Key Takeaways
- With an HEA, you still own your home, so you are responsible for maintenance, repairs, insurance, and property taxes.
- Maintenance rules exist because the provider’s return depends on your home’s future value. If you neglect upkeep, your home may be valued lower.
- If you do not follow the upkeep requirements, you will usually not lose your home. However, you may have to make repairs, face stricter terms, or pay higher buyout costs.
Home equity agreements (HEAs) are appealing because they let you get cash from your home’s equity without monthly payments. But it is important to remember that you still own the home and must maintain it. Your home’s condition affects its value, so most HEA contracts have specific maintenance rules. Understanding these rules in advance can help you avoid unexpected costs or issues when it is time to settle.
In this article. (Skip to...)
- HEA maintenance rules
- Common maintenance requirements
- Inspection rights
- Maintenance and settlement value
- Contract review checklist
- FAQs
Why do HEAs have maintenance rules?
HEAs have maintenance rules because the provider’s return depends on your home’s future value, not just on regular payments like a traditional mortgage. The settlement amount is based on your home’s value at the end, so if the home is neglected or damaged, its value drops, increasing the provider’s risk. That is why HEA contracts usually require you to keep the property in good shape and handle major repairs.
The most common home maintenance rules in HEA contracts
HEA maintenance rules vary by provider, but most contracts organize them into a few main categories focused on protecting your home’s condition and long-term value.
Check your home equity options. Start here1. You must keep the home in “good condition”
Most HEA agreements ask you to keep your home in good condition. This means fixing major problems before they get worse and not putting off repairs that could lower your home’s value. You do not have to renovate or update the home, but you should address serious issues such as a leaking roof, structural damage, or safety hazards as soon as possible.
2. You’re responsible for repairs and upkeep
Even though an HEA shares your home’s equity, you are still fully responsible for all maintenance and repair costs. HEA providers do not cover routine maintenance or unexpected repairs because the agreement is an investment, not a co-ownership arrangement.
You are generally responsible for:
- Roof repairs
- HVAC replacement or servicing
- Plumbing issues
- Termite treatment or remediation
- Structural repairs
- Water damage cleanup
- Other ongoing maintenance needs that affect the home’s condition
3. You must keep homeowners' insurance active
HEA contracts almost always require you to maintain active homeowners’ insurance throughout the term of the agreement. In some locations, additional coverage such as flood or wildfire insurance may also be required. This protects the property’s value and reduces the provider’s risk in the event of a major loss.
4. You must keep property taxes current
Like a regular mortgage, HEA agreements require you to keep your property taxes up to date. If you do not pay them, tax liens can take priority over other claims. For the provider, unpaid taxes pose a significant financial risk and are typically considered a serious breach of the agreement.
5. Major renovations may require notice or may affect the buyout calculation
Many HEA contracts include rules on major renovations because major improvements can change your home’s value and the provider’s share at settlement. If you plan large projects like an ADU, a full remodel, or major structural changes, you may need to give advance notice, show project costs, or follow a set method for adjusting the home’s value.
What happens if you don’t follow maintenance rules?
If you do not follow the maintenance rules in your HEA, the provider can take steps to protect their investment. Depending on your contract, they may require you to make repairs, lower the home’s value at settlement if it is in worse shape, or treat serious neglect as a default.
Usually, you will not lose your home if you fall behind on maintenance. But you might get a lower appraisal, face stricter settlement terms, or have a harder time paying off the agreement if your home’s value drops. If your home is clearly neglected at settlement, your provider can take steps to protect themselves.
Can HEA companies inspect your home?
Some HEA contracts let the provider inspect your home, but only in certain situations. This might include an inspection at the start, a check for concerns about damage or neglect, or a visit before a buyout, refinance, or sale. Providers do not usually conduct regular or annual inspections, but they can check the home’s condition when needed, as their return depends on its value.
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How maintenance affects your HEA settlement value
Maintenance directly affects your HEA settlement because most agreements use a property valuation or appraisal at buyout, sale, or the end of the term. If your home shows neglect, delayed repairs, or damage, the value may be lower, or the provider may look more closely at the property. A lower appraisal might seem good at first, but it can cause problems if your contract has standards or repair requirements. Poor maintenance often leads to delays, extra repairs, or a more difficult settlement process, since the provider’s return depends on your home maintaining its value.
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What to review before signing an HEA
If you want to check HEA maintenance rules quickly, here are the main things to look for in the contract or to ask the provider:
Check your home equity options. Start here- What does the agreement define as “good condition”?
- Does it require specific repairs or standards?
- Are there inspection rights?
- How are renovations handled?
- Does the provider share in improvement value, and if so, how?
- What happens if the home is damaged by fire, flooding, or another event?
These details matter. Over a 10- to 30-year agreement, they can affect your experience.
Ready to move forward with an HEA?
Before you sign a home equity agreement, make sure to review the maintenance rules as carefully as the payout terms. You still own and control your home, but you are fully responsible for upkeep, repairs, insurance, and taxes during the agreement. If you know how maintenance, renovations, and appraisals affect your future settlement, you can decide if the trade-off between upfront cash and ongoing responsibilities works for your long-term plans.
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FAQs about HEA home maintenance rules
You are still fully responsible for taking care of and protecting your home. Most HEA contracts require you to keep your home in good condition, maintain insurance, pay property taxes, and handle repairs that affect its value. Even without monthly payments, you are still the homeowner and must follow the maintenance rules in the agreement.
Some HEA contracts require you to give notice or provide documents for major renovations, especially if the project will change your home’s value, like additions, full remodels, or structural upgrades. The provider may want to see records of costs or use a set method to separate owner-funded improvements from market gains. Small cosmetic updates usually do not need approval, but always check the contract before starting big projects.
If your home is damaged by fire, flooding, or severe weather, you are still responsible for repairs and insurance claims. Most agreements require you to keep enough insurance and use any claim money to fix the property when you can. Because the provider’s return depends on your home’s condition and value, any damage that is not fixed can affect future value, settlement timing, and costs.
Yes, deferred maintenance can make selling more difficult because buyers, inspectors, and appraisers will factor the home’s condition into pricing and financing decisions. If the property requires significant repairs, you may receive lower offers, face a longer time on the market, or encounter repair requests at closing. That can also complicate the HEA settlement, since the final value used in the agreement is tied to the home’s sale price or valuation.
