House Exempted from HOA

by Danielle

Visitor Asks: Hello, I just bought a house in a subdivision with an HOA (homeowners association). The owner told me the house is not a part of the HOA and there is no reference to an HOA on the deed, and the attorney asked me about it because the appraisal assumed it was a part of the HOA. Someone told me it is one of a handful of houses that is not included because they predates the HOA.

I didn't pay too much attention because I was just planning on joining the HOA to be a good neighbor etc. However, I went to the first meeting and it seems to be a mess financially and organizationally.

I want to make sure they cannot force me to join now that the house has changed ownership? It is common to have a neighborhood with an HOA that has a handful of houses that are not required to join?

Editors Respond: As to whether the HOA can force you to join now that ownership has changed, you should go back to the attorney that you worked with originally and ask that question. We would think not, but then, we are planners and not attorneys; in addition of course we don't have the language of the documents available to us.

Your second question is whether this is a common situation. The answer is no, it isn't common, but it is not entirely unprecedented either to have a few homes that were built on large lots and later subsumed into a new development that has an HOA.

Let's look at the positive and negative aspects of this situation too. On the plus side, our visitor has learned that the HOA does not operate in a responsible fiscal fashion. This is quite common, so in some ways, you can consider yourself quite fortunate not to be paying fees into this poorly run outfit every month.

It's potentially a plus to not have to conform to every rule and regulation that the HOA chooses to put in place.

And of course the HOA cannot impose their monthly fee on you.

On the minus side, you cannot reasonably expect the HOA to enforce deed restrictions (covenants) on other property owners on your behalf.

You also will not have a voice in HOA decision-making, although it seems as though this particular HOA did not object to having you attend a meeting, so in practice, your voice may be heard.

It also might feel like a negative if the appraisal was higher than it might have been because of the assumption that the home is covered by the HOA. But if you plan to stay in your home any length of time, this really is not a problem.

Lastly, the HOA will not help you with any exterior maintenance issues that other residents who are HOA members may be entitled to. Often this exterior maintenance is minimal or non-existent on single-family detached homes though.

The big lesson here for our readers is to make sure that you resolve any conflicting information before you close on a house. Appraisers can and do make mistakes, as they are working under a lot of time pressure, just like everyone else involved in a real estate transaction. The appraiser may have been very familiar with the area and just made an assumption about the inclusion of the property in the HOA.

Previous property owners certainly are not a completely reliable source of information, but their reports of conditions pertaining to the real estate should not be ignored.

The attorney certainly should have been able to investigate this question thoroughly, and frankly it seems to us that the attorney should have done so unless there were some other factors we are not aware of.

Finally, we just want to address one underlying assumption that our visitor, Danielle, seems to have had. And that is that somehow HOA "membership" is like joining a voluntary neighborhood association. An HOA is not an organization that an individual property owner can opt into or out of. That's a lesson worth learning for all prospective home owners.

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