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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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.
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