Why Do HOAs Exist: The Necessary Evil


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HOAs maintain common areas in a community, so they aren’t neglected or fought over. HOAs protect and promote neighborhood property values by installing desirable amenities and controlling the aesthetics the properties and community at large. HOAs foster harmony among residents by establishing common rules.

Almost nobody to whom I have spoken has gushed about their HOA and how marvelous they are. Instead, a mention of these institutions is enough to send even the most placid of homeowners into a raging soliloquy of the evils of HOAs.

Despite their poor reputation, HOAs were actually developed as a very positive, neighborhood-enhancing idea. Beyond just the idea, though, people do truly benefit from HOAs; it’s just not always in the ways that they would like and these benefits can quickly be overshadowed by the drawbacks connected to living in these communities.

HOAs Exist for 3 Main Reasons

HOAs serve many functions, which we will discuss shortly. However, their functions can be grouped into three purposes, which are what make HOAs a necessary evil—one that cannot be ignored.

While there are many reasons why HOAs are bad, these three purposes of the HOA show that they exist primarily to benefit the members of the community. Sometimes the execution of the functions to achieve these goals is poor or excessive, but at the root of it, HOAs are supposed to be a positive institution.

1. Manage Shared Areas Within a Community

HOAs manage and upkeep the shared areas in a community. Any area that falls outside your property and is accessible to everyone living in the neighborhood is the responsibility of the HOA. Right from hiring certified professionals to ensuring the work is completed on time, the HOA is in charge of it all.

Business Team Brainstorming Using Color Lab

HOAs ensure that the areas around your house always look their best for the enjoyment of the homeowners and to promote healthy property values (more on this in the next section).

Without HOAs, common areas would otherwise be neglected or become a point of contention between neighbors who had differing views regarding what should be done with them, who should care for them, etc.

2. Protect and Promote Neighborhood Property Values

HOAs protect and promote the property values in the neighborhood.

A house will slowly lose value as it gets older as a result of natural wear and tear. Renovations, upgrades, and regular maintenance help to stave off this depreciation and make your house an investment. However, it’s not just your property that determines how much your house is worth. It is also the condition of the properties surrounding yours and the state of the neighborhood.

If you have hawkers setting up stands at the end of the road, or the belt of empty land running adjacent to the street is overgrown and littered, then your house can be as pristine and polished as the Palace of Versaille and you still won’t get your asking price. The same applies if your neighbor hasn’t painted their exterior walls since moving in fifteen years ago and they have old washers and boxes piled in a corner of the front yard.

Real-Estate-Agent-in-Front-of-Blank-Sign-and-House

Property values are one of the main driving forces for why HOAs are so ruthless when it comes to imposing strict provisions that regulate the exterior appearance of homes within the HOA-regulated premises. It’s very inconvenient when you cannot paint your house the color you want or when you get fined because your grass is too long, but think of all the ways that this same principle protects you and your investment.

Property values are also protected by the security that an HOA provides. Whether it’s key-card access booms or patrols from a reliable security company, safety is paramount to most buyers, and the HOA-organized security is a selling point for homeowners. Not to mention, you benefit from the presence of these measures while you live there.

When every home within the community looks good and is well-maintained and there is visible evidence of high-security measures, then the neighborhood property values remain stable or even increase. Thus, with steely resolve, your HOA protects the price of your property. This is why a home in HOA-regulated property sells faster than non-HOA communities.

3. Prevent or Mediate Neighbor Disagreements

When people live together in relatively close proximity, then there’s a chance of occasional (and in some cases, frequent) disagreements due to natural differences of opinion and lifestyles as well as plain old petty behavior. HOAs act as a mediator between neighbors to prevent these discords from escalating. They will attempt to make sure that the matter is resolved quickly, effectively, and amicably.

So, whenever there’s any disagreement, the HOA tries to find the middle ground to ensure that all members of the neighborhood, who are vastly different from each other, coexist in relative harmony in the community. Unfortunately, the middle ground seldom makes anyone happy, but they’ll accept it as long as the other party is also unhappy.

Sad Blonde Young Woman Looking At Neighbor Man Quarreling

One big advantage of having your HOA officially intervene is that general troublemakers will be discouraged from causing any unnecessary problems and spoiling the peace of the neighborhood.

Functions of HOA to Manage Shared Areas

All homeowners in an HOA pay HOA fees. These are legally permitted as they fund the management and maintenance of common areas, facilities, and services. The amount will be mentioned in the governing documents that are given to you when you purchase a home.

The fees also contribute to the build-up of a kitty, which is used for minor repairs that arise unexpectedly, another thing that you also don’t have to worry about.

Sometimes, the HOA fees are used to pay for “in-house” handymen, security personnel, concierges, superintendents, etc., depending on the nature of the HOA you are living in.

