Understanding HOAs: The Pros & Cons

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By Clever Real Estate Updated February 8, 2023


Some people love the idea of living in a neighborhood with a homeowner’s association (HOA), and others can’t stand the idea. Find out why HOAs are so popular and why neighborhoods form them, along with the drawbacks that cause some to hate the idea.

Aerial view of a neighborhood. Neighborhoods often have an HOA.

Are you looking at a home in an HOA neighborhood? If so, you may have heard warnings and horror stories from some, but praise and great accounts from others. How you’ll feel about it will depend on the rules of that specific association, who is on the board, and if you prefer additional benefits or freedom from restrictions.

Whether you want to live in an HOA area or are more interested in a home that has no restrictions, a Clever Partner Agent can help you find what you’re looking for. Contact Clever to connect with a top-rated buyer’s agent to guide you through the process.

What is an HOA?

A homeowners association (HOA) is an organization that enforces rules in planned communities, neighborhoods, and condominiums. It is made up of a board of community members in charge of keeping the neighborhood looking nice and the shared amenities in pristine condition. The community members pay dues to the HOA to help keep the neighborhood in the desired condition.

A planned community that has an HOA may have perks such as manicured lawns, resort style pools, and community gatherings for big holidays. Sometimes a regular neighborhood forms an HOA so they can enforce cleanliness standards and other rules.

Homeowners within HOA boundaries also agree to keep any rules set forth by the HOA and pay a fine if they break them. In some HOAs these rules can be very restrictive about what homeowners can or can’t do with their properties.

Why Do HOAs Exist?

Developers started to create planned communities in the first half of the 20th century, but they originally weren’t popular with homeowners. At the end of World War II, however, large cities became overpopulated and homeowners needed other options outside of the city centers.

The development of planned communities focused on giving many homeowners a shared common area. After the 1960s, planned communities became popular and led to the creation of private developments built by private developers.

The developments wanted some way to keep the neighborhoods orderly, and this led to private organizations known as homeowners association. Over time, HOAs have expanded beyond planned communities into neighborhoods of all kinds.

How Does an HOA Work?

The HOA board is an elected board of directors who oversee the HOAs governing documents and other responsibilities. Association board members are members of the community, although sometimes the HOA is governed by an off-site property management company.

This HOA board governs the planned community or neighborhood, which may have single-family homes or multiple units such as condominiums. HOAs enforce the rules regarding properties within their jurisdiction.

Governing Documents of an HOA

The governing documents of an HOA outline the rules of the community; this is called the declaration of covenants, conditions, and restrictions. This details certain rules that owners must follow while living in the community.

The HOA governs all amendments to the governing documents. HOA rules can include proper pool etiquette, lawn appearance, the color of your home, fence height, and more.

If you buy a home that is part of an HOA, the seller is required to give you the written rules of the community before you finalize the home sale.

Can Police Enforce HOA Rules?

Police have no jurisdiction with enforcing HOA governing laws because the charges are not criminal. If it is a civil matter, you can settle it in small claims court.

How Do You Get Rid of an HOA?

An HOA can be dissolved. You need the majority vote of homeowners within the HOA.

This is difficult to do, however, because usually at least some members of the neighborhood benefit from the HOA. The benefits of an HOA can be brought up, and it may take strong persuasion to convince the majority of the homeowners they don’t need the association’s protections.

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What is an HOA Fee?

HOA fees are collected monthly or annually. These association fees pay for the upkeep of common areas like parks, tennis courts, the clubhouse, swimming pool, and elevators. They also compensate the HOA for enforcing the neighborhood rules.

The average homeowner will pay HOA dues of $200-$300 a month or a lump sum one time annually.

HOAs also have reserve funds for large repairs or so in an emergency, they can rebuild If something happens that the reserves don’t cover, the homeowners may be assessed a special fee to cover it.

The board of governors monitors all fees and is responsible for the management of those funds.

What Happens if You Don’t Pay HOA Fees?

You must pay the HOA dues if you live in an area governed by an HOA. That’s why there are disclosure rules when you buy an HOA home that help protect you. However, be sure to do your own due diligence. Not all HOAs are easy to work with and live within.

If you break the rules, the HOA can impose additional fees on you. The association can even put a lien on the property if the homeowner falls behind in paying their dues. A homeowner opting not to pay isn’t advisable, because HOAs can take legal action against you.

Can An HOA Evict a Homeowner?

