HOA & GOVERNANCE
From Listings to Living
A buyer sees the same line on almost every listing in a new subdivision: HOA, $215/month. Nobody explains what it buys, and by the time the question comes up, the answer is already fixed. You don't get to negotiate membership. You inherit it with the deed.
So ask the question properly. Why do HOAs exist at all, who decided this was how American neighborhoods would be built, and what is the association responsible for once you close?
Leevli EditorialLast updated 2026-09-17
Start with the physical reality. A conventional subdivision hands its streets, storm sewers, sidewalks and parks to the city, and the city maintains them with tax revenue. A community association subdivision doesn't. The stormwater ponds, the entrance landscaping, the private drives, the clubhouse and the pool stay in private hands, and something has to hold title to them and pay to keep them working.
That something is the association. Delaware's guidance for New Castle County homeowners describes it plainly: the entity is "comprised of all lot owners in a subdivision" and is "responsible for maintaining the open space and common facilities," including stormwater management facilities, parks and landscaping. It funds that work by assessing "each homeowner his or her pro rata share of the cost."
Virginia's Property Owners' Association Act says the same thing in statutory language. A property owners' association is "an incorporated or unincorporated entity upon which responsibilities are imposed and to which authority is granted in the declaration." Common area is property "owned, leased, or required by the declaration to be maintained or operated by a property owners' association."
Both definitions point at the same instrument: the declaration. That document is where the association comes from, and it explains why you can't decline.
The sequence is always roughly the same. Before the developer sells the first lot, a declaration is recorded in the county land records. It describes the property, sets out the covenants, identifies the common area, and gives a named association the power to maintain it and to charge owners for the cost.
Because it's recorded against the land rather than signed by an individual, it travels. Delaware's manual is blunt about the consequence: the recorded documents "bind the land perpetually," and "by acceptance of the deed, a home purchaser automatically becomes a member of the maintenance corporation."
That is the honest answer to "are HOAs mandatory." Membership is not a subscription. It's a property interest, and you acquire it the moment you take title. There is no resignation letter. Terminating an association usually requires a supermajority of owners, and often mortgage lender consent as well, with the exact threshold set by your state's statute and your own declaration. If you're seriously exploring that, start with the declaration and your state's planned community or condominium act, not with general advice.
The practical upshot for buyers is that the reading happens before the offer, not after. That's what the hierarchy of HOA governing documents is for.
This arrangement is newer than most people assume. Homeowners associations were rare until the 1960s, according to economists Wyatt Clarke and Matthew Freedman, whose study of HOA growth describes the shift as one of the most significant privatizations of local government functions in American history.
The numbers show how fast it moved. The Foundation for Community Association Research counts roughly 10,000 community associations housing about 2.1 million residents in 1970. Its 2025 Statistical Review counts 373,000 associations, 29.6 million housing units and 78.1 million residents, which works out to more than a third of U.S. housing stock.
New construction is where the model is now close to standard. Using the Census Bureau's Survey of Construction, NAHB found that 65.7% of single-family homes completed in 2024 were in a community association. Regional spread is wide: 81.6% in the Mountain division, 32.5% in the Middle Atlantic. If you're shopping newer inventory in Arizona, Nevada, Florida or Texas, an association is the base case, not the exception.
You'll often read that cities require developers to form HOAs. That's a simplification, and in some places it's simply wrong. The League of Minnesota Cities tells its members that cities cannot mandate them: "The decision to establish an HOA or maintain private common areas is entirely up to the developer." Cities may reference an association in approval documents to identify who owns what, but they don't run it and don't enforce its rules.
What's better supported is the fiscal pressure underneath. Clarke and Freedman found HOA price premiums are larger in metro areas where local government revenue and spending on services like police and administration are lower, and larger where public zoning is weaker. Their reading is that associations function partly as substitutes for local government and partly as private zoning. Developers, for their part, get denser, more flexible site plans by keeping streets and open space private, and they avoid building infrastructure to the standard a city would require before accepting it.
Put together: nobody forced the model into existence everywhere. It grew because it solved problems for developers and for cash-constrained municipalities at the same time, and buyers absorbed the maintenance obligation as part of the purchase.
Day to day, the association's job list is narrower than its reputation suggests:
Enforcement is also more procedural than most residents expect. In a number of states, an association cannot simply issue a fine: it owes written notice, a chance to cure a curable violation, and a hearing on request, with deadlines fixed by statute. Other states leave the process almost entirely to the governing documents. Which world you're in depends on where you buy, so read your state's planned community or condominium act alongside the declaration rather than assuming a national rule.
Clarke and Freedman found homes in HOAs sold for at least 4% more than comparable homes outside one, roughly $13,500 at the time of their study. The premium was largest on new homes, about 8.3%, and faded with age until it was close to zero for homes over 40 years old. Their rough accounting put the value received at about $1.19 per dollar of dues. Those figures reflect sales data from before 2019, and dues have moved considerably since, so treat the direction as more durable than the decimal.
