How Much Power Does an HOA Have?

Being a homeowner comes with a list of responsibilities. Home appliances and furniture must be kept, and bills must be paid. Sometimes, it feels like house maintenance never ends, and you might need some help or at least some tips. Living in a home not only requires upkeep for the homeowner’s personal preference, but it also requires maintenance for the Homeowners Association (HOA). Many residents wonder: How much power does an HOA have? In short, within various states and communities, it varies.

The Homeowners Association is typically part of every community and is present to uphold rules and protect property value. Anything acting outside of the scope of the Homeowners Association’s responsibilities does not have to be enforced by residents. However, it is crucial to abide by the HOA’s rules to avoid a battle with the association. Non-compliance with HOA restrictions has forced some owners out of their homes due to foreclosure by the HOA. Before exploring what HOAs can and cannot do, let’s check out some facts about the Hoas’ history and why it was necessary to create them. 

• Brief HOAs history
• What regulations can HOAs impose:
  • 1. Create specific rules and regulations for residents of their community to follow
  • 2. Enforce rules and regulations by law
  • 3. Force a home into foreclosure for non-compliance
  • 4. File a lien on the home
• Regulations that HOAs cannot impose:
  • 1. Government-Given Rights
  • 2. Unenforceable HOA Rules
  • 3. Examples of Unenforceable Rules
• The pros and cons of the Homeowners Association (HOA)
  • HOA Pros
  • HOA Cons
• Do you have to join an HOA?
  • Voluntary HOAs
  • Mandatory HOA
  • HOA formation
• What happens if you don’t pay your HOA fees?

Brief HOAs history

Homeowners’ associations have been around longer than you might think, though not precisely as we see them today. The HOA concept traces back to Levittown, a community built in Long Island in the late 1940s, aiming to provide affordable homes for veterans. While there wasn’t a formal association, community rules and regulations were in place. 

Similar communities emerged throughout the mid-20th century, but the real surge in HOA communities occurred in the 1960s due to government encouragement of residential developments and suburban migration. This increased housing density, with shared recreational spaces allowing for smaller lots and more homes per area. Associations were formed to manage these shared spaces, essentially serving as local governments for these communities. 

As more communities formed, the HOA model adapted to residents’ needs, evolving into what we now recognize as modern HOAs. The HOA industry has steadily grown since the 1960s and remains robust. Consider these stats:

• An estimated 70 million Americans, over 1 in 5, live in HOA-governed communities. 
• Over 5,000 new HOA communities are established each year.
• In 2016, around $5.5 trillion worth of real estate fell under HOA management, representing 18% of all US housing.  
• The HOA industry generates over $88 billion in annual revenue. 

With the ongoing expansion of suburban housing, the HOA industry is expected to continue to thrive. Now, let’s see precisely how influential an HOA is, what regulations it can impose on residents, and what not.  

What regulations can HOAs impose:

1. Create specific rules and regulations for residents of their community to follow 

Since the HOA has authority over the particular community, it governs, they are allowed to create rules for the residents of that community to follow. When new residents move into their new residence, they must agree to the HOA rules to live in that community. 

The HOA rules are spelled out in the homeowner’s contract that must be signed before they officially move in. Although some HOA’s are more lenient, others can get very particular about the rules within the community.

2. Enforce rules and regulations by law 

If you’re wondering if HOAs have legal power, the short answer is yes. Since the HOA requires that all new community residents agree to the HOA regulations by signing a contract, it is legally binding. HOA has the legal power to require residents to abide by the terms of their contract. Most HOAs have rules on unkept lawns. 

The resident must comply if a homeowner requests the HOA to cut their lawn because it has grown too high and breaks community guidelines. HOA also has specific rules on essential items such as trash disposal, building on the property, and restrictions on home exterior paint which can affect the home value.

3. Force a home into foreclosure for non-compliance 

Given that all homeowners within a specific HOA signed a contract to live in the community, the HOA can enforce the legal consequences of non-compliance with regulations. So, if you’re wondering, “Do HOAs have legal authority?” the short answer is yes.  For example, if a homeowner fails to pay HOA fees, the HOA has the right to force a foreclosure on the home for failure to pay. For this reason, it is imperative to know the articles of the HOA and abide by them.

