Homeowner's Association - HOA

Buying a house is a big, expensive investment. And just as with any other investment, we tend to like it better when our house’s value doesn’t go down after we buy it.

There are many things we can do to protect our home’s value—keep it clean, maintain the yard, fix stuff when it breaks—but there are also things affecting its value that we have no control over. Like economic recessions, for example. Or the fact that our next door neighbor’s house is painted bright purple and has tin foil on the windows and four cars on cinder blocks parked in the knee-high weeds that are their front lawn.

But wait—we might not be out of luck just yet. If we live in a neighborhood with a homeowner’s association, or HOA, we still probably can’t do anything about economic recessions…but we might be able to do something about Mr. Cinder Blocks next door. That’s because HOAs, organizations funded and run by a neighborhood or community in an effort to protect the value of the residences within that neighborhood or community, write and enforce rules that homeowners must abide by. If our HOA rules specify that certain behavior (like having cars on blocks on the front lawn) is against the rules, then the violating homeowner can be fined. And if the fines don’t work, the HOA can eventually issue a lien against the property.

There are pros and cons to living in an HOA community. Some of the pros are that common areas (sidewalks, neighborhood pools, etc.) tend to be well-maintained, as are the homes themselves. But on the con side, HOA dues can be expensive—we’re talking hundred of dollars a month, depending on where we live—and we’ve probably all heard at least one horror story about an HOA that went too far: telling homeowners how many plants they can have in their own front yard, for example, or forbidding them from parking on the street in front of their own home.

When we’re looking to buy a house, we should make sure to check into whether it’s in an HOA neighborhood and how much the dues are. Not only can they become quite a big line item on our monthly budget, but if we’re into funky paint colors or want to keep goats in our front yard or a plastic Santa on the roof year-round, we may find that a HOA neighborhood’s rules really cramp our style.