We shouldn't treat all homeowners associations the same. Some may offer benefits like community pools and sprawling common areas, while others can bring unexpected financial and social nightmares, like imposing huge assessments and mandatory upgrades.

As a realtor of over 20 years and a homeowner who's been on the board of an HOA, I can tell you firsthand that joining an HOA can be a double-edged sword.

You've probably heard of homeowners associations abusing their powers by changing rules and forcing fines on members in ways that don't seem transparent or ethical. Unfortunately, this happens more than you'd likely know. With that, it's important to understand the HOA of any community you're considering so you don't end up with big regrets at the end of the day.

Before you join an HOA, know this

A homeowners association is an organization in a residential community that creates and enforces guidelines related to home appearance, noise, parking and renovations, among other things. HOAs usually charge fees or dues to cover services, maintenance and shared facilities. 

Every HOA has its unique set of rules, financial health and community culture. Some are well-managed and provide excellent value, while others are mismanaged or financially irresponsible. 

If you're considering buying a home in an HOA, make sure to speak with members of the community to see how they feel the HOA is operating. Also, ask to review all relevant documents, including the HOA's rules, reserves, budget and more. These documents will give you a clear picture of what you're getting into, including any potential financial obligations and the association's responsibilities. 

You'll also find out who is on the board and the association's financial standing, which can be pivotal in avoiding future surprises. For example: Is money being put away to maintain the community over the long term? Also, see if a recent audit has been completed since that will also help give a good sense of its financial status. 

The downsides of HOAs

HOAs can come with several drawbacks that might make you reconsider joining one:

❌ Hidden costs

Beyond the monthly dues, there can be unexpected fees. Special assessments for major repairs or upgrades can be costly and financially draining. For example, a Florida condo association recently imposed a $134,000 special assessment per unit to comply with new state regulations. 

❌ Strict rules and restrictions

Are you someone who likes to park your RV or boat in the driveway or work on your car? HOAs often enforce rules that can limit your freedom such as where you can park. They can also impose strict restrictions on exterior decorations, parking or pet ownership.  

❌ Repair and maintenance pitfalls

Mismanagement or lack of transparency around residential conditions and maintenance can lead to financial instability, leaving homeowners to foot the bill for necessary repairs.

❌ Lack of accountability or oversight 

If the board isn't diligent, the community's funds might not be properly allocated, leading to increased fees or special assessments.

❌ Potential for conflict

Disagreements with the board or neighbors can lead to disputes that are difficult to resolve, causing tension and undue stress.

The perks of HOAs

While there are downsides, HOAs can also offer several benefits:

✅ Maintain the community

HOAs often maintain common areas and enforce rules that keep the neighborhood looking tidy and uniform.

✅ Offer amenities

Pools, gyms and other shared amenities can enhance your living experience, offering convenience, time-saving and ease with budgeting. 

✅ Provide safety

Gated entrances and security patrols can increase the safety of the community, giving you peace of mind and preventing you from having to invest in additional technology.

✅ Keep property values up

By maintaining a certain standard within the community, HOAs can help preserve property values, which is a benefit for equity and wealth-building.

Joining an HOA is a personal decision

Deciding to join an HOA is a personal choice. Before buying a home in an HOA, make sure to weigh the pros and cons, consider your lifestyle and preferences, and do due diligence.

While HOAs can offer a level of convenience and security, they can also impose restrictions and ongoing costs that make owning a home even more expensive. I've seen plenty of HOAs raise their fees to the point that it is hard for people to continue to afford to live in one.

As a potential homeowner, it's vital to read and understand the HOA documents thoroughly. Knowing what you're signing up for can save you from future headaches and financial burdens.

In my experience, HOAs are never as good or bad as people think. They usually fall somewhere in the middle.