HOA Pros and Cons

Homeowners’ Associations Pros and Cons

  Question: We sold a mobile home park we owned in Nebraska, and we are now looking at homes in the Phoenix area to retire. We are not familiar with the benefits and burdens of homeowners’ associations which seem to be very common in the Phoenix area. In Nebraska we had rules and regulations governing our mobile home park, such as no junk cars and speed bumps to slow traffic, so we believed that we would want to live in a community with a homeowners’ association. What is the downside to a homeowners’ association?

  Answer: The concept of homeowners’ associations is that homeowners in the community who are volunteers are elected to serve without pay on the board of directors to enforce the recorded CC&Rs governing the community. Potential buyers of a home are generally furnished these recorded CC&Rs before close of escrow. If they don’t like the recorded CC&Rs, they can generally cancel the purchase of the home. Although there are significant benefits that are similar to those you experienced in your Nebraska mobile home park, there are downsides to homeowners’ associations. One downside is when members of the board of directors, usually the president, strictly enforce minor violations of the CC&Rs. Another downside is when a board of directors, usually in large homeowners’ associations of hundreds of homes, gives too much control to the property management company that is not responsive to the needs of the homeowners.