Independent American Communities (IAC) blog contains more than 1,500 posts and articles that provide real life examples of the risks and disadvantages of owning a home in an HOA community, including a condo or co-op.
This page provides an overview of the most common HOA problems that U.S. homeowners experience.
By Deborah Goonan, Independent American Communities deborahgoonan@gmail.com
Planned communities and condominium housing can seem enticing to some buyers. The real estate industry advertises these homes and their communities as “vibrant” and attractive. They brag about their stellar locations, amenities, and their “sense of community.”
Curiously, most builder websites and real estate agents ignore or downplay the existence of an HOA. When you show up to look at the homes, the sales agents will often brag about all the “benefits” the HOA provides and the services “covered” by HOA, condo and co-op fees.
To sell you a home, they tell you about the advantages of HOAs, but they don’t talk about the disadvantages. Homeowners find out about HOA problems after they’ve bought in.
If you’re looking for a home to buy (or rent), or if you’ve recently moved into an HOA, you need to be aware of the downsides.
The risks of owning HOA property and/or living in HOA housing include:
FINANCIAL
Financial risks — You are likely to face unpredictable expenses. These can include rising HOA fees, special assessments, rising insurance costs, and home repair costs not covered by the HOA or insurance. You can even risk the threat of foreclosure for non-payment of HOA or condo fees. (Or eviction for failure to keep up with co-op fees.) In fact, if an owner withholds fees for any reason — even a “good” reason — the HOA can legally foreclose on your home (and co-op can evict you). This is true even if the HOA fails to maintain the property or shirks its fiduciary duties.
HEALTH AND SAFETY
Structural and safety issues — Owners may experience construction defects, deferred maintenance of multifamily buildings and grounds. Your community might have poor or non-existent security. Some HOAs fail to repair broken equipment such as HVAC systems or elevators. Leaky roofs, windows, doors; unsafe balconies; plumbing leaks and sewage backups; electrical hazards. In extreme cases, partial or catastrophic building collapse.
Infrastructure failures — Typical problems include defective construction and/or deferred maintenance of community roads, stormwater facilities. Especially in older communities, homeowners may pay a hefty price for failure of utility services, or due to damage caused by landslides and sinkholes. Lakeside and wetland area communities struggle with flood control, including failure of dams. If your community neglects them, expect decay and closure of recreational amenities.
QUALITY OF LIFE
Dictatorial governance and management — Watch out for heavy handed enforcement of rules and restrictions by either developer or owner-controlled HOA boards. Selective enforcement is also common.
Social discord — HOAs can be litigious environments. Bitter disagreements among neighbors are all too common. Don’t be surprised by internal division over the HOA budget and spending priorities. Be ready to cope with a nosey neighbor who looks for opportunities to report rule violations to the HOA.
Onerous covenants, restrictions and rules — You’ll have limited control over how to use your property to best suit your needs. For example, expect obstacles to adding a pool, patio, or fence to your property. You’re also likely to face HOA opposition to running a business from home. In crowded townhouse and condo communities, your HOA might even object to the kind of vehicle you own and where you can park. Disputes over pet ownership are also common.
Learn more about HOA risks and disadvantages
Click on each article preview to read more about pervasively common HOA problems. Then explore IAC’s many informative articles posted on the blog.
Journal publication:
HOA power relationship, problem-solving, and communication patterns during a major building renovation construction crisis
Michael J. Marshall, Shelly Marshall & Deborah Goonan
Pages 186-205 | Received 27 Jun 2018, Accepted 25 Sep 2018, Published online: 13 Oct 2018
https://www.tandfonline.com/eprint/KAsqezWPpfDgaAJ6uhG2/full
