HOA Horror Stories

There are few things more delicious than a homeowners association horror story. All over the internet, you can find stories of people getting fined for parking their vehicles in their driveways, having a potted tomato plant on their back porches, or leaving a bottle of Gatorade outside for one day. In Tennessee, a man returned from vacation to discover his car was missing; he thought it had been stolen, but his HOA had towed it because it had a flat tire. A Maryland HOA fined a homeowner $40,000 because the fence she built was 8 inches too long. A Missouri HOA threatened a family with jail time because they’d put up a play set that was — horrors! — purple.

It’s easy to laugh at the ridiculousness of so much of it until you find yourself peeking through your curtains, trying to catch your neighbor putting her trash can out five minutes early. The absurdity of the situation, considering she reported you to the HOA for leaving up your Christmas lights past the New Year, is just too funny.

HOAs, condo associations, and co-op boards — all private forms governing common-interest communities — are increasingly becoming an inevitability of homeownership in America. According to a 2020 Foundation for Community Association Research report, some 73.9 million Americans — more than a quarter of the population — live under such an arrangement. More than 75 percent of new housing built for sale is part of a community association. In other words, if you own a home in the US today, you’ve got a one in four chance of living under an HOA. (I will use “HOA” as the blanket term here for this article.)

Not all HOAs are evil. With people living in close proximity, it makes sense to set some general rules and guidelines for peaceful coexistence. But it’s hard not to look at their setup and think they’re at least suboptimal.

HOAs exist in service of community well-being, which is often code for preserving property values, making developers rich in the process. They have a history of being discriminatory and exclusionary. They are micro-sized super-local governments largely left to their own devices by the actual government, allowing them to exercise enormous, unchecked power. In a nutshell, HOAs are local government privatization on hyperdrive.

“This is the most widespread, dramatic privatization of local government functions that has ever happened. That’s essentially what’s happened. These private governments do all the things that local governments traditionally do. And it’s unregulated,” said Evan McKenzie, a political science professor at the University of Illinois Chicago.

HOAs mean dollar signs for developers (and save dollars for cities)

Homeowners’ associations in the US have risen since the 1960s, resulting from the suburban housing development boom.

In modern-day America, HOAs —usually set up as not-for-profit private corporations — persist and have proliferated as part of a win-win deal for real estate developers and cities. A developer goes to a city offering to put a new subdivision in, offering to build out private streets and put in a private pool, sewer system, and whatever else to try to attract buyers, who will subsequently wind up paying for those amenities through fees. The likely cash-strapped city likes the deal — that way, it doesn’t have to put in the street or sewer system or deal with the pool.

“Real estate developers and cities see dollar signs with private governments. If you create a private subdivision or ideally a condominium, you can get much greater density, and the developers can get more houses on less land,” McKenzie said. “Cities love this because they get a whole bunch of new taxpayers paying a full property tax, and they don’t have to provide the services to them that they have to provide to everybody else.”

The deal is supposed to be suitable for homeowners, too. People get rules of the road, like that their neighbors won’t be blasting music at 3 am, and they get access to that private pool if there is one. HOA-governed properties can also be worth more — one 2019 study found that houses in such subdivisions are worth at least 4 percent more than similar houses outside of HOAs.

Being in an HOA makes your housing value go up. However, most of that value is captured by the developer, and over time, that extra value diminishes as properties age and houses start to turn over. The fact that you’re in this unit, over time, becomes less and less valuable.

Trying to keep that property value up is, by and large, the primary function of the HOA, and the way it accomplishes that is, in part, by enforcing all sorts of rules. The underlying theory is that everything staying the same and sticking to the original plan is the best way to maintain property values, so the houses must be some shade of beige. The curtains must be visible from the street, the mailboxes have to be a specific color, and the lawns must be maintained and watered. The idea is that this is good for property value.

Don’t like your HOA? Good luck.

The big issue with HOAs is that if you’ve got a problem with them — or they’ve got a problem with you — it can be quite a dilemma. Association rules aren’t just kind little suggestions; they’re enforced through fines and liens and, in extreme cases, even foreclosures on people’s properties. And if you want to fight back against your HOA, you might be out of luck.

