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It would seem that the majority of people who have had experiences with HOAs have encountered some kind of problem. In some instances, these problems are so bad that the people affected by them vehemently loathe any HOA.
Now, in theory, HOAs are a good idea, but the execution of their operations and power most often leaves much to be desired. Below is a list of 16 reasons why most HOAs are more trouble than good.
1. HOA Fees Vary in Amount and Inclusions
Whether you agree with homeowners’ associations or not, you are required to pay their dues if you purchase a home in a community controlled by one. The fees are typically several hundred dollars per month but can stretch into the thousands depending on the area’s housing prices.
Each HOA can set its own fees, so one house may cost you $100 in HOA fees, while a house in a different HOA will cost you several hundred. Furthermore, some fees may be “all-inclusive”, while others only cover very select things and you have to pay their fees as well as everything else (e.g., refuse removal, rates, etc.).
The dramatic variation in HOA fee amounts and inclusions is particularly frustrating when you are house hunting and trying to sell your house.
When house hunting, the best approach is to start with a set budget. But the confusing HOA pricing system can result in you thinking that a house is within your budget when it is not. You go to the trouble of calling about it or even viewing it, only to find out that you cannot afford it. It’s even worse when you fall in love with the house!
If buyers aren’t prepared to factor in HOA dues in addition to mortgage prices, the expenses could reduce their interest in purchasing the home. Some buyers dislike HOAs so much that it’s a deal-breaker, making it difficult to sell a home in a neighborhood with an expensive or demanding HOA.
2. Paying for Amenities That You Do Not Use
Though you may agree with some or most of the changes made by the HOA, it can be frustrating to be putting money towards something you don’t think should be there.
Sometimes, you will have to put up with paying for something that you do not need because you like a house in a certain HOA. For example, everything is great, except that you have to pay to maintain a tennis court that you will never use.
Perhaps you only live there part-time due to work or family. You will still have to pay every month for amenities that you might use when you are in residence in that home.
Then there is the chance that they can add an amenity. Maybe you hate to swim, and the money is getting put towards a new pool. Or you don’t have children, but the HOA decides to put money towards a playground. Not everyone in a community will find value in the same amenities, and this leads me to my next point.
3. You Are at the Mercy of the Majority Vote
It’s practically impossible to make everyone happy. Some people in a neighborhood may want it to be kept quiet, while others may want to add as many amenities as possible. If you strongly disagree with an idea that the HOA has, and everyone else wants it, you pretty much lose your voice and are forced to be putting money towards it.
If the HOA votes for new neighborhood development, such as the aforementioned pool or playground, then you have to pay the extra fees. You pay regardless of whether or not you want the improvement or alteration, and regardless of whether or not you have the financial capacity.
Remember that some changes will not just require a temporary development fee, they will also result in permanent maintenance fees.
These fees are also not tax-deductible in most states, including California, so you are on the hook to pay them, whether you have the finances to do so or not.
4. Refilling the Cash Reserve
If some renovation or upkeep uses up the reserve fund, then you can be hit with sudden increases in fees to try and replenish the reserve.
Reserve funds are saved for future planned projects but are also put aside for emergency cases. Unexpected damage to community spaces or amenity buildings can use up a large portion of the reserve fund. This leaves the HOA with less money in the reserve fund, and homeowners in the area will have to give more of their money in fees to make up for it.
If you find the reserve fund for projects unnecessary, it can be frustrating to fork over even more money in support.
5. HOA Fees Can Affect Your Mortgage
Whether it be monthly or annual, HOA fees are a financial obligation as a part of your homeownership.
This needs to be disclosed to potential buyers. If this is not disclosed when purchasing a new property, the price may be more than what someone is able to receive from their lender.
HOA fees are counted in your debt-to-income ratio. If your lender is providing you with the maximum mortgage loan before the HOA fee is taken into consideration, this could create problems in the approval process. In escrow, when a lender is holding a portion of your mortgage payment, an increase in HOA fees can mean going through approval processes all over again.
6. Some HOAs Have the Power to Foreclose on Your Home
If you don’t pay their fees, the actions an HOA can pursue against you can be frightening.
By law, a homeowners’ association can take action to foreclose on your home if you do not pay their fees. The HOAs approach to using this power can vary. They can function professionally, sneakingly, or threateningly.
The professional approach would be to ensure that you are fully aware of the penalty and when it would apply and then ensure that you acknowledge all lead-up events, giving you plenty of time to remedy the situation before it reaches foreclosure.
The sneaky approach might be used if the HOA is trying to get you out of the neighborhood. They will do things quietly until it may be too late for you to do anything. Now, there will obviously be rules in place to prevent full deception and sudden notice of foreclosure, but there are certainly ways that an HOA can bend or manipulate rules to their advantage.
