I understand what HOA’s do, and was first introduced to the term in a condo building (not mine). I understand in a condo building, or high rise, you’re all sharing one building and need to contribute to that building’s maintenance. But I don’t understand HOA’s in neighborhoods…when you live in your own house. Is it only certain neighborhoods? I know someone who lives on a nice street in a suburb and there’s no HOA. Who decides if there is one, and what do neighborhood HOA’s exist for? Are you allowed to opt out?
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There are often still common areas in neighborhoods. A park, a water feature, maybe a pool or clubhouse. So they serve the same purpose as a Condo Association in that regard.
Otherwise, lots of neighborhoods are designed with uniformity in mind and it’s one of the reasons they’re attractive to buyers. And once they move in they don’t want things to change. So a HOA can assure that neighborhoods [keep a nice and uniform aesthetic](https://as2.ftcdn.net/v2/jpg/01/66/24/11/1000_F_166241107_6m4gW5nBPrs8shOuqNeJLxeeHyisBJY8.jpg) for those that have bought and those that buy in the future.
Resisting the urge to be snarky because I hate HOAs and will never live in one again. But whether the neighborhood has or doesn’t have one varies wildly, but they usually cover shared services. Landscaping, shared spaces like tennis courts or pools, trash pickup, etc. Unfortunately they are often taken over by the people in the neighborhood who have too much time and not enough to do, so they start implementing bylaws and restrictions about this or that. House paint color, where you can park your car, and on and on. I’m sure there are some HOAs out there where you can opt out, but by and large I’ve only seen them be mandatory because it’s “better” for everyone to be paying into the shared stuff.
The extent of the responsibilities for an HOA that covers a neighborhood of detached houses varies significantly and tends to depend on what services the local municipality is already serving to that neighborhood. Just like condos in a high rise, a bunch of detached houses on a single street still rely on shared goods. The street itself is the most obvious, but this can also include landscaping/forestry, security, trash pickup, and various utilities. Houses on a public street in a large city likely do not need an HOA. Houses on a private street with a fence around them absolutely do.
On top of this, even when an HOA isn’t needed to keep the streets from wearing away to nothing, some neighborhoods might have one for purely aesthetic/social purposes. These HOAs have an interest in keeping all of the houses in the neighborhood looking more or less the same (either because the residents like that or because they believe it increases the market price of their house) and maybe throwing a party every few months.
Typically you see them in residential neighborhoods that were built more recently, and they’re put in place by the developer. If that’s what they want to do, then part of the contractual agreement for buying a house there requires you to join the HOA, and typically that contract also stipulates that you can only sell the house to someone who also agrees to being in the HOA.
I guess a pre-existing neighborhood could all get together and decide to create an HOA and all sign contracts locking them into it, but if you already own a house in that neighborhood they couldn’t force you to join it.
Generally these kinds of HOAs exist to try to maintain property values by enforcing some level of standards of property maintenance and maybe design standards. Prevent homeowners from tying up goats in their front yard, or painting their house red with yellow polka dots, or whatever.
if a developer builds a lot of houses and amenities like a gated community or a park, to pay for the upkeep they would set up a HOA, no you cant opt out, you can vote to dissolve it once you are in
It’s important to realize that when it comes to neighborhood HOA’s, there’s really two varieties:
1. Intense, super hands-on HOA’s that govern absolutely everything from requiring approval of landscaping design to the contractors you use to actually do the work.
2. HOA’s that exist with extremely minimal rules and fees that really don’t / can’t do anything but collect a tiny amount of money from people in the neighborhood to maintain the sign and apply pressure on people to keep things looking remotely presentable.
We live in HOA style #2, and our rules are basically no broke down cars / excess junk in your yard, no living in campers / RV’s, no farm animals, and outbuildings / accessory dwelling units much match the color and style of the primary structure. That’s it.
When we moved to where we live now I was very anti-HOA as the HOA’s I’ve heard about from friends were all HOA style #1. Then we got looking around at neighborhoods without HOA’s and you’d be inside of a million dollar house looking out across the street at Skeeter’s collection of rusted riding lawnmowers, or next door to someone who has way too small of a lot that decided to run 20 cattle on it so it’s just a mud pit with electric fences on the property line, etc.
If you don’t have local city / county ordinances to prevent this kind of stuff, you have absolutely no power to do anything. If you’re living inside of an HOA you can have rules everyone agrees on to maintain some kind of minimal standards to the neighborhood. HOA style #2 can be a huge net positive, and some people really love HOA style #1 because they want everything to be perfect.
