Fact or Fiction: Homeowners Associations

There are voluntary HOAs and they can't enforce dues on neighbors. But if an HOA is mandatory, a seller is required to let you know before buying their home because when you sign the deed to the home, you're also signing into the HOA membership.

In some states, HOAs have the power to foreclose on and sell your home if you fail to pay dues. They can also lock you out of common areas, such as tennis courts and clubhouses.

Because paint color can change the aesthetic value of a property, an HOA can restrict paint colors you can use, right down to specific shades of certain colors.

HOAs get their power from the restrictions, or covenants, that were placed on the property by the developer and/or builder. The covenants are what HOAs are enforcing.

Mandatory HOAs can charge regular dues that can cost hundreds of dollars a month. The money collected goes toward maintaining common grounds and other work the particular HOA deems necessary.

A homeowner can request a variance that allows exceptions to the rules. Generally, though, the HOA board must hold a hearing to discuss and vote on whether or not to accept the variance.

HOAs can create whatever rules and bylaws they deem necessary for their community. So some neighborhoods actually have banned school buses because residents have complained of noise, damage to lawns and risks to elderly residents.

HOA boards have actually penalized residents for inadvertently allowing their tires touch the grass next to their driveway. One Florida resident's car was actually booted in her own driveway for this very "violation."

One Texas couple had paid off their $300,000 mortgage when their HOA foreclosed on them for failing to pay $800 in dues.

Pleasing aesthetics increases property value, so associations might regulate lawn care, vehicles, paint colors and other characteristics of a property that are easily seen from the street.

Directors are elected to their positions by member homeowners who attend the annual election meeting.

Board members have come under scrutiny because some have purchased (at auction for pennies) houses they had a hand in foreclosing.

The Community Associations Institute estimates about 62 million U.S. residents lived in 309,600 HOA communities in 2010.

Multiple surveys have been done to determine whether homeowners are satisfied with their homeowners associations, but the numbers vary widely. Some associations treat their members respectfully, whereas others do not.

Properties have been built with community associations that will govern them at a steady rate for 50 years. In the 1960s, about 500 HOAs existed in the United States. Today, the Community Associations Institute estimates there are more than 309,000.

So far, HOAs retain a great deal of power and authority over their members. Several bills, including one to limit their ability to foreclose on members, have been proposed.

Some HOAs charge residents fees when they sell their homes. Some charge a flat rate to transfer the HOA bylaws, etc. Others charge a percentage of the home's sale price, which some say is not fair because it's not a set fee across the board for all homeowners.

In 2009, a Texas HOA foreclosed on the home of a U.S. soldier on active duty in Iraq because his wife was behind on their HOA dues.

Taking your HOA to court could mean you end up paying not only the original fine, but also your legal fees and your HOA's legal fees.