As everyone knows, we’ve been looking for a new home since we sold our old home and moved into a temporary place last month.  And although real estate prices are similar here, the neighborhoods are very different.  For instance, our old town had very few neighborhoods with a homeowner’s association.  In fact, our old neighborhood didn’t have a homeowner’s association and neither do either of the neighborhoods where our two rental properties reside.  However, I kind’ve wished they did from time to time….especially when this happened:

Picture A

In case you’re wondering what you’re looking at, I’ll provide a basic summary of what happened.  The nicest neighbor in the world built the ugliest shed in the world.  I believe that picture #1 provides the best view of this ill-built monstrosity and the TV that haphazardly hangs under its eaves.  The second pictures shows how incredibly tall the shed is and how it towers over the owner’s fence and the surrounding area in general.  Keep in mind, I had to be discreet when taking these photos so they aren’t the best.

In addition to the giant shed on the corner, the neighbor across the street from us parked his boat in his yard year-round.  And since we didn’t have a homeowner’s association with any rules, there was nothing that anyone could do about it.  I wasn’t bothered by it at all personally.  Hell, I’ve got bigger things to worry about than a boat in someone’s yard.  However, I do know that a few neighbors weren’t happy about it and were tired of looking at it after a while.

What Does a Homeowner’s Association Do?

First, let’s start with the definition of a homeowner’s association.  For those of you who don’t know, a homeowner’s association is a formal legal entity created to maintain common areas and protect the rights of residents.  This is how Wikipedia defines them:

In the United States, a homeowner association is a corporation formed by a real estate developer for the purpose of marketing, managing, and selling of homes and lots in a residential subdivision. It grants the developer privileged voting rights in governing the association, while allowing the developer to exit financial and legal responsibility of the organization, typically by transferring ownership of the association to the homeowners after selling off a predetermined number of lots. Membership in the homeowners association by a residential buyer is typically a condition of purchase; a buyer isn’t given an option to reject it. Most homeowner associations are incorporated, and are subject to state statutes that govern non-profit corporations and homeowner associations. State oversight of homeowner associations is minimal, and varies from state to state. Some states, such as Florida and California, have a large body of homeowner association law, and some states, such as Massachusetts, have virtually no homeowner association law.

Homeowner’s Association, or No?

Like I said, we haven’t had a lot of experience with HOA’s since our old town had very few.  And since almost all neighborhoods in our new area have them, we’ve discovered some interesting things.  Here are a few:

  • Some HOA’s in our area have HOA fees as high as $700 per year just for maintenance of the common areas.  I think that’s bat-shit crazy.   The cheapest HOA fees we have found were around $150 per year which is much more reasonable.
  • The strictest HOAs set guidelines for their neighborhood, only allowing certain fences and sheds to be built.  Residents also have to get paint colors approved as well as changes to shudders, outdoor lights, and signage.
  • A few of the neighborhoods have a neighborhood pool or two.  I’ve always wanted a pool but don’t really want to take care of one.  To me, a neighborhood pool sounds like a nice compromise to having a pool of my own.
  • HOAs are usually run by a board of directors and do not need to get community consent to change rules or raise HOA fees.  As someone who doesn’t like others spending my hard-earned money, this terrifies me.
  • HOAs generally have the authority to charge fines for infractions.  If unpaid, they have the authority to put a lien on your home.

Like it or not, every single neighborhood we’re interested in has an HOA.  And although I’m slightly put off by them, I’m not scared enough to refuse to live in a neighborhood that has one.  I also like the idea of a neighborhood pool and some rules. You know, just in case someone decides to build a shed taller than their house or park a boat in their front yard year-round.

See Also: Quicken Home Loans

On the other hand, I hate the idea of asking permission to paint my house or get a hot tub.  What’s up with that?  I’ve never really liked authority and this is especially true when it comes to my own home that I paid for with blood, sweat, and tears.  Regardless, these are just some of the factors we’re considering as we choose a new home.  I don’t want to live under the rule of an HOA but I don’t want to limit myself to HOA-free zones either. I guess we’ll just have to wait and see what happens.

What are your thoughts on homeowner’s associations and HOA fees?  Have you had any experiences with either?