HOAs can evict homeowners for delinquency in fees — but only if this rule is in the governing documents. All violations should be checked against the governing documents. You can get these documents from your real estate agent before you buy a home, or from the association board once you live there.

Are HOA Fees Deductible?

HOA fees are not tax deductible unless the homeowner is renting the home out to another family. If the homeowner rents the home, then they can deduct the HOA fee for the period that the home is rented out.

HOA Benefits

Some homeowners love living within an HOA. They enjoy the fact that the neighborhoods are more orderly and that they have recourse if someone is causing trouble or not maintaining their home.

Sometimes an association will also take care of chores like lawn mowing and snow removal, which can be a huge benefit to those that live in the area.

Finally, if there are community amenities, someone has to maintain them. When there is a responsible HOA, the amenities are in great shape and it’s easy for those who live in the neighborhood to take advantage of them.

When communities maintain a certain level of quality and pristine conditions, home values often stabilize and sometimes resale values increase. The Community Association Institute reported that 90% of homeowners say their association has protected and increased property values.

HOA Disadvantages

You may hate the idea of living in an HOA. First, the HOA fee adds to the cost of living in that area, on top of the regular home maintenance and other steps you need to take.

Also, some people feel that if they own their home, they should be able to customize it however they like. If they want to paint the house electric blue, they feel they should be able to. People who want to customize their home may find an HOA neighborhood too restrictive for them.

The biggest concern people have about an HOA is that the governance is only as good as the HOA board members. Unfortunately, many people feel that only "busybodies" end up on the board because the average homeowner in the neighborhood doesn’t have time to take part.

If a nosy or petty group of people join the board, or the board favors certain homeowners above others, the HOA can quickly become intolerable even if it was once easy to live with. The best advice is to get involved yourself if you feel things aren’t going well.

Your Rights When Living in an HOA Community

Poor HOA management can make homeowners feel like that don’t have rights, but the association is not above the law. HOAs are bound by the rule of law just like any other association.

The laws that affect property owners in an HOA vary from state to state. However there are some issues where all states have the same rules.

The association cannot discriminate, fine you against the governing documents, decide secretly, hinder your ability to install and use a satellite dish, restrict plants, or restrict the homeowner from suing the association.

It’s important to understand that you can protect yourself from homeowner associations. It is imperative to know your governing documents and your rights inside your HOA regulated community. Otherwise, you may be vulnerable to outlandish fines set forth by the association.

Some people wonder, "Can I sue my HOA for harassment?" The answer is yes. Keep in mind, however, that you signed up for these rules and must abide by everything that you agreed to. If you want to sue your HOA, talk to a lawyer who has experience with HOAs.

Make Your HOA Decision Wisely

If you’re in the market for a home, learn if the area has an HOA and what the specific rules of the neighborhood are. Working with the right agent is essential. Clever can connect you with an experienced home buyer’s agent who can help you buy a home you’ll love for years to come.

If you’re tired of your current HOA and you’re ready to move, you need a skilled listing agent who can help you sell quickly and for top dollar. The best part about working with a Clever Partner Agent is that you’ll pay only 1.5% .

Whether you love the idea of an HOA or want to avoid them, your Clever Partner Agent can help. Get in touch with Clever for more information today!

Top FAQ’s About HOAs

What Does an HOA Cover?

Generally, an HOA takes care of the maintenance of common areas such as a swimming pool, along with repairs on multi-unit buildings and other expenses shared by those in the neighborhood. In some areas this includes mowing and snow removal. Be sure you review the HOA documents carefully so you understand what you’re paying for.

Can an HOA Raise Fees?

You may pay additional fees to the HOA under several conditions. There may be a special assessment if there wasn’t enough money to pay for specific expensive repairs. Or, the association may vote to increase the overall fees. This vote includes all the homeowners in the HOA, so the majority must agree the increase is needed.

Can You Refuse to Pay HOA Fees?

If you live in an HOA, you are legally required to pay the fees. If you don’t, the HOA can put a lien on your home and even foreclose on you. If you aren’t happy with your HOA, the best way to make a change is to get involved on the board or to contact a Clever Partner Agent to sell your home so you can move into a different community.

Do You Have to Join an HOA?

If you are moving into a neighborhood that has an existing HOA, then you are required to sign off on the HOA documents when you close on the home. However, if you live in a neighborhood that doesn’t have an HOA and your neighbors are trying to create one, you are not required to take part.

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