We’ve all heard of these “Home Owner Associations”. Chances are you know someone who lives within one, or you yourself live in one. In fact, as of 2009 over 60 million people lived in HOA communities. But what is a HOA? Who runs it? Who governs them to make sure they are operating within reason? There are so many unanswered questions and unknowns and because each is separate from one another, you really must perform your own research on your own HOA to find the hidden truth.

Hidden Truth #1: HOA can foreclose on your home.

Yes this is true! If you get behind on your fees, the HOA can foreclose on your home. Hypothetically, let’s say you own YOUR house free and clear and its current market value is about $200,000 and you start to fall behind on your dues, let’s say $3,500. Well say goodbye to your house and all your #200,000 equity! The HOA can choose to foreclose on your property and auction off your house, leaving you with nothing.

Hidden Truth #2: HOA decide how much to charge you per month.

Picture this, there are a small group of members who come together to decide not only what colors you may paint your house, how tall your fence must be, how your lawn must look and even what you must use to make it look the way they want, they also dictate how much to charge you. HOA’s must have a cash reserve and if the cash reserve is running low, guess what? Your dues go up! And don’t even think about not paying those dues…..yes you guessed it, you could risk foreclosure. If there is a dispute about increased rates then you need to become very neighborly very quickly and gather as many other homeowners as you can and then obtain legal representation.

Hidden Truth #3: HOAs lay the law of the land.

This group, no longer just homeowners, but “special homeowners” get together to decide the rules and fines of the subdivision. They get to decide what goes and what is not allowed. In a perfect world, it may not sound so bad but what if you get the egotistical who elects all his/her friends to become board members. Then would all of their decisions be the best interest of the entire community or just theirs? One of the scary things about HOA is that not a lot of state laws cover HOA issues and most politicians and government turn a blind eye and so it leaves you wondering who is monitoring HOA’s to make sure they are in compliance or reasonable? It’s a touch battle to contend with if you aren’t really sure your rights, even more so if your rights aren’t even established.

The hidden truths don’t stop here so yes, go ahead and pull out the HOA handbook and read, read, read! As I mentioned before, every HOA is different and have different rules, different expectations as well as different remedies they may exercise should you be in default of any of those. You need to know what exactly power they have and you need to know a good attorney!