The upside of paying these HOA fees is that there is less work and admin for you in the process. The downside is you have to pay regularly, not just when you can afford it. Furthermore, you have no say over where your fees are allocated in the community.

Regular Maintenance

The majority of HOA fees go towards things like:

  • Watering and tending communal flower beds and gardens.
  • Keeping the pool clean.
  • Maintaining tennis courts and other sporting facilities.
  • Re-painting parking bay lines, boudary walls, community entertainment areas, etc.
  • Repairing potholes and loose pavement bricks.
  • Keeping sidewalks and driveways clean and clear.
  • Maintaining playground equipment in a safe and weatherproof state.
  • Servicing lifts.
  • Running gym facilities.

The HOA remembers and schedules when to do these things, hires people to do them, oversees the jobs, and makes the payment.

All these facilities and services can make living in the HOA really great. You have a swimming pool that you never have to scrub clean of algae or remember to chlorinate. You have a tennis court that you didn’t have to shoulder the full cost of installing. You have a safe place for your kids to play and make friends. And when you want to go for a nice stroll down the avenue, you are assured of pretty views and a certain measure of security.

Piggy banks of gradually increasing size

However, there are obvious downsides to the collection of HOA fees for this maintenance. Firstly, you cannot postpone paying for a job if you are short of funds for one particular month. You still owe the full fee. Secondly, you will be paying to upkeep amenities that you might not use.

Repairs or Replacement

HOAs are also in charge of repairs that arise (mostly in the communal areas). Even if they are not allowed to make the repairs because it is state property, then they will contact the municipalities or whatever other government organization needs to be contacted in order to sort the problem out.

I mentioned a kitty earlier. This “just in case” fund can be used for minor repairs that arise, like a pothole that needs to be filled in or an irrigation head needing to be replaced. However, if the HOA does not have a large kitty or if the repairs are extensive, then the HOA can levy a special assessment to cover the difference.  

It can be quite distressing to all of a sudden have to pay for a new boundary wall because the old one had a compromised foundation that no one was aware of until the wall collapsed. Once again, you have to pay now, regardless of if you are financially capable of covering the assessment, and it is often not just a once-off payment but rather a monthly increase for a certain period.

There are, of course, benefits to this function of the HOA. Firstly, you don’t have to take a day or more of work to arrange for people to come in and make the repairs, oversee the work to ensure that it is done nicely, and follow up if there are any issues. HOAs are expected to make sure all repair work and replacements happen on time without causing too much inconvenience to the residents.      

How HOAs Protect and Promote Property Values

There are two main ways that HOAs protect and promote property values: installing and maintaining modern amenities and maintaining curb appeal.

Modern Amenities

Amenities and facilities are a huge draw for potential buyers. Who wouldn’t want to live in a neighborhood with access to the swimming pool, gym, game room, etc.? It becomes a thing of pride to be able to tell your friends that your community has so much to offer.

HOAs should invest time and money to ensure that all the amenities are operational and well-maintained. It would be great to upgrade amenities like adding the latest fitness equipment to the gym or building a pool just for the kids next to the community swimming pool.

To boost the property value, HOA can add something rare unusual like a movie theatre or an infinity pool on the terrace. This will become a USP (unique selling point) and will surely drive the sales up.

With each additional amenity, however, comes the cost of upkeep, which is added to your HOA fees. Furthermore, installing a new amenity will likely form a new additional assessment that will be charged monthly for a certain period of time, and all of this happens even if you do not use the facility or vote against the new installation.

Maintaining Curb Appeal

The adage “the first impression is the last impression” is so true when it comes to your community. When potential buyers enter through the gates, they should be enthralled by what meets their eyes. The view should be breathtaking and should instantly appeal to them.

New American luxury single family home neighborhood

There are small things that your HOA must do to make sure that your community is a desirable choice in the real estate market. Given below is a list of things that HOA must do to maintain and increase the curb appeal.

  • Installing a strong gate – Entering through a big and sturdy-looking gate gives the impression that this is a safe and secure gated community.
  • Maintaining the landscaping – Nothing is more appealing than being welcomed by the sight of freshly-cut grass and beds of beautiful and colorful flowers. HOAs must look after the landscaping and maintain it regularly.
  • Keep it clean – From regular cleaning to periodic power washes and deep cleaning, HOA must make an effort to keep the community neat and clean. No refuse bags or bins should be left lying around. Residents are not permitted to store things like old couches, washers, boxes, etc. where they can be see by others.
  • Appealing fences – HOAs control the type and size of fencing that you can erect around your property. Chainlink or chicken mesh are not going to be on the list of approved fencing materials because they are just not pretty.
  • A fresh coat of paint – Adding a fresh coat of paint should be in the HOAs annual budget plan. Painting the community and the exterior of homes will make a huge difference. No one likes the look of peeling paint.
  • Proper light – A well-lit environment makes a neighborhood safe and also adds to the aesthetic appeal of the place.
  • A green community – Most people will appreciate an eco-friendly community. So, making efforts like installing LED lights, having the facility waste recycling, opting for solar power, etc., are ways an HOA can make your neighborhood planet-friendly.

