eli5: I don’t understand HOA’s

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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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Anonymous 0 Comments

They exist because local governments don’t want all the extra expenses, but owners like to protect their property values by enforcing ordinances and housing builders like building lots of houses.

No local government, no ordinances or enforcement, but what if there was some kind of contract everyone would have to sign when they buy the house with a sort of private government? Thus, the HOA.

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