If you buy a home and enter into an HOA, or Home Owners Association, you need to be aware of both the pros and cons of living in an HOA property. An HOA is designed to protect certain neighborhoods from decreased property values by ensuring the neighbors don't do anything to hurt the property value of the homes. Home Owners Associations often seek to raise property values also by governing what is acceptable and what is not acceptable when it comes to your property and what goes in or on it.
Most Home Owners Associations have generated a covenant of sorts, including a listing of laws and bylaws within the HOA that designates what can be done to a property within the neighborhood. These listings can be hundreds of pages long, and may be written in a legal language that is very hard to interpret by most people. Some of the things a Home Owner’s Association can control are:
If you are found to be in non-compliance with any of the Home Owner’s Association’s many laws or regulations, you may be issued a fine by the homeowner’s association, and fined again for non-payment or non-compliance with the citation ordered. If these fines go unpaid, the Home Owners Association can have any unpaid fines or fees applied to your property tax bill. Non-payment of these fines and fees can even result in your home being forced into foreclosure, meaning you could lose your home over a matter of a $300 fine, or less than a thousand dollars in unpaid HOA fees. For example, you could end up essentially losing your entire home, no matter what its value, because of a $500 fee or fine.
If you plan to buy a home within an HOA, be sure to have your facts straight about that particular HOA’s policies and regulations. Be aware of any regulations they may have, and how far they can or will go to enforce even the most mundane of regulations before agreeing to join any neighborhood in an HOA. The HOA really does have power over your property and you may wish to have a lawyer look over any agreements you are asked to sign before buying a home in a community with an HOA.