Buying a property with an HOA (homeowners’ association) sounds like a nightmare to many people. Living in a community with a set of rules people follow may sound good, but unfortunately, some HOAs have many pitfalls. Why are HOAs hated so much?
The main reasons HOAs are hated so much are excessively restrictive rules, poor maintenance of common areas, inconsistent application of the rules, and incompetent HOA Board members.
If you are thinking about investing in a property that is part of an HOA, make sure you understand the HOA you are getting into before you purchase the property.
In this article I will provide my arguments for why HOAs are hated so much.
What is an HOA Anyway?
Approximately 25% to 27% of Americans live in a homeowners’ association (HOA) in the USA.
An HOA is a geographical area (subdivision, district, or unit) or condominium building established to make and enforce specific rules. These rules often limit the owner’s choices and are usually documented in the CC&Rs (Covenants, Conditions, and Restrictions) and By-Laws. The ultimate goal of the HOA is to maintain and enhance the common areas of the community.
Typical HOA rules have requirements or restrictions on landscaping, rentals, house color schemes, vehicles, pets, trash, etc.
Although state laws and regulations govern how HOAs operate, the HOA’s day-to-day operations are managed by the HOA Board of directors. The HOA Board is often made out of volunteer community members. And this is, in my opinion, the root cause of most problems. More on this below.
Why Homeowners Hate HOAs?
First, I have to say that while many people hate HOAs, most people actually like them. It really depends on the type of neighbors you have.
Some residents in specific communities are thrilled and satisfied with their HOA. It all depends on where you end up and how your local HOA is managed. But regardless of how nice an individual community is, you will always find people who hate some aspects of it.
According to a survey completed by Insurance Quotes, Baby Boomers hate their HOA less than the younger generations. The table below shows a breakdown by generation, based on the Insurance Quotes survey.
So what are the main reasons why people hate HOAs?
I have lived in a condominium where I was a Board member for eight years and now live in a house, which is also part of an HOA. I have also had many conversations with Board members of other HOAs and have enough experience to list the main reasons why some homeowners hate HOAs.
Excessively Restrictive Rules
When you buy a property and become part of an HOA, you should be given a couple of important documents: CC&Rs (Covenants, Conditions, and Restrictions) and By-Laws. Together, these two documents include all the rules you need to comply by.
Some of those rules may be too restrictive for you, which may make you hate the HOA. For example, let’s say that you had a dream of one day having a Rottweiler, but your HOA only allows small pets. You are probably not going to be too happy with it.
Another example. Our current house’s CC&Rs prohibit the storage of boats, jet skis, or similar marine vessels on our yards.
You may think. Wait? I own my yard. Why can’t I park my jet skis there?
Unfortunately, you can’t if you are part of our HOA. So, you have to pay a storage fee to keep your jet skis somewhere else even though you own almost an acre of land. That could make you hate your HOA.
This is why I recommend that you review the CC&Rs and By-Laws of the property you are planning to purchase before you buy it. It is not riveting reading, but it is time well spent because you may find some rule you don’t want to accept and find a more suitable house.
Poor Maintenance of Common Areas
The HOA is responsible for the maintenance of the common elements of the community that everyone can enjoy. Examples are pools, walking paths and roads, tennis courts, and clubhouses.
The HOA Board and management sometimes neglect these areas, perhaps because they didn’t allocate enough money to handle the expenses needed for those areas’ upkeep. Or perhaps because they simply forget to schedule the companies that do the upkeep.
Whatever the reason, some communities keep common areas in terrible shape, which certainly can make you hate the HOA. Make sure you get a tour of all the common areas before you “pull the trigger” on a house. If you like to play tennis, but you see that the tennis court is flooded, you may want to look for another property.
Inconsistent Application of the Rules
Remember the CC&Rs I recommended you read before you purchase a property with an HOA? You’d be surprised how often Board members don’t read them. And that is a problem because they have to enforce the rules within the CC&Rs.
Let’s assume your Board member really knows the rules, I can tell from experience that it is not easy to consistently apply all the rules in an HOA. As a Board member, sometimes you have to be flexible with some of the rules, or living in the community can become a nightmare.
But being flexible doesn’t mean being inconsistent. If you allow one neighbor to store his jet skis in the yard for one week and then reject someone else’s request to store hers for the weekend in her yard, you are asking for trouble.
Incompetent HOA Board Members
If there is one thing that it’s going to make you hate your HOA is incompetent Board members.
Volunteer and often inexperienced HOA Board members are elected to implement rules they don’t fully understand. Board members also find themselves in this leadership role without having prior leadership experience. In other words, most board members don’t have the necessary skillset and temperament to manage a community.
And I say that with the utmost respect. People volunteer sometimes countless hours as a Board member and get nothing but push back and negative interaction. I don’t think most people are prepared to be part of an HOA Board. When I first volunteered I didn’t feel I was fully prepared to be a Board member even though I had a degree in accounting, had senior auditor and compliance officer roles in banking.
The most important skill to be a Board member is not technical, it is people skills. And I think you learn as you go.