4. File a lien on the home 

 If homeowners don’t pay their annual dues to the association or pony up the money for an assessment, the HOA can file a lien on the home. You might protest and argue that you don’t even go to the clubhouse or don’t use the gym, but it doesn’t matter. Every homeowner in the community is obligated by the association’s covenants, conditions, and restrictions (CC&R) to pay a share for all the community property. The HOA can file a lien by not complying with the rules and cloud the home’s clear title. This can become a real issue when the homeowner tries to sell the property or refinance.

Regulations that HOAs cannot impose:

As seen above, homeowners’ associations often have rules and regulations that residents must adhere to. However, it’s essential to understand that there are certain limitations to what HOAs can enforce. These limitations ensure that homeowners’ rights, as granted by the government, are protected.

1. Government-Given Rights

When you purchase a home within an HOA, you agree to abide by its articles and regulations. However, it’s crucial to note that these agreements cannot override the rights granted to citizens by the government. In other words, HOAs cannot impose rules that directly contradict or infringe upon these fundamental rights.

2. Unenforceable HOA Rules

There are specific types of rules within HOAs that are deemed unenforceable under the law. These rules include discriminatory policies, unreasonable fees, and restrictions on religious practices, among others. Any rule that goes against established laws or constitutional rights falls into this category.

3. Examples of Unenforceable Rules

For instance, if a homeowner wishes to display the American flag outside their home, the HOA cannot deny them that right. However, the HOA may still have the authority to regulate certain aspects of the flag’s display, such as its size and how it is flown. Similarly, while an HOA cannot deny residents the right to dispose of their garbage, they can restrict where and when garbage can be picked up.

The pros and cons of the Homeowners Association (HOA)

Why would it be a good idea to join an HOA in the first place? It is essential to know that HOAs don’t just enforce rules and regulations on homeowners; they also have responsibilities toward the community. Therefore, a neighborhood with a homeowners association has benefits and downsides. Here are some of them!

HOA Pros

• Clean surroundings: One of the benefits of a homeowner association is a neat and clean neighborhood. Chances are you won’t have a neighbor with piles of trash in the yard or poor garden maintenance that affects your neighborhood’s aesthetics. HOA imposes trash storage and lawn maintenance rules to keep a clean environment and look.

• Maintenance of community property: Another advantage has to do with the fact that the HOA is responsible for maintaining community property. Things such as the upkeep of tennis courts, swimming pools, or other recreational areas fall under the HOA’s responsibility. Shared amenities and common areas in the neighborhood are likely to be maintained in good condition in a community with HOA.

• Luxury amenities: In a community with an HOA, you can benefit from luxury amenities such as recreation centers, golf courses, pools, tennis courts, basketball courts, and many others. Because HOA deals with the maintenance of these places, it is less likely that you will see them in bad condition or deteriorating over time.

• Community services: One significant advantage of joining an HOA is access to community services, such as landscaping, snow removal(where needed), and security. These services are often collectively managed and funded by the HOA, relieving individual homeowners of the burden of organizing and paying for them separately. 

HOA Cons

• Exterior restrictions: One of the disadvantages of living in a home that is part of a homeowners association is that you cannot design the exterior of your home however you want. The association determines an acceptable house appearance, and all families must follow the HOA standard. That doesn’t mean that all homes have to be identical, but you can’t go overboard and paint your home with any color or decorate the home’s exterior however you want it. 

• HOA scrutiny: The association may scrutinize the landscaping of your front yard and the home’s exterior. If you find the rules reasonable and in line with how you want your home to look, the neighborhood might be right for you. Otherwise, you might want to consider other housing options.

• Foreclosure: Another con is that HOAs can foreclose properties or file a lien on a home if the homeowner breaks the rules or falls behind on HOA fees. Laws vary by state, and they can limit the time it takes for HOA to foreclose on someone. Suppose you reviewed the list above on what HOAs can and can’t do. In that case, you know what might follow due to breaking the CC&R.

Monthly dues: Monthly dues can impose a significant financial burden on homeowners, especially if they are already stretching their budgets to afford their homes. Depending on the HOA’s management and the amenities it offers, these dues can vary widely, ranging from modest amounts to substantial sums.

