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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I can’t comment in who decides if there is to be an HOA in a neighborhood.
HOAs in neighborhoods often exist to provide for maintenance if common areas and to uphold covenants agreed to be the neighborhood via the HOA. Common areas typically include things like a park or community pool within the neighborhood, or entrance signage and flowerbeds, etc. Further, the roadways in such developments may be (usually are) the responsibility of the homeowners. The costs for snow clearing and road maintenance are shared and administered by the HOA. As to covenants, the HOA can be responsible for reviewing plans by homeowners for exterior improvements… These are usually oriented towards ensuring a certain continuity of aesthetic is maintained within the neighborhood.
Neighborhoods have areas that aren’t covered by homeowners, like recreational areas and watershed areas (possibly even the roads, but those are usually handled by the city/county). On top of that, there’s usually agreements to keep a consistent look among homes, so some don’t become eyesores.
These are usually set up while building the neighborhood, before anyone buys homes. When you buy a home there you agree to the rules and fees needed to cover maintenance of the other areas. Once homeowners move in, the HOA is turned over to the people that live there. They vote on people to be on the board for the HOA (usually unpaid, but see below).
Those members can be replaced by a vote. The rules can also be changed by a vote. Variances to the rules can be granted by the board. Let’s say the rules state that only chain link fences can be installed in the neighborhood. You can take plans to the board for a wooden fence, and they may agree its fine to have a wooden fence, even though the rules state they’re not allowed.
A lot of the time, that’s it. There’s no issues. Sometimes, board members abuse their power. They may only grant variances to themselves or friends. It really starts to become a problem when those board members control a lot of votes, like they own a couple dozen homes/condos and rent them out. Enough votes on their side and the board members can’t be replaced.
Say I own an asset I hope to sell someday for a lot of money. Unfortunately, all my neighbors own similar assets that they hope to sell as well. In theory, competition between me and my neighbors could drive down the price of our assets. If one neighbor sells their asset very cheaply it could ripple outward and hurt the sale value of everyone else’s asset.
My neighbors and I all recognize this of course, so we agree to start meeting with each other to discuss ways to maximize the values of our respective assets. In practice this will end up doing a lot of regulation on how people’s assets look: can’t park junky cars in the driveway, can’t let the grass grow tall enough to flower, can’t paint that asset a non-approved color, can’t sell the asset to someone who won’t agree to the rules, etc. Typically these regulations stress conformity and regularity to make the assets seem like parts of a matched set.
Sometimes HOAs offer direct benefits like a clubhouse. Things like that are paid with dues and fees collected from members. If it sounds like I’m describing a cartel… Lol. Yeah.
John Oliver has an episode on HOAs that does a pretty decent job at explaining the basics of HOAs, and why it’ll be harder and harder to avoid them in the future.
They’re a way to subsidize the cost of the building project as a whole. Some HOAs can cover the cost of maintaince on the roads, parks, playgrounds, communal areas, planters, and medians. They’re usually set up as the development is built, and can act as mini local governments.
They’re “sold” as a way to keep property values up, to keep the neighborhoods looking nice, and to help settle disputes between neighbors. Which to some degree they can and do.
In most of the country, you can see for yourself where HOAs are, and how strict they are by just driving around different local neighborhoods. Notice one neighborhood has a tree in every front yard, no garbage/recycling bins in sight, and only 2 cars in the driveway? Notice another neighborhood doesn’t have any cars parked on the road? There’s a good chance that’s a strict HOA. Or how a neighborhood has cars parked in the lawn? Maybe theres a huge variety of trees/shrubs/bushes/hedges. They likely don’t have a HOA or any enforcement.
It is best to consider an HOA as a micro government. Normally it is concerned with taking out the trash, clipping hedges and other “local concerns”.
HOAs get formed when a group of home owners collectively decide to form one. At that point you need lawyers to walk you through the process.
HOA’s operate similarly to condo association. They do not exist in all neighborhoods, but instead are typically seen in ones that do have shares property/amenities like a subdivision that was built out by a developer. This might simply be some landscaping and a sign at the entrance of the development, or it might be amenities like a pool, clubhouse/party room, playground, etc. Also, depending on the community, the HOA might have ownership of the roads and need to maintain them, plow them in the winter, etc.
An HOA is set up at the time the homes are built and sold, and is attached to the deed of the home so that subsequent buyers are required to acknowledge that the house is bound by an HOA and they agree to abide by its rules and pay its assessed fees as part of the purchase process. If the home is part of an HOA there is no way to opt out.
Signs, lights, landscaping, gates by the entrance would all be purchased/replaced/maintained by the HOA. The HOA will keep your neighbor from doing crazy shit that impacted your ability to enjoy & sell your home. The HOA often provides networking (parties and guides) to help acquaint neighbors with each other. The HOA would maintain playgrounds, pools, tennis courts, basketball courts, etc in areas that have them. They could help enforce things like quiet hours, overusing street parking, mild property damage, etc before it escalates to the point of involving police.
Obviously some go overboard, but it’s not inherently an evil thing if staffed by reasonable people just trying to keep the area nice.
I live in a neighborhood that has a landscaped entrance with the name of the community, a swimming pool, cabana/party area, baseball field, walking trails, and a fishing pond with a kayak launch.
The pool is the most expensive item to maintain. Particularly every few years when it needs to be resurfaced.
Trees are constantly falling on the hiking trail and need to be removed.
All the fields and entrance need to have regular grass cutting, weeding, and painting. Light bulbs need to be replaced on the signage.
So all of us in the neighborhood agreed when we purchased our homes that we would pay the HOA membership dues which are $1000 per year. It’s part of the real estate sales contract.
At the last HOA meeting a couple of people said that we should add a pickle ball court. The HOA board said okay, if you want that, figure out where it will go, get three bids to install it, and provide that to the board. The next meeting will include discussion on the bids and someone can make a motion to vote on the project or not.
I’d like to point out that while a lot of people shit on the concept of an HOA, Ive never seen crazy people or power hungry board members. I’m sure it happens but not in the two different HOA’s Ive been a member of.
Previously lived in an HOA community. The builder was required to create one to maintain fencing along a railroad and to maintain water retention ponds and to carry a blanket liability policy on common areas. That was it.
Our HOA just got together last weekend and replaced all the planks on the dock. Doing the work ourselves with volunteer labor rather than paying someone saved the community thousands, and keeps our dues even lower. Last year we all got together and replaced the community playground. Some volunteers got quotes from local companies, then met up to find the cheapest one, found volunteers to get the wood chips donated, etc. when there are storms and limbs fall from trees, the HOA prez calls a landscaping company to do clean up if no one can handle the big mess. We put picnic tables around when we have a few extra bucks, plan Easter egg hunt, get santa to come through, etc.
I know we like to hate on the HOA, but they do a lot of good. You just hear the horror stories because it’s more interesting than the good shit.
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