States and courts are generally hands-off when it comes to dealing with HOAs, explained Michael Pollack, a professor at Cardozo Law School specializing in property law who has written about the way courts do — and don’t — handle HOA rules in the past. “Most states have some statute on the books that says something about the circumstances under which a court should not enforce a particular HOA rule or something like that, but usually, those statutes are written to say something like a court should not enforce a restriction or the rule if it is arbitrary or against public policy, which is a very narrow set of things,” he said. “It’s almost unheard of for a court to intervene in the day-to-day.”

Part of the philosophy here is that “the market” is supposed to address the problem independently and punish HOAs with bad rules or overzealous enforcement because people will not buy in those communities and will flee. But that’s not how it works in practice. Often, buyers don’t fully know the consequences of buying in a development ruled by an HOA or even see the rules and regulations ahead of time. Buyers trying to sell might not be so open about the association, nor will the broader community trying to keep property values up. And in many communities, HOAs are the only game in town. In New York City, for example, you’ve practically always got to buy an apartment in a condo or co-op building — and in a co-op, the board can turn prospective buyers down.

“Courts tend to take the view of, look if you don’t like it, you can leave, or you can work within the community to change things, exercise your voice,” Pollack said. But it’s not so easy to pick up and go; it’s financially and emotionally costly to move. Being on an HOA isn’t a particularly rewarding or fun job, either. It’s unpaid, thankless, and can be a lot of work. Sometimes, the people on the boards are the ones who are most eager to impose rules on their neighbors. “That creates the sort of predictable consequences that we see, which are boards of similar compositions remaining in place with pretty unhappy communities,” he said.

Michael, who asked to use a pseudonym to protect his privacy, says most of his experience serving on his HOA board about a decade ago in South Florida was ho-hum, except what to do about invasive snakes and alligators living in the nearby Everglades, which some board members were “obsessed” with. “I felt the emphasis on large reptiles was quite unnecessary, but if it helped people feel safe, then who am I to complain about it,” Michael said, noting that just a few people had died because of alligator attacks in the area over the years.

Apart from dealing with the reptile situation, board members would drive around once a week with a checklist to ensure everything in the 24-house subdivision was in order, ensuring lawns were mowed, trash was in order, and driveways didn’t have any cracks. I asked Michael why a crack in the driveway would matter — it’s not like it affects anyone else. He responded that people could see it, and there were golf courses in the area, reassuring me that the weekly drive-by situation “really is not as bad as it sounds.” The potential killer alligator situation he’d seemingly minimized did sound quite bad compared to some driveway cracks, but we moved on.

Whenever someone tells me a story about their homeowner’s association or co-op board, I send them this 2021 Wall Street Journal gem that likens co-op boards to “Ted Bundy, whoever designed Gmail, and bad paper cuts” and large condo boards to “airplane passengers who clip their nails in flight.” In the future, I will also be sending them this Last Week Tonight segment with John Oliver on HOAs, in which he describes state postures toward people looking for legal remedies to deal with their associations as “You’re screwed!”

HOAs can do a lot of things that the government can’t do. They can tell you what signs you can and can’t put outside your home because the First Amendment protects your right to free speech from being infringed on by the government but not by a private entity. They can tell you that your truck must be parked in the garage or not parked at all because they don’t want the neighborhood to look too “working class.” They can’t overtly say they don’t want people of color in the subdivision, but they can make it very hard for people of color to get in.

There is no good fix to HOAs in the US, and truth be told, they’re not going away. But are there ways to make them better? Tighter regulations — which developers push hard to avoid — could be a start. There’s also a conversation about why municipalities are so cash-strapped, which is part of what drives them to allow for more private subdivisions and condos in the first place.

McKenzie pointed out that more attention needs to be paid to how much money these associations and boards have, in order to make sure they can make repairs when necessary and buildings don’t entirely go under. In some scenarios, condo associations have to sell buildings off entirely. Or, in the direst scenario, you end up with the Surfside condominium collapse in Florida in 2021, which killed nearly 100 people after the building had trouble getting residents to put up funds to pay for repairs.

These unaccountable little governments could be held a little more accountable. The only way to make it work long-term is for the government to take on a more assertive role.