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In theory, a homeowners association (HOA) is a great idea: Property owners in a neighborhood banding together to share expenses and enforce a few simple rules that will improve their quality of life—and their property values.
But there are downsides. There are so many HOA-related horror stories, you may be reluctant to bind yourself legally to one in the first place. Like a lot of tedious activities that take a lot of time and effort, many HOAs are dominated by busybodies who get drunk on their minuscule amount of power and use it to impose their own ideas of how to live on everyone else. As one person put it on Twitter:
HOAs are for people who bought a home but miss all the benefits of having a landlord (absurd rules and regulations, fine print detailing on contracts, working to evict the people who are most in need of being housed and cared for, and taking your money in return for nothing)
— @blimpeh August 24, 2021
If you’re house shopping, it’s worth considering whether you’re willing to chance living under the rules of an HOA. You can avoid looking in neighborhoods governed by them. But what happens if you’re already under contract, or if the house of your dreams is covered by one—can you refuse to join up? The answer: It depends.
The difference between ‘mandatory’ and ‘voluntary’ HOAs
More than half the owner-occupied homes in the U.S. are in areas managed by an HOA. But just because there’s an HOA in existence doesn’t necessarily mean you have to join it. That’s because there are two kinds of HOAs: mandatory and voluntary.
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Membership in a voluntary HOA isn’t required—but you don’t share in the amenities it provides if you don’t join up, which may include access to shared amenities like pools or a clubhouse. Voluntary HOAs generally don’t enforce rules about your home’s appearance or other aspects of your life, either. So given the choice of joining a voluntary HOA, it all comes down to how badly you want to use those sweet amenities. (Keep in mind that voluntary HOAs can be converted to mandatory HOAs if homeowners agree to the change.)
Mandatory HOAs are, as the name implies, mandatory. That means that when you purchase your home you’re legally required to join the HOA, pay its fees, and abide by its rules. This seems absurd to a lot of people, but it’s all found in the legal mechanisms used to create an HOA in the first place. HOAs are built using “covenant documents,” and covenants become tied to the land the house is built on—and therefore cannot be disposed of. There’s usually no wiggle room here—the HOA documents will be part of the closing process, and refusal to sign them will likely kill your home purchase. Mandatory HOAs almost always include (and enforce) rules like how far from the curb your trash bins have to be stored and what kind of landscaping you can have in your front yard.
A caveat: You cannot be forced to join an HOA if you your home ownership predates its formation, even if every other house in your neighborhood signs on.
Do your due diligence
When it comes to HOAs, the most critical thing is to do your research.
Don’t be surprised: Know before you even see a house whether there’s an HOA to worry about. If you’re 100 percent certain you don’t want the hassle, don’t even bother considering houses under HOA rules. Know what kind of HOA you’re dealing with: Review the rules and covenant before your final purchase. Sometimes voluntary HOA boards will heavily imply you’re required to join, and there’s nothing worse than discovering just how wacky the HOA rules are after you’ve bought the place. Trust, but verify: Are there documented cases of weirdos literally inventing HOAs out of thin air so they can lord it over their neighbors? Why yes, yes there are. Just because your friendly neighbor informs you of an HOA and your obligation to pay fees doesn’t make it so. Know the challenges of dissolution: This is America, land of the free (and the litigious), so of course you can try to have an HOA dissolved. Doing so is like to be crazy expensive and difficult. You’ll need upwards of 80 percent of your neighbors to be on board to even try, and the process will almost certainly require lots of money and lawyers.The simplest way to avoid HOA hassles is to not buy a home under the sway of an HOA, and resign yourself to paying for your own amenities and services, like a sucker.