Resident sentiment points the same way without being unanimous. In the Foundation's 2024 homeowner satisfaction survey of 3,006 residents, 86% rated their experience as good or neutral, and 63% said the rules protect or enhance property values. The two most commonly named downsides were paying dues, at 18%, and restrictions on exterior improvements, at 17%.
Those complaints are real, and they deserve a serious answer rather than a brochure. That's the job of our counterpart piece on the honest case against HOAs, which walks through the financial risks and the red flags you can verify before you buy.
If the association is going to exist whether you like it or not, the useful question changes. It stops being whether the neighborhood has an HOA. It becomes whether this particular association is solvent, competent and clear about what it charges for.
Three documents answer most of that: the declaration, the current budget with its reserve contribution, and the most recent reserve study. Read them together. A low monthly fee with a thin reserve is usually a bill you haven't received yet, which is why high HOA fees are often the wrong thing to be afraid of. And if the closing documents say "property owners association" rather than HOA, read how a POA differs from an HOA and a condo association before you assume the rules work the same way.
Then do the part documents can't do. Ask people who already live there what the board is like, how fast maintenance requests move, and what the last special assessment was for. If you're looking at association-heavy markets, our Scottsdale neighborhood guide is a reasonable place to start comparing communities before you narrow to a single address.
The declaration says what the association is supposed to do. The people paying the assessment know what it does.
Listings show the property, but they rarely explain the lived reality around it. On Leevli, a mover can explore the city, review neighborhood and building information, and ask a verified resident the specific questions that remain unanswered. That human layer helps readers know what to investigate before signing a lease, making an offer, or choosing between two addresses.
In a community governed by a recorded declaration, yes. The covenants are attached to the land rather than to a person, so buying a lot inside the described property makes you a member automatically. Delaware's guidance for New Castle County owners puts it directly: the recorded documents bind the land perpetually, and acceptance of the deed makes the purchaser a member. Plenty of neighborhoods have no association at all, and that is decided long before you shop.
Not as an individual owner. There is no cancellation form, because membership is a property interest rather than a subscription. Refusing to pay does not end it; it produces late fees, interest and eventually a lien. The only route out is selling the property, or dissolving the association entirely, which is a community-wide process rather than a personal one.
It holds or maintains the common area, which covers private roads, stormwater facilities, open space and amenities, and in a condominium the building envelope and mechanical systems. It insures shared property, adopts a budget, collects assessments including reserve contributions, enforces the covenants through a defined process, and keeps records such as minutes, reserve studies and insurance certificates that owners can request.
The developer records a declaration in the county land records before selling the first lot. That document describes the property, sets out the covenants, identifies the common area and names an association with authority to maintain it and assess owners for the cost. An entity is usually incorporated alongside it, with articles and bylaws governing how the board is elected and how it operates.
They answered two problems at once. Developers could build denser, more flexible site plans by keeping streets and open space private, avoiding the construction standards a city demands before accepting infrastructure. Municipalities under fiscal pressure avoided taking on maintenance they would have to fund from taxes. Clarke and Freedman's research found HOA premiums are larger where local government spending on services is lower and public zoning weaker.
Usually not, despite how often it is repeated. The League of Minnesota Cities tells its members that the decision to establish an HOA or maintain private common areas is entirely up to the developer. A city may name the association in approval documents so the record shows who owns and maintains what, but it does not run the association or enforce its rules. Practice varies by state and by municipality.
Sometimes, and rarely easily. Termination normally requires a supermajority vote of owners set by your state statute and your declaration, and often the consent of mortgage lenders holding interests in the property. Someone also has to take over the common area, whether that is the municipality, a new entity or the owners directly. Start with your declaration and your state's planned community or condominium act.
Most of them. Using the Census Bureau's Survey of Construction, NAHB found 65.7% of single-family homes completed in 2024 were in a community association. The regional spread is wide, from 81.6% in the Mountain division to 32.5% in the Middle Atlantic. If you are shopping newer inventory in Arizona, Nevada, Florida or Texas, an association is the base case.
Clarke and Freedman found homes in associations sold for at least 4% more than comparable homes outside one, around $13,500 at the time of their study, with the largest premium on new homes at about 8.3% and close to nothing for homes over 40 years old. Their accounting suggested about $1.19 of value per dollar of dues. That data predates 2019, so treat the direction as sturdier than the decimal.
The declaration, the current budget with its reserve contribution line, and the most recent reserve study, read together rather than one at a time. The common mistake is treating a low monthly fee as good news. A thin reserve against aging roofs, elevators or private roads is a special assessment that has not been voted on yet, and it lands on whoever owns the unit that year.
Editorial review: verify current federal and state law, insurance regulations, HOA and condominium statutes, and lender guidelines before relying on any single claim. This article is informational and does not constitute legal, financial, tax or insurance advice.