Some HOAs will use foreclosure as a go-to threat each time your fees are late. This can be terribly upsetting, especially for someone who does not understand the process required for it to reach the point of foreclosure or for someone who is struggling financially or emotionally and this is why they are late on their fees.
The exact authority an HOA has over your property varies by state. In some, HOAs are granted lien or super-lien titles.
So, if you’re planning on protesting your HOA by refusing to turn over your cash, be warned that it will either be your money or your house.
7. Lack of Freedom in Your Own Home
Homeowner’s associations might make it seem like you’re paying them to give you restrictive rules about what you can do with your own home.
Are you considering adding to your home? Think again. Or at least hold off on getting too excited until you check in with your homeowner’s association.
HOAs can decide whether or not additions are allowed. If they are, they can regulate their appearance. It’s your home; you would think you would be able to decide whether or not to renovate. HOAs can take away the freedom you have to alter your living space, which might make it feel like it’s not your home at all.
Part of making a house your home is being able to choose its coloring.
HOAs often only allow a specific color set to be used on the outer walls, windows, and doors of your house (this could be part of why “cookie-cutter” neighborhoods are the way they are). Aesthetics are important to HOAs, so you’ll have to check what color your house is painted and make sure it’s done by a professional.
Many people are so fed up with all the HOA rules that they look for ways to legally annoy them.
HOAs regulate (to differing extents), the number of people you can have over at a time, when they can come, how long they can stay, and how many cars they are permitted between them.
You can read more in my article on Can HOA Restrict Guests (Know your rights).
8. Restrictions in Your Own Yard
HOA’s can be particular about what kind of landscaping is acceptable in the community.
Some HOA’s only allow certain kinds of fences, and some don’t allow them at all, which is particularly an inconvenience if you have pets or children you want to keep in the yard. Invisible fencing is an option, but not always ideal.
If you decide to put up a fence, it will usually have to be approved by your HOA first.
Homeowner’s associations can be picky about grass. They’ll likely require it to be kept well watered and won’t want it to be overgrown. Some HOA’s even specify the height of the grass or have designated mowing days so your lawn will match your neighbors!
Oh, and of course, you will probably only be allowed to mow your lawn at a certain time of the day or week to ensure noise pollution is kept to a minimum.
Vehicle restrictions made from HOA’s can be a complete pain. Your right to park vehicles that you own in front of your house may be taken away from you.
Most commonly, homeowners’ associations prevent community members from parking RVs or boats in front of their house. Some of them can be over the top with their regulations-telling you a car looks too old, banning certain types of automobiles, etc.
It’s rewarding to add a personal touch to your yard through planting and landscaping—unless you’re not allowed to get that personal at all.
Homeowners associations can create covenants that state the dos and don’ts of landscaping in the neighborhood. Examples include what kinds of plants are allowed, how many kinds of plants you should have, and more rules that take the fun out of gardening.
HOAs can also prevent you from cutting down trees and fine you if you do, even in emergency scenarios.
9. Pet Restrictions
To many, pets are considered family. It’s unsettling to think that an HOA could prevent you from keeping them in your home.
HOAs Can Limit How Many Pets You Own
Many homeowners’ associations set rules on how many pets you can have, and you are required to register them when you move into a home or get a new pet.
HOAs Can Limit What Kinds of Pets You Own
HOAs can set boundaries on what kind of animals you own. They can also prohibit certain dog breeds or dogs over a specific weight. The HOA could decide your pet is dangerous, even if they aren’t, and not welcome them in the community.
Cats are a commonly forbidden type of pet because it is difficult to keep them in your own yard.
Birds are also often banned because of the noise potential.
Can HOAs Make you get rid of Your Pets?
It’s unlikely that HOAs can flat out make you get rid of a pet, but if you violate the rules of animal ownership, they could take action. You could face a difficult decision between your pet or the neighborhood.
Probably one of the most common issues surrounding pets in HOA-governed neighborhoods is barking dogs. Your neighbors could get annoyed with this and complain. If this gets taken to the HOA, they can address the issue through board meetings and persuade you to re-home your dog or be fined.
Your cats deserve some fresh air without being put in danger. Thus, cat patios are great for balconies or to keep your pet contained in general.
However, homeowners’ associations often prefer aesthetics over practicality and can ban “catios” from a neighborhood. Your cats’ happiness and safety could be at risk if you aren’t allowed to install structures for their well-being.
10. Going Green – Forced or Denied
Whether you’re pro-environment on an activist level or think going green is a waste of time, homeowner’s associations can control the expression of your values.
