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10 Biggest HOA Red Flags Homebuyers Should Run From (Quickly)

These common issues can be a sign that something is amiss.

By Andy Lindquist

Edited by Lauren Wellbank

Updated Feb. 28, 2025

Residing in a community that has a homeowners association (HOA) can be a great homeowner move. That’s because HOAs typically take care of shared amenities, give you a great sense of social cohesion, and keep your property values high.

However, if you’re planning on moving to one of these communities, there are some things that could be a warning sign that all is not as it seems.

Keep reading to learn about the 10 biggest HOA red flags that should have you digging deeper before you buy.

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High or rapidly increasing Dues

Compare the HOA dues (monthly fees) with those of others in the surrounding area. If the fees have rapidly increased in recent years or are incredibly high compared to the surrounding region, that could mean bad news.

Unless the property has some super swanky amenities to justify the high fees, you may want to consider looking at those less expensive alternatives located nearby.

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Low reserve funds

The HOA reserve fund is intended to cover any unexpected maintenance issues or other large-scale renovations to the property. If the reserves are low or non-existent, homeowners will be burdened to pay extra in the form of special assessments.

Be sure to do your due diligence and see proof that the HOA has the necessary funding in reserve. Otherwise, you could be on the hook for unexpected expenses.

Strict or excessive rules

Some rules make sense in an HOA community, but too many rules and restrictions are concerning. Do your research into the policies and rules and figure out how reasonable or unreasonable they are.

Some HOAs are incredibly restrictive and use punitive measures and surveillance against their members, which can create an unpleasant living experience.

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Board drama or high turnover rate

Considering the HOA board's outsized influence on the community, you’d be wise to look into how they operate. If the turnover rate is high or there are grumblings of drama within the organization, that could be a bad sign.

A dysfunctional board will be unable to properly manage the property, which can cause many issues.

Lots of litigatio

There are plenty of horror stories about HOAs getting into crazy lawsuits, so be sure to look up your prospective community and see what litigation has been filed. If the board constantly engages in petty legal squabbles, that’s a headache you may decide you’re better off avoiding.

Poorly maintained common areas

Look around the HOA's grounds and see how well the common areas are maintained. If they’re severely lacking in maintenance, that could be a bad sign.

One of the selling points of paying your monthly dues is that you will get sparkling common areas. So, if they’re not in tip-top shape, that means the board may not be doing its job on upkeep. And if they are lacking in that area, what else could they be letting slide?

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Escalating fines

Keep an eye out for the HOA's fine structure and whether there are constant or escalating fines.

If residents continue to rack up fines, that means they’re either apathetic about breaking the rules or the HOA is overzealous. Both of those situations are not ideal and could be deal breakers for would-be homeowners, so you may want to avoid them.

Restrictions on rentals

One popular investment strategy in the real estate world is to buy an HOA property and then rent it out, given its low upkeep cost.

If the association has restrictions on renting out units, that would make it difficult for you to use the property to further your investment goals.

Homeowners say negative things

When touring a prospective HOA, try to see if you can talk to any community members and gauge their feelings about living there. If you’re hearing overly negative reviews of life in the community or people are telling you not to live there, you may want to reconsider.

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Difficulty with amending rules

If the process to change the HOA's rules is convoluted or requires an excessively high number of yes votes, that might indicate that the community is resistant to necessary updates or input. This rigidity can hinder the HOA’s ability to adapt to evolving needs.

It can be exasperating to deal with all the political maneuvering required to get enough votes to change the rules, and your time and energy may be better spent in another community that’s more responsive and receptive to change.

Bottom line

If your current financial fitness is such that you can add an HOA fee on top of your new mortgage payment, purchasing a home in one of these communities could be a great benefit for you and your family.

However, just like with any purchase, it’s important to go into things with your eyes open and to do your due diligence to make sure that this community is right for you. Then, you’ll be able to enjoy your new home with peace of mind.

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