Do you have to join an HOA?

Knowing how much power an HOA has and what they can or cannot do might make you hesitate to join the association. But is that even an option? Some home buyers may want to avoid living with HOA restrictions; therefore, if you decide to buy a home within an HOA, can you refuse to join? 

With more than 350,000 homeowners associations in the US, it is very unlikely that you will find a home in a community not run by an HOA structure. Also, you need to know that you can create an HOA as a landowner, but several aspects should be considered. There are two types of HOAs: voluntary and mandatory associations. 

Voluntary HOAs

As a homeowner in a community with a voluntary HOA, you are not obligated to join it. However, if you refuse to join, there are some downsides, and usually, that means that you are denied common facilities such as pools, tennis courts, or clubs exclusively for HOA members. If you opt out, you can’t use the facilities supported by HOA fees unless you pay to use them. 

You can refuse to join a voluntary association, meaning they cannot enforce HOA rules on nonmembers. Receiving a fine for overgrown grass or levy assessments to fix potholes is something the HOA cannot do if the person concerned is not a member.

Mandatory HOA

As the name might suggest, buying a home in a community with a mandatory HOA doesn’t give you a choice about joining. You can’t even close on your real estate purchase without signing the documents, agreeing to abide by the HOA’s rules, and paying any fees, assessments, or fines.

A mandatory HOA is a structure where homeowners automatically become members when a home purchase is made in that community. Mandatory associations typically maintain common facilities but enforce covenants and restrictions around your home. Things such as painting your door bright pink, housing 20 dogs and 10 cats, or parking an RV or work vehicle in the driveway are impossible in a community with mandatory HOAs.

HOA formation

Owning a home in an area that doesn’t have an HOA instituted allows you, as a homeowner, to refuse to join it if one is forming in the future. It’s rare, but it is possible to opt out of joining if they are discussing forming an HOA. Make sure you talk with a lawyer since different states offer different levels of protection to homeowners, and you want to be aware of that.

What happens if you don’t pay your HOA fees?

Falling behind on your HOA fees can lead to a series of escalating consequences that can significantly impact your living situation and financial well-being:

• Loss of privileges: Initially, your HOA may revoke certain privileges, such as access to community amenities like the gym, pool, or clubhouse. This is often seen as a first step to encourage prompt payment of dues. 
• Debt collection efforts: If payment failure persists, the HOA may escalate its efforts to collect outstanding fees. This could involve hiring a collection agency to pursue you for the unpaid amounts through phone calls, letters, and other communications. 
• Legal action: In severe cases, the HOA may take legal action to recover the unpaid dues. This legal recourse could result in a lawsuit against you, seeking the outstanding fees but additional fines and accruing interest. 
• Property liens: Should you continue to neglect payment despite legal warnings, the HOA may place a lien on your property. A lien is a legal claim against your property, effectively preventing you from selling or refinancing your home until the debt is satisfied. 
• Foreclosure proceedings: In extreme scenarios, particularly in states with lenient foreclosure laws, the HOA may initiate foreclosure proceedings against your property. This means that if the outstanding dues remain unpaid, your home could seized and sold by the HOA to recover the debt, ultimately resulting in the loss of your residence. 

However, it’s essential to be familiar with the particular regulations of your HOA. Each HOA operates under its own set of rules (CC&Rs), tailored to the community’s specific needs and governed by state laws. These regulations dictate how late or delinquent payments are handled, outlining potential repercussions. To safeguard against surprises like losing access to amenities or facing more severe consequences, it’s imperative to thoroughly understand these rules and stay informed about any updates or changes. 

Conclusion

Navigating HOA regulations can feel like trying to untangle a complicated knot. They’re often specific and intricate, making it difficult for residents to grasp their rights fully without professional help. That’s where finding a skilled real estate agent comes in handy. They’re skilled at deciphering these rules and can guide residents through the maze of regulations. 

By now, we hope you’ve fully understood how much power does an HOA have. If your property is part of an HOA, it’s essential to be familiar with its particular regulations, as the repercussions of not following them could be severe. Also, remember each HOA has its own set of rules in compliance with the state’s law, so be careful about the information you get on the subject. 

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