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The Good, the Bad, the Ugly: All About HOAs

A Homeowners Association (HOA) is an organization that makes and enforces rules to maintain a neighborhood, subdivision or building. Members of the HOA pay a fee in exchange for the HOA to maintain common areas establish rules and sometimes provide amenities.

Homeownership in these communities binds you to the association's covenants, conditions, and restrictions (CC&Rs). The associations also have legal powers, such as placing a lien on your home, imposing fines, or suing you for not complying with the rules.

While it's true that a well-run HOA can make life safer and less stressful for residents and members, poor management can turn an HOA into a vehicle for petty grievances and downright tyrannical policies.

The Good

  • Neat and well-kept neighborhoods

  • Amenities for members

  • Rules to keep the peace

The Bad

  • Required to abide by the rules and restrictions governing the exterior changes and maintenance of your home

  • Can be expensive

  • Can be aggressive while enforcing rules

  • When contemplating a property purchase in a planned development, mortgage lenders will factor in the impact of its HOA dues on your overall finances.

The Ugly

An 83-year-old Houston woman owed her HOA $4,000. Her home was seized and sold for just $5,000. Almost all of that money went to pay the HOA attorney.

What you need to know before buying an HOA community

  • Learn everything you can about meetings, voting, inspections, notifications, fines, and how the board communicates with members.

  • Homeowner associations create Covenants, conditions, and restrictions (CC&Rs) and enforce them.

  • Make sure you ask your realtor for the HOA and the CC&Rs.

  • Explore how rules are set and enforced and what penalties are imposed against rule-breakers.

"HOAs can have a positive effect on communities by keeping the neighborhood architecturally consistent and enforcing exterior home maintenance. When a buyer is considering a home in such a community, we make sure that they are very aware of covenants and restrictions. These disclosures are required by the seller in order for the buyer to make a fully informed purchase." – Whit Harvey

Who Governs HOAs?

It depends on the state you live in. Some states have statutes that govern how HOAs run, while others don't. However, most states do not oversee or control how HOAs function. Instead, many HOAs are governed through voting and member participation. Here is how it is handled in Maryland.

Some examples of the restrictions and rules you might see are limits or requirements for:

  • Siding and roof colors and materials

  • Parking RVs or trailers in the driveway

  • Fencing height and placement

  • Visitor parking

  • Vacation renting

  • Yard decorations

  • Yard work

  • Additions

Think carefully about whether you’ll be able to live with your neighborhood restrictions and if the benefits outweigh any negatives.


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