In their efforts to maintain curb appeal, HOAs charge fees and enforce rules that not everyone is happy with. Getting into trouble because you just bought a new fridge and haven’t had a chance to properly dispose of the box that is sitting on your porch can be frustrating. Particularly if you are a generally tidy person and have every intention of sorting it out at the first opportunity.

Ways in Which HOAs Keep the Peace

One of the pluses of living in a planned development is the diversity that comes with it. You are living amongst people with different cultures and different ways of living. This allows for meeting some interesting people but sometimes the differences can create conflicts.

One major responsibility of your HOA is to maintain the peace and integrity of the neighborhood. For this reason, HOAs implement certain rules to ensure there are no disagreements and no one is getting inconvenienced.

Noise Control

In most communities, the maximum numbers of complaints are about the noise level. This makes sense right? What’s music for me could be noise for my neighbors. HOA noise restrictions are there to limit noise-related conflicts between neighbors.

Impassive meditating young businessman paying no attention to people on megaphones

Sometimes noise complaints are also about the barking of the dog or too much squeaking of the hardwood floors. To handle such situations, your HOA can implement rules like making 80% carpet mandatory, no loud music after a certain time, etc.

Noise restrictions are put in place with good intentions. Everyone has the right to enjoy a quiet time and nothing should disturb the peace. But sometimes, these rules are so strict that it becomes impossible to throw a party in your own house.   

Limits for Huge Gatherings

Your HOA will not likely limit the number of day guests that you have, nor the size of a party unless that party is being held in a communal area. However, they are very strict on the number of cars that can be parked in the community.

By limiting the gathering to a certain number of cars and the people that can fit in your house, the HOA indirectly bars huge gatherings, which can get loud and disturbing to neighbors. Furthermore, HOAs can have an enforceable end time for parties, usually coinciding with the “quiet times” dictated by the HOA.

Entertaining your guests in the common area during the weekend or the holidays, when other homeowners might want to use the common area, might be restricted.

Pets

The objective behind HOA pet restrictions is to make sure all the other members of the community feel safe with having a pet in the neighborhood and no one’s life is disrupted in any way by their neighbor’s pet.

The pet restrictions clearly outline the HOA policies regarding the number of pets, removal, and elimination of pet poop, vaccinations, putting the leash on the pet when in the shared area, and barking. All these rules ensure that no homeowner is inconvenienced or feels uncomfortable by the presence of a pet.  

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What can get annoying is when HOAs restrictions stop you from keeping a certain breed of dog or owning a cat. You might have two dogs but if the policy dictates one dog per home then you have no choice but to find your furry friend a new home.

Parking

Parking spots are precious and people are quite sensitive about theirs. So, naturally, sometimes disagreements happen over it. There are strict rules about the location of parking a vehicle. There are clear demarcations set so that residents park only at the space allotted to them.

HOA rules prohibit the parking of certain types of vehicles that may compromise the beauty of the neighborhood like junk vehicles, trailers, boats, etc. There are also restrictions on the parking of the guest vehicles. HOA rules state that guests’ vehicles will either be parked in the owner’s space or the allotted visitor’s space.

Building a Happy Community

It’s not all about creating and enforcing rules when if comes to HOAs creating harmony among neighbors.

HOAs plan holiday parties, picnics, and events that bring neighbors together and give them a chance to know each other. This bonding helps all the homeowners to resolve disagreements quickly and they willingly come together towards a common goal like renovating the tennis court or adding a new amenity. 

Sources

https://www.investopedia.com/terms/h/hoa.asp

https://www.investopedia.com/articles/mortgages-real-estate/08/homeowners-associations-tips.asp#:~:text=Many%20residential%20communities%20have%20a,also%20encounter%20the%20HOA%20structure.

https://www.creditdonkey.com/why-hoa-good.html

http://www.wilmingtonbiz.com/insights/mike_stonestreet/three_primary_responsibilities_of_your_hoa%E2%80%99s_board_of_directors/2870

http://www.devoredesign.com/2018/04/17/simple-ways-an-hoa-can-go-green/

https://www.nolo.com/legal-encyclopedia/what-owners-can-do-if-hoa-common-areas-are-not-maintained.html

https://www.nolo.com/legal-encyclopedia/homeowners-association/hoa-common-areas–rules-restriction-use.html

https://kuester.com/3-ways-hoas-can-protect-property-value/

https://www.usa-shade.com/resources/articles/how-to-increase-hoa-neighborhood-and-property-value

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