Edit just to clear up: I don’t have a positive or negative opinion on HOAs. I know next to nothing about them. They’ve just been mentioned to me a few times by family members recently and I asked about aspect I didn’t understand
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Because then you have the benefits of living in the HOA without having to pay for those benefits
They are basically unions for home owners – what do the at will states (I think that is the term) say about these?
I am on my HOA board. The single largest expense we have is the landscaping maintenance of the “common areas” of the neighborhood. There’s not even very much of it and the annual fees are not ridiculous, but everyone in the neighborhood benefits from those areas being clean and well maintained. If you don’t want to live in an HOA neighborhood, don’t. But opting out would be unfair to the community.
There are some benefits to living in an HOA neighborhood. Mine hosts two social events each year, neighbors help each other, and there’s a community vibe. You only hear the horror stories; you don’t hear about the regular ones.
To be fair, HOAs began as a form of systemic racism and are definitely antiquated but they aren’t ALL heinous. Mine for example is racially diverse and friendly.
I lived in a neighborhood with an optional HOA. It is all dependent on how the deed restrictions are written. I think only 2% of the houses were members. Most of the yards were trashy. The sign needed replacing at the front of the neighborhood and they had a hard time coming up with the money to do it. But I could park my car in the yard if I wanted to! And paint my house whatever color I wanted!
There are pros and cons to both mandatory and optional HOAs.
There is an opt out option. It’s called living somewhere else.
Some neighborhoods have opt-in “neighborhood associations” etc, but that’s different from an HOA.
Think of a condo building if it helps understand. That’s one piece of property subdivided among multiple owners, but they all have a stake in the whole building. If the roof falls off, they’re all in trouble.
Lots of HOA neighborhoods are technically “detached condos”. One large plot of land gets purchased by a developer who builds roads and houses on that land, but it’s still one piece of land owned by that company. Now they sell off individual lots to individual homeowners, but who owns the roads between the houses? The basketball court, the playground, the pool, etc? That’s all private land, so the company forms the HOA and now all the homeowners become part-owners of all that stuff.
Sure you could theoretically buy the house and opt out of the road maintenance, but eventually the roads are going to need repairs. If nobody is in the HOA, who is going to pay for the road repairs?
So as a group, the existing owners of the property (aka the HOA) have a vested interest in making sure that future home owners also have a stake in all that maintenance.
There is common property in your development which has to be maintained. Check your bylaws to see what that is. This happens because your area doesn’t pay a city to maintain this common property like roads.
Hijacking a little:
ELI5, why do HOA’s have any power at all?
Real Estate professional here.
One thing that others haven’t covered is the concept of Restrictions and Covenants. There are laws/legal forces that are applicable to a person. And there are those that are applicable to real estate. For example, I live in a desert and water is very important here. If I don’t pay my electricity bill, they will go after me, the human, for their money. If I don’t pay my water bill, they will go after my property and foreclose for their money.
In the context of HOAs, their rules MAY be applicable to the land. In that instance there is no way for a person to opt out because the person is not being regulated. The only option a person has is to buy or not buy the land, because the rules come with the land.
Disclaimer. I am not your attorney, nor is this legal advice.
My HOA fees cover maintenance of the pool and garden and common areas, trash and recycling pickup, and water/sewer including hot water. It’s very reasonable for what I get.
The HOA has a partial ownership interest in the houses, right there on the property deed. You can’t 100% buy the house because the seller doesn’t 100% own it. It’s not just a club that the house owners decide to join, it’s a legal and financial entity that has partial ownership of all of the houses. The seller can no more sell you the house without the HOA than they could sell a house they inherited jointly with a sibling.
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