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Are HOA Fees Legal (The unfortunate truth)

Lights, water, gas, tax, groceries, cellphone, mortgage…the list of monthly bills seem endless. To add monthly HOA fees is often enough to tip you over the edge, particularly if you are unhappy with how your HOA is conducting themselves and governing the neighborhood with your money!

At some point or another, every homeowner comes to view their HOA as a criminal enterprise, laundering money from the unsuspecting public under the guise of HOA fees.

The unfortunate truth is that HOA fees are perfectly legal, provided the HOA is operating within the bounds of the law.

HOAs are legally established bodies governing communities within the bounds of the law. To carry out their duty, HOAs are permitted to collect fees to be used to better the community. HOAs are allowed to enforce fees and fines and apply penalties for late or non-payment and by-law violations.

HOAs Have Power to Impose HOA Fees

The primary reason why HOA’s have the power that they do is that the government gave them this power. HOAs are legally established to create policies and work within the bounds of the law to serve communities and ensure peace and harmony within a neighborhood. In order to carry out this function, the HOA needs to collect fees.

With HOA’s maintaining a serene and well-structured neighborhood, this lifts some of the governing burdens from the state and local governments. As such, they are valued by most state governments, and state laws acknowledge and approve of HOA fees, provided they are reasonable.

HOA’s also can have power through wealth. Some HOA’s are nonprofit organizations, but others are corporations, which means they accumulate a large amount of money. HOA’s with money will therefore have more resources, which will benefit them in an altercation or disagreement with a homeowner. However, they still have to operate subject to the law.

Businessman with cigar and money

Signing your homeowner’s contract also gives the HOA power. When you move into a home within an HOA community, you will have to sign a contract that contains what the HOA calls its “Covenants, Conditions, and Restrictions” (CC&Rs). These restrictions include guest restrictions (occupancy limits) as well as parking, renting, decoration, as well as the general appearance of the home restrictions. Limitations may vary by location.

When you sign this contract, it means you consent to be charged an HOA fee and to be fined for violating any of the CC&Rs. This is why it is important to read the document thoroughly, since the HOA may take advantage of you not knowing your rights.

Enforcing Fees Is Also in HOA Power

Violating the CC&Rs of your HOA can incur fines, and HOA’s have various ways of legally enforcing them, as well as legally enforcing the fees for being part of the organization.

First, before any extreme action is taken, the HOA will do the courtesy of giving you several warnings and enough time to correct whatever violation you’ve made. When these warnings have been ignored or the violation still isn’t corrected within the time they give you, the HOA has the legal power to add the expenses of unpaid fines or fees to your property tax bill.

Vintage 1940s gangster couple

The next step is a serious one, and will not occur unless your fees and/or fines are long overdue and you have had plenty of warnings.

The HOA can place a lien against your mortgage or property. A lien means, according to Can HOA Kick You Out Of Your House, “that they can make a financial claim on your property to use as collateral.”

A lien is not an eviction but is the first step to foreclosure. It can lead to refinancing and sales issues and means that your home is not entirely yours to sell or make changes to. Furthermore, the outcome of such a situation may be having to move out of your house altogether.

CC&Rs and state laws also give the HOA power to fully foreclose and not just place a lien against your property. This is an extreme measure used by HOA’s only as a last resort. Should you find yourself in this scenario, it is advisable to contact a foreclosure attorney.

Special assessments made by an HOA are another cumbersome and costly part of being a part of an HOA, but unfortunately, they are legal and needed.

Special assessments are extra fees separate from the usual monthly dues that are charged when the HOA is running low on funds and are often used for unexpected expenses. These kinds of expenses are often for disaster funds and are required for community maintenance.

Assessments are legal as long as they are explained in great detail in the HOA documents that you receive. They can be annoying but are often necessary for the well-being or improvement of your community.

Think of it as an unwanted pool (because it could literally be an unwanted pool!). You may not use it or enjoy it, but you still must pay for its upkeep and the initial installation. This is annoying for you, but your house will sell for so much more because a pool is considered an asset.

New Homeowners can be Liable for Previous Owner Debts

If you purchase a house with unpaid HOA fees, very often state law and CC&Rs will place joint liability on both the previous and the new owner. Now, if anything seems criminal, it’s this. Yet, it is possible because HOA fees are attached to the property more than the person who owns the property.

Homeowner Supposed to Benefit From Paying Fees

With all of these frightening aspects of being part of an HOA, it is valid to wonder why someone would choose to be part of one.

HOAs are established to ensure that a community is cared for and all residents are happy. The fees that they charge go towards neighborhood security the upkeep and improvement of communal spaces and areas that are visible to all residents. Sometimes, gas, lights, and water are also included in the fees.

HOA rules pertaining to the general appearance of the home are made to keep the neighborhood looking clean and attractive but also have less superficial effects. 

homeowners association document

HOA areas have greater property value because they are part of an HOA but also because the homes are held to a high standard by the HOA. Each renovation and change made to the home increases the property value which leads to homeowners selling the home for more money than it was initially worth.

In my opinion, the concept of an HOA is a good one. The issue is that, fundamentally, they are designed to only function optimally under ideal circumstances—circumstances that do not and never will exist. If the human race was intrinsically selfless as opposed to selfish, HOAs would work. Until then, in attempting to serve the community, HOAs will offend individuals, and be paid to do so.


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