home in a development with a shared pool, for example, it boils down to a combination of HOA fees of maybe a few hundred dollars a month and shared governance. This may mean that you can’t paint your house the color you want, or that you can’t wait until after that trip to Europe to pay for a new roof.

Of course, if you love beige and want a pool without having to hire the maintenance company or pay for the whole thing yourself, an HOA could be a win for you. What you should do depends on your priorities and the community say our experts – a realtor and an attorney.

Read on for their tips, because it’s important to make an informed decision before you move.

“It’s a choice to buy in an area where it’s required to be an HOA member,” said San Diego realtor Jonathan Mack of Mack Real Estate Group. At least 80 percent of the area he serves adheres to some form of HOA.

What is an HOA?

Whether a beautiful single-family home with shared rec facilities, or a condominium with cool perks like a gym and a rooftop lounge, a homeowners association makes a lot of your choices for you – about common areas and even your own exterior. An HOA fee is the monthly maintenance charge you pay for that service and those facilities.

And these HOA fees have been going up, according to the real estate website Trulia. Over a recent 10-year period, the average HOA fee rose by 32% to $331 a month. And in the fanciest urban developments, well-heeled residents can spend five figures or more in HOA dues every year for a posh place with a doorman and more, according to the website Curbed. The fees can also go towards city services, insurance, pest control, lawn care and so much more!

Depending on what neighborhood you’re looking in, and whether you’re interested in a condo or a freestanding house, you may find your options flooded with different HOAs. In fact, just over half of all owner-occupied homes are governed by one of these organizations, according to HOA-USA, which runs an online directory of the groups.

Our Public Storage blog already covered the differences between condos and freestanding homes. It’s also worth keeping in mind, however, that because condos have more shared spaces, such as the same roof, hallways, elevators, even the same heating system ducts and driveway, HOAs can have a greater impact on condo buyers.

“If you want complete autonomy, go buy a house. Don’t go to an HOA,” said attorney Artin Gholian, who represents property owners.

HOA Rules – Study Before You Sign Up!

Bylaws vary from HOA to HOA, and it’s important to do your homework and read the HOA rules before you buy. The document to look for so you can start learning is the “declaration of covenants, conditions and restrictions”;, aka CC&Rs.

“What typically happens is the CC&Rs are so voluminous in text that people just ignore them and don’t read them,” says Gholian.

As a result, many homeowners with an HOA do not understand what they are allowed to do with their home and common space, he said. A new buyer who decides to paint his exterior a creative terra cotta could get a knock on the door and a violation notice before the first coat even dries. The buyer is breaking the rules without even knowing it and could face a fine and be forced to pay to repaint again.

“You don’t want the first encounter with your HOA board to be when they are approaching you for violating a rule,” Gholian said.

The CC&R can cover a lot, including whether you can dry your laundry outside or install a satellite dish, even the size and number of pets permitted in your home. Perhaps more importantly, it can even help you understand what part of the property is yours, to avoid a “misconception”, said Gholian.

In addition, you should also ask for financial documents going back a year or two, along with HOA board meeting minutes for the same time frame before you decide to buy, Gholian says. These can help you discern how decisions are being made and what issues may be coming up over time that you may also face. You should also consider attending a board meeting to see how well the group members works together.

Mack tells clients that some HOAs follow bylaws strictly, while others may be lax in enforcing rules.

HOA Fees – How Are they Set?

HOAs set their fees annually, a decision made by the HOA board with input of the property manager, if there is one, Mack said. It’s important to be aware that sometimes fees go up.

“It’s based on how much money they anticipate they’re going to need to fulfill not just their current budget, but also their future budget,” Mack said.

HOAs can apply additional assessments, or worse, emergency assessments because, for example, they neglected to implement the reasonable incremental annual increase for a new roof, for example.

Good HOAs plan for the future, Gholian said. Typically, those HOAs place about 10 percent of what is collected from monthly assessments into a reserve account, a fund that will function for those big-ticket infrastructure projects, like roof replacement.

HOAs: The Good and the Ugly

We’ve touched on some of the pros and cons any new homebuyer might encounter with an HOA. Put another way, you are asking a group of people to collaborate on decisions affecting what is likely each person’s largest single investment. And even if you are on the HOA board, you are likely going to be overruled by the group at some time during your stay, probably more than once.

For Garrett Smith, who recently moved with his wife and 1-year-old daughter to the town of San Marcos from nearby Downtown San Diego, buying in an HOA recently was a win. He really enjoys the new family-focused community, where the HOA organizes neighborhood block parties, wine tastings, playgroups and movies in the park.

And he loves the amenities: views of rolling hills, a large park, in a planned development near the town center with a mix of residential and retail.

Smith added that there were negatives that included the additional costs and lack of freedom to customize their house or landscaping. There’s also always the potential, in the back of his mind, for mismanagement of funds or differences in priorities that could rack up added costs with no extra value for him.

But still, he’s loving his new pad.

“Knowing that the value of the house isn’t going to dramatically drop due to lack of upkeep is another pro,” he said.

For more information about HOAs, consider visiting the Homeowners Protection Bureau.