Different strokes for different folks.
The usual way HOAs form in neighborhoods is that they are created in the very beginning by the developer who builds the entire neighborhood. The developer buys a huge plot of land and then divides it into individual lots and common areas (like roads, parking, maybe a clubhouse or pool, etc.). Houses are built on individual lots and separate deeds are created for each lot. The deeds are subject to some sort of restrictive covenant, basically an agreement that is part of the deed that places restrictions on the property. These can include specific restrictions like “can’t build additional structures on the land” or “no metal play structures.” They can also include an agreement to be subject to an HOA with specific powers, which is an entity created by the developer.
Once the HOA is created and each deed carries the restrictive covenant subjecting the landowner to the HOA, then that’s that (except in cases where HOAs do illegal things that can end up breaking the covenant from their end, terminating its existence). Every time a house in that development is sold, the deed continues to carry the obligation to be a part of and follow the requirements of the established HOA, and new homeowners will also be required to sign something acknowledging that they understand they’re subject to the HOA and its rules.
Generally, you cannot opt out – the covenant is part of the land and you can’t own the home without also “owning” the obligation to be a part of the HOA.
Despite what we see on the internet, there are plenty of HOAs that aren’t run by power-mad busybodies who drive through the neighborhood measuring grass length and finding all sorts of ways to cause problems for residents. They manage common areas (roads, maybe a neighborhood park or pool, etc.) and only deal with particularly egregious situations on private lots. Of course, the bad ones get all the attention and some of them are really, really bad.
I can only speak from the experience of an HOA for a house but I imagine it’s same concept that applies to condos/townhomes.
They typically exist to enforce rule/laws on how your house is presented, such as no cars on your lawn or your house needs to be painted certain colors. In my area, they also maintain common areas such as the developments pool or park in addition to any of the house regulations, using the annual fees we pay.
The idea here is that they exist to make the area look good and raise home values by keeping the area clean while also providing some amenities.
In terms of just opting out, it’s typically not something you can do. If you’re buying a house in an HOA it’s typically one of the documents you sign (I think called CC&R’s) when you buy that you’ve read the bylaws and agree to follow them, pay dues, etc.
If you don’t follow the rules you can get fined. If you don’t pay the fines or the dues it can accrue and they can put a lien on your home.
Candidly I think HOAs get a lot of (justifiable) flack because people get elected to the board and they are typically older people who have a lot of free time, power goes to their head and they try to enforce draconian rules on their neighbors. That being said, my current board on my HOA is very laid back and they do a great job of making sure everything looks clean without overstepping their bounds.
The number of HOAs in America took off after the introduction of the Clean Water Act of 1972.
(source – I’m a former HOA president)
One aspect of the Clean Water Act that impacted development was a rule that says residential development should not impact the dispersal of groundwater.
Before a neighborhood is built, when it rains, the rainwater will slowly seep into the ground, or slowly trickle off into streams and rivers. But after the neighborhood is built, rainwater will fall on concrete and asphalt, get diverted into storm sewars, and quickly run into those same rivers. The quantity and speed of the water runoff is dramatically increased.
One aspect of the Clean Water Act is that developers are required to mitigate impacts on rivers and streams from developments. To do this, most developers created specific areas for rainwater to pool.
Often called “detention” ponds or “retention ponds”. Subdivisions would have a parcel of land where the storm sewars could drain, and the water could collect and slowly seep into the ground.
These stormwater management ponds are typically placed on land that is not sold to homeowners. The developer doesn’t want to hang onto it forever – they need someone to transfer the ownership of the pond to. The neighborhood needs someone who’ll be responsible for the care and maintenance of the stormwater basin.
Thus the HOA is created. The majority of HOAs in America are created solely to care for and maintain stormwater basins.
Once HOAs are created, how they are governed is entirely up to the residents & the people they elect.
Once the HOA is necessary, some developers also see value in adding amenities, like a pool, golf-club, or club-house. But ultimately it is the stormwater drainage basin that required the creation of the HOA in the first place.
When I was president of my HOA, I campaigned on the basis of “We will leave you alone, and let you do your thing.”, and we did exactly that. More HOAs should operate like that.
It’s America we need an owner for property
If you and your neighbor don’t own it but have a right to use it (or more accurately can be billed for the maintenance of it), who owns it (often this it is referred to as a common element)?
The entity we call the HOA owns it.
All the perils flow from the concept. Someone has to own it.
If there is no other property separate from what you own that you can use and/or be billed for the maintenance of by virtue of owning your property, there is no HOA because there is no other property to be owned.
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