Another unpleasant thing that can happen is that a lien may be placed on the property by the HOA, making it impossible to sell until the lien is removed.
HOAs are both good and bad. A few years back I lived in a neighborhood where the HOA was written into the home sales contract; you basically agreed to the HOA when you bought the house, and you also agreed to pass on the contract when you sold the house.
I always thought it was crap, especially when they did such things as get down on a neighbor who built a very attractive brick restraining wall in his yard. I can’t remember why he needed it, but he did, and he spent a fair bit of money and effort to make it look really nice. It didn’t matter; it had to go cuz it violated the rules. Neighbor got signatures from about 30 other people in the neighborhood, all of whom said “we think it looks pretty good.” Still, no go. He had to remove it.
Then I moved to an older neighborhood with no HOA. Come winter, the owner of the rental house that around the corner from us and bordered our property next to our driveway came and parked his camper about 2’ from our driveway. He came by and told us “don’t pile snow on it.” It was on his property so he was legally allowed to leave it there all winter. It was a major hassle not to pile snow on it; it was right in the middle of about the only spot available to us to put the snow from our driveway. Not to mention it was an eyesore. Every time I left the house the @#$#@ camper was right in my line of sight. At that point, I missed having an HOA that would have certainly restricted parking vehicles on your lawn for extended periods of time.
Both houses I have owned had HOA’s regs that were restrictions on the deed. At the first place the HOA was run by some real nazi’s and they would go around telling people to replace screen doors, tear out bushes and the like. The only run in I had was when some white pines that appeared to be on our property died and the jerks came by to demand that I have them cut down. I pointed out that they were on a 20 foot setback owned by the HOA and that they were welcome to cut them down. When they did one fell on our swingset and bent it, and I made them remove the old one and have a new one erected and installed at their expense. It made me very happy.
Ah, desdinova, I can see by your well-informed post that you must be in the same line of work that I am in (Title Insurance/Real Estate). Can you imagine the fun we would be together at cocktail parties? 
One other thing that no one has mentioned yet: if you are in a P.U.D., it is likely that you signed a P.U.D. rider with your mortgage. If so, you have agreed (with your Lender) to abide by the rules of your association and pay your dues if you have any. Should you not do these things, and your association slaps a lien on you, and your lender finds out… they can pay the lien, add it to your loan, and charge you interest/fees. This is to protect your lender from having a lien superior to theirs (which in some states an HOA lien can be). In short, trifiling with the HOA can get you in dutch in ways you never dreamed.
Also, if anyone has lived in South FL, they can tell you that the HOA’s are WAAAAY outta control. Most of them now require you to interview in person with board members before you may purchase in their neighborhood. And most of them will charge you for the privelegde of doing so (was $100 EACH for my boyfriend and I when I last bought a house there… and he wasn’t even on the deed!).
Hahaha… I’m a commercial real estate appraiser/economist. I’m not much of an expert in any single field of real estate, but I have to have a working knowledge of pretty much all of them.
Yeah, HOAs can be a real pain, and a lot of home buyers aren’t told nearly enough about what they’re getting into before they buy the house. I’m sure they disclose whatever they legally have to disclose, but I doubt they explain all of the consequences in enough detail for your typical buyer to make an informed decision about the HOA. Unfortunately, the only real solution is for every new homeowner to learn as much as they can about real estate so they can check all of this stuff out on their own…
I recall a story on CNN about out-of-control homeowners associations. In one example, a man refused to pay his $150 annual HOA fee.
After much legal wrangling the HOA foreclosed on his house and evicted him.
Why do you need the extra two feet?
I ask because a careful reading of the contract may offer a workaround. I’m neither an attorney nor a real estate expert, but I spent a year and a half doing administrative support for a property lawyer, and this kind of stuff came up quite a bit.
The thing is, most of these contracts are designed around the concept of acceptable appearance: colors, heights, designs, that sort of thing, to keep the neighborhood looking nice and thus feeling nice. If it’s something nobody can see from the outside, like the style of carpeting in your furnished basement, then usually nobody cares, and the contract doesn’t cover it.
So if the contract specifies only an external height to the building, you might also see if there are rules about digging in the yard, because it might be possible to sink the floor a couple of feet and get the interior height you’re looking for. The style of the shed makes a difference here, of course (a sunken floor makes the design of the door tricky, for example), and you’d need to read the contract carefully to make sure they haven’t included language to bar this sort of workaround.
Depending on your needs, this might be a good and legal compromise.