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Refusing To Join An HOA: Can It Be Done? How To Opt Out of an HOA

Buying a home or condo is a costly process. On top of the down payment, mortgage, and closing costs, some properties come with yet another added set of fees and requirements from an HOA.

An HOA for a neighborhood or condo building generally works in residents’ favor, but participation in it means that you’ll pay a monthly fee and have to abide by certain requirements. Not all homeowners are interested in this, which leads to an important question: How can you opt out of an HOA, if possible?

Let’s break down how an HOA works and how it might (sometimes) be avoided.

What Exactly Is An HOA?

An HOA is a homeowners association, a part of the community that oversees maintenance of the building or neighborhood and also sets guidelines and restrictions to try to ensure a certain level of cleanliness or attractiveness of the spaces shared by residents.

Understanding An HOA

To some of us, this might not sound very fun. Who wants to buy a house if you can’t paint it whatever color you want? While homeowners associations typically have mandatory restrictions, they also help keep the community or building maintained.

Imagine that you buy a condo in a building. While you own that condo, you are also using a large amount of shared aspects of the building, like the plumbing, electricity, any shared yard or common areas, and parking. An HOA collects payments from residents to ensure that all of these stay up-to-date and are serviced or repaired as needed. These monthly payments go towards expensive costs like replacing the roof or re-laying asphalt for a parking area.

Can you opt out? Two Types Of HOA’s:

HOAs are generally beneficial both to homeowners’ quality of life and to the value of your property. They also function as a way for each homeowner to have a say in how to maintain the neighborhood.

However, there are scenarios in which a potential homeowner may not want to join the HOA or wants to buy a property but can’t afford the HOA fees. Whether or not they will be able to buy without joining the HOA depends largely on what type of association it is.

Voluntary HOAs

Some HOAs are voluntary. This usually applies to HOAs that give access to communal facilities, like tennis courts or a swimming pool. If you opt out of this type of HOA, you won’t have access to these amenities (although you may be able to use them by paying a fee).

These types of HOAs don’t have the authority to enforce guidelines on homes that don’t belong to the HOA. This means that even if you haven’t cut your grass or repaired a huge hole in your driveway, the HOA can’t make you repair it.

Mandatory HOAs

Other HOAs are mandatory. Homeowners who buy property in a building or neighborhood with a mandatory HOA will have to sign an agreement at closing saying that they will participate in the HOA and will pay the HOA fees.

How To Opt Out Of An HOA

If you want to opt out of your HOA, you’ll need an in-depth understanding of how your contract and the HOA’s legal documents outline grounds for leaving. You’ll also probably want to hire an attorney to help you with the process.

Here are five general ways or causes that may allow you to leave an HOA:

1. The de-annexation clause

Not every HOA has a de-annexation clause, but even with one, leaving the HOA will most likely prove difficult. A de-annexation clause usually explains that a homeowner can leave the association with a majority approval of other members, which is typically unlikely: after all, if you leave, their fees may go up for repairs, and your unit or home will no longer be required to maintain the same appearance, which could change perception and experience of the neighborhood or building.

2. The HOA doesn’t do its job

HOAs come with the responsibility of upholding the requirements outlined in legal documentation and for overseeing necessary repairs and upgrades over time. If the HOA has failed on one of these counts, you may be able to make an argument with the lawyer that you can leave the HOA because it is not doing its job.

This process often takes up to a few years and involves meticulous examination of an HOA’s records. It’s only advisable to take this step if you are ready for a long, drawn-out process and are confident that a court will rule in your favor.

3. The HOA treats you unfairly

The HOA is responsible for upholding the entire community’s best interests consistently, and that means that each individual family and homeowner should be treated with fairness and without discrimination. If you have reason to believe that the HOA has treated you unfairly, you can take your case to court.

4. Your house should have never been in the HOA

HOAs are often formed for pre-existing communities and neighborhoods, and it’s not always clear where an HOA’s jurisdiction begins and ends. It always works in favor of an HOA to accept another member (since it means higher profit for the community), and some homes are unofficially annexed into an HOA. If your property lies outside neighborhood bounds or if it doesn’t gain from HOA improvements or maintenance as much as other properties do, you may have an argument to take to court that it should not be included in the HOA.

5. You were never told about the HOA

At closing, the documents you sign should detail whether or not your property will be part of an HOA. If you weren’t informed about an HOA or the potential to create one, you can argue to a judge that your property should be exempt.

Of course, you’ll need to be able to prove that you weren’t informed about the HOA. Closing includes a lot of complex documentation, which is why it’s good to have a lawyer to help you draw up your case.

Involvement With An HOA

An HOA might cost additional money but generally serves to the benefit of all residents when it comes to maintenance and quality of life. However, unfair treatment or deception are valid causes for leaving an HOA. If you choose to try and opt out of your HOA, make sure to get legal aid to help keep the process as smooth and efficient as possible.

 

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All material is presented for informational and educational purposes only and should not be construed as individual financial, investment, or legal advice or instruction. ZeroMortgage does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by ZeroMortgage. ZeroMortgage, its affiliates, and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action. ZeroMortgage does not provide tax advice. Please contact your tax adviser for any tax related questions.

This page last updated: March 21, 2022