HOA Horrors and How Not to Fall Victim to Them | AOL Real Estate
"When purchasing real estate, you might be one of the 25 percent of people who purchase a property in a common interest development, which is more commonly known as a homeowners association, or HOA. And while all properties have issues, HOAs have a unique set of additional operational, legal and financial issues that buyers must consider, analyze and review in conjunction with their purchase.
Because many horror stories are associated with HOAs, some people won't even consider buying into one, which is understandable. It's ultimately a personal choice for a buyer to consider. These are few of those HOA horror stories."
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Wow. The press has really sunk its teeth into this "horror story" angle. No wonder the industry keeps paying for polls showing how happy everybody is.
1 comment:
The biggest flaw in this article is the suggestion that one could have avoided problems by "reading the documents" prior to purchase. The "avoidance" technique was a decision to avoid purchasing based upon the content of the documents.
While I certainly agree with the "avoid purchasing" part the troubling part about the article is the implication that the problems with HOAs are going to be apparent or documented.
The examples were special assessments and non-rental clauses. However, the special assessments can be declared at any time AFTER a purchase without notice prior to the purchase. Also there is an entire industry of attorneys and HOA management companies that thrive off of financial hardships in HOAs. The encourage HOA boards to adopt anti-renting provisions. The homeowners can't sell and can't rent. It usually isn't much further before the homeowner is paying "late fees" and "attorney fees" to these vendors for being late paying HOA assessments due to financial hardship. Such restriction after-the-fact also promote litigation which the vendors profit from.
Many of the examples of problems were directed at condos yet these same issues arise with SFH projects on lots.
Perhaps the most troubling statement in the article was the following: "Yes, HOAs can be a huge benefit to real estate ownership,"
There was no support for this claim and I'm hard-pressed to find ANY benefit much less a "huge" benefit. The author gave no examples of such benefits nor how being burdened with perpetual liens that can never be paid off, involuntary membership, boards controlling every aspect of use and enjoyment of your property, private fining, etc. could have any upside.
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