Gardens and Composting
Growing a garden is not only rewarding but great for your health and the planet. If you’re passionate about gardening, it could be heartbreaking to find your community HOA shutting it down.
Homeowners associations can set regulations or bans on some, or all, kinds of gardens and compost bins. Often, HOAs’ reasoning for killing your fun is that they don’t like how your produce sanctuaries and compost look, an argument that is shallow compared to the benefits gardens bring.
For environmental goals, HOAs can require environmentally friendly lights (LEDs, motion-detecting, etc.) to be the only acceptable choice for your home.
If you don’t want to pay for pricey bulbs, you’ll lose even more autonomy over your home and money due to your HOAs’ rules.
11. No Option to Use Your Home as a Rental
The demand for rental properties and AirB&Bs is sky-high. Renting out a property allows you to earn income when you’re not staying there—a smart option for vacation homes.
If you purchase a property you plan to rent out and aren’t aware of the rules set by the HOA you’re in for many inconveniences. Rental properties could be forbidden in the community.
An HOA that does allow rental properties usually won’t allow you to handle it without their involvement. The majority will want access to the lease and will make you and the renter sign off on the rules.
Furthermore, even if you’re not living on the property, you won’t be an exception to the hefty fees demanded by the HOA. You could include some of these in the rent amount, of course, but it is yet another factor to weigh and decide on.
If you want to let your property out as a vacation rental because you only live in it part of the year, then you would be able to earn some extra income from this, and you would be able to deduct a portion of the HOA fees from your tax. However, HOAs are very strict and controlling when it comes to vacation rentals or air B&Bs.
12. All the Politics and Pettiness
Your HOA can develop a personal vendetta against you and make your life miserable in a completely legal way. If you have offended someone in the HOA or on the board, you may find your every step closely watched and any minor infringement or violation being punished to the full extent of the by-law.
You can also be forced to deal with rude HOA members and fights between other neighbors who object to ridiculous things that one does or does not do. In a non-HOA governed neigborhood, this would not be your problem. In an HOA, you may have to attend meetings, be solicited to get involved or sign a petition, etc., about something you have absolutely no interest in.
Of course, sometimes the most satisfying way to deal with pettiness is to engage in a bit of pettiness yourself. If you are looking for ways you can give your HOA a hard time in return, there are many to choose from.
13. HOA Board Members Are Often Unqualified
There aren’t any specific qualifications required to be a member of an HOA. You don’t want someone unqualified to make decisions about your living space, yet this is the most common situation that people find themselves in.
Sometimes, members join the HOA board for a personal agenda, not because they want the best for the community. Issues arise when HOA members push their beliefs too far and don’t obey fair or even legal obligations.
HOA members aren’t always master organizers or decision-makers. If they make mistakes, you’ll likely have to help pay for it in increased fees. With the over-the-top rules and restrictions imposed by HOAs, you would expect the people running it are at least fit for the job.
14. Private Companies Are Indifferent Third Parties
If your HOA is a private company, they might be qualified, but they have no skin in the game, so to speak, which means there is less chance of leniency or consideration of personal circumstances when making decisions that affect the residents.
Hiring qualified management can lead to better communication between the members and produce better strategies for the communities. However, professionals are unlikely to value resident’s opinions over logistics when it comes to making plans and changes.
Private companies need to be examined thoroughly before deciding to have them oversee the homeowners’ association. If their values don’t match the communities, it won’t be better than a resident-run HOA.
15. Having to Fight Them for Your Rights
If you have an issue with HOA rules, it is a tedious process to have your voice be heard. Even if they’re in the wrong, HOAs still have the upper hand in the fight. That being said, there are ways to win a battle with your HOA.
If you Don’t Know the Rules, You’re Going to Lose
It’s vital to know the HOA rules front and back, even if you disagree with them. As much of a nuisance they may be, it is considered your responsibility when you own a home in the community. It’s unlikely you’ll find respect when meeting with an HOA if you aren’t aware of their policies.
Power in Numbers
An issue is more likely to be resolved when more than one person is bringing it up. Talk to others in your community and see if they stand with you. That way, you can approach the board together, and they’ll take your argument more seriously.
16. You Can Be Liable for Previous Owner’s Unpaid Fees
If you buy a home in an HOA and the previous owner had fallen behind on their payments, then very often, in the eyes of the HOA and the law, you become at least partially responsible for paying the late fees! You can read more about this in my article: Unpaid HOA Fees From Previous Owner: Who Is Responsible?
Despite all of these reasons, HOAs are what you would call a necessary evil. They do most certainly serve a purpose, one for which there is no better solution at this current point in time.
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