Home Owner's Associations Good or Bad?

I have lived in a guard-gated community with a Home Owner's Association (HOA) for about 16 years, so I'm not just writing this article strictly from an appraiser / appraisal / broker perspective but also from an owner's perspective so my opinions are colored by my own HOA and the HOA's that I have dealt with over time.  I got into my HOA with my eyes open and I read the CC&R's and HOA documents.  My experiences has been entirely with Nevada HOA's and not HOA's in other states. 

I am sure that other people have had different experiences with HOA's than I have, so you are only going to get one perspective here, but I'm sure that there is a great many opinions posted online.  

Personally I think that there are positive and negative aspects associated with being in an HOA.  The obvious benefits include; the enhancement of privacy gain by being in a gated or guard gated community.  You can have community upkeep of common area pools, common area parks and you can benefit from the enforcement of a number of community rules as laid out by the CC&R document. 

One of the problems with many Nevada HOA's, especially those associated with luxury properties like Las Vegas Strip area condominium buildings is that the monthly HOA fees are, in my opinion, outrageous and the HOA fees often pay little or none of your monthly ownership expenses.  I have looked hard at the benefits provided and for my money the value simply isn't there.  There are exceptions, you can pay an Association fee of $ 480 a month at The Martin for a 2 bedroom, 2 bath condominium and get some of your expenses included in your payment or you can pay an Association fee of $ 895 for a larger 2 bedroom, 2 bath condo at Metropolis for fewer paid expenses.  When you get over $ 1,000 a month for HOA fees in my opinion you have lost touch with the reality of HOA costs and you are paying for exclusivity.

Nevada law had sadly given HOA members few rights.  Of course what would you expect from a structure written by builders to protect themselves?  So HOA's have a free hand when it comes to taking advantage of their members.  My HOA sends me demands to comply with visual problems that they see on my property, they theaten fines and they have a list as long as your arm that they will impose if you don't comply, but they never take the time to see if I have complied.  They just wait to see if someone else complains about my "problem," then they will fine me if it doesn't appear that I have complied.  The HOA will fine me for not trimming my landscaping while turning a blind eye to a neighbor who has destroyed the paint on their home with watering or they will fail to find 3 other neighbors who park their huge trucks on the street 24-hours a day have any violation problem even though the CC&R's specifically state that its a problem.

So one of the biggest problems with Nevada HOA's is that they do not uniformly apply the rules, and I see that as a real problem.  You my feel safe because you have a controlled common area entry and you might think its great to have the HOA trim the landscaping or the park in the common areas, but if they discriminate against you the annoyance and anger outweigh the benefits.  

HOA fees are also a serious problem.  If you have watched anything in the press you have seen how HOA's have actually taken properties from individuals via foreclosure.  Again, too much power have been given to them and homeowners are hurt.  My HOA recently sent me a list, they charge $ 50 for a fine notice, $ 100 for sending you an "intent to lien" and $ 325 to record a lien.  It goes on and on and they can run up an outrageous bill and give you no notice that they have been doing it.  Then send you a letter and say "you are 60 days late on the $ 1,000 we charged you," when you never got a notice that you owed a dime.  Again, that is not tolerable when it comes to banks or anyone else, and it should not be tolerabe for HOA's!

When you find that you can't sue the HOA, you can't arbitrate with the HOA, you can't mediate with the HOA you realized just how bade the HOA situation is.  You can contact the Ombudsman, that's a joke, and make a complaint.  Good luck with that dispute method.

After all these years of paying my HOA about $ 900 a year in fees, that's over $ 15,000, for common area benefits and having to live with the torture of their notices, fines, discriminatory request for CC&R compliance, attempts to put cell tower in the common area and dealing with their actual fines that should not have been imposed, I would say that I would absolute not purchase another home controlled by an HOA.  This was my first and it will be my last home within a Nevada HOA.  As a real estate appraiser and a real estate broker I can say without reservation that it has been more painful to deal with an HOA than to deal with any other entity that I have had to deal with, and that includes the military and the IRS.       

For more appraisal information contact Glenn J. Rigdon MA, MRICS, ASA is a Las Vegas / Henderson Nevada based appraiser who can be contacted via email or via his business website known as Appraiser Las Vegas  (http://www.appraiserlasvegas.com), or you can also click on “Contact Us” on the home page of this website or visit my public profile at LinkedIn at http://www.linkedin.com/pub/glenn-rigdon-ma-mrics-asa/1a/30b/879/

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