Homeownership is subject to community regulations. Established laws determine the permissible and prohibited activities in your community. Therefore, understanding these rules is essential when buying a home. Here are some key aspects to consider before settling in any community.
Property and Land Use Laws
Many areas have property and land use laws, which govern who can own the home and how you can use the land. That includes factors related to what you can do on the property, like running a business from your home or storing your RV in your front yard. Local zoning laws are essential to understand because they also differ within communities. Your real estate agent can help you to learn more about them.
Local Tax Laws
Local tax laws differ significantly across regions. In some locales, a fraction of your income tax contributes to community improvements such as roadway maintenance, school upgrades, and political salaries. The exact amount you'll owe depends on your specific location. However, you can research the local tax codes and associated costs for any property before purchasing. Contact the city officials, real estate agents, or local taxing authority for detailed information.
Homeowners Association Rules
Buying a home in a homeowners association (HOA) involves abiding by a unique set of rules that can substantially differ from other areas in the city. Many HOAs regulate changes to a home's exterior, such as paint color and flag display. Some even restrict the resident's age, designating areas exclusively for individuals over 55. Before purchasing in an HOA, thoroughly research and understand these rules. Also, inquire about any HOA fees for which you would be responsible.
Environmental and Natural Disaster Laws
Most states have rules in place to minimize environmental and natural disasters. If you buy a home within a designated area that's a wildlife habitat or near a stream, you may be required to maintain your property in specific ways to minimize any damage to the local environment.
Many times, you will be limited to the small things, too. In some communities, for example, feeding wildlife is considered illegal. You cannot capture rain in a rain bucket or have standing water in other areas. You may not be able to dispose of chemicals down the drain. You can learn more about these requirements by investing in local research and turning to your city. Most cities have these laws on the books, which means you should be able to research them online.
Renting and Subletting Laws
Many communities have restrictions on whether or not you can rent a property and who has to be alerted if it is. For example, you may need to alert the city that you are renting the property out instead of living there yourself. If you plan to use your home as a short-term rental, you must verify that this is an allowable process within your area. Some communities, and especially homeowners associations, restrict this. The key here is to understand your local codes and ask questions before you decide to open up your home to others.
Disclosure and Inspection Laws
You'll likely need to obtain a permit whenever you are working to update your home. It applies to most types of electrical and plumbing work but also any type related to the property's structural integrity, such as the roof, foundation, or walls. In most situations, the reasoning is to follow local building codes to help keep property secure and safe. You may also have to pay a fee to have a permit available for a professional.
Remember that most lenders mandate full disclosure of a property's condition, usually necessitating a home inspection. While state and local authorities generally do not require this, lenders insist on it to safeguard their investment in the property. Conducting inspections is also in your best interest as it helps ascertain the home's safety and whether it is worth the asking price.
Closing Process and Costs
Many states impose restrictions on the home closing process, dictating the timelines and precise steps needed to document the closure properly. This process encompasses the transfer of the title from the seller to the buyer and recording the mortgage lender's lien on the title.
Though you can frequently negotiate costs with your lender, they might require you to settle the home's taxes before assuming ownership. To better understand your local area's prerequisites, consult your local title bureau or a real estate agent.
Takeaways
Owning a home provides many benefits, but there are many situations where the laws in one city differ significantly from those in another. It's up to you to know the differences before buying your home.