Love, Money + Relationships

Will Your HOA Ruin Your Marriage?

Every week, I write a Pay Dirt column for Slate. This column was first published on June, 24 2024. I’m rerunning it so that all of my readers can enjoy it. Plus, if you live in a community with an HOA, I’d love to know any HOA horror stories you’d care to share.

Dear Pay Dirt:

My husband and I had a house built in 2020/2021. We were very lucky in some respects - we signed our mortgage in early 2021 so the interest rate is super low, and the house appreciated ridiculously in the first year we owned it. But it came with a lot of unexpected drama. It's complicated, but basically the neighborhood includes private roads and an HOA to maintain them, but we and most of our neighbors were unaware of the HOA, which was entirely inactive.

This year, a group of neighbors decided to organize the HOA and start collecting dues in order to start maintaining the roads and water lines. That pissed off another group of neighbors and now there are lawsuits. The reputation of the neighborhood is getting around and houses are getting harder to sell. I want to sell ours ASAP while we can still likely make some money off of it. I'm terrified that one day it will become unsellable due to the drama or failing infrastructure, plus all the animosity in the neighborhood is stressing me out.

My husband thinks this will blow over, that I'm being overly pessimistic, and that giving up our low interest mortgage is a terrible financial decision. I'm seriously considering divorce (and we have kids!), just to get out of owning this house. Is there any alternative I'm not thinking of? Or some source of unbiased financial/real estate advice that could convince one of us that the other's point of view is correct?

—HOA Ruined My Marriage

Dear HOA Ruined My Marriage:

I’ve fielded a lot of questions and complaints about HOAs over the years. But I’ve never seen anyone threaten divorce over one.

I’m going to side with your husband on this one. There are several reasons why selling and moving now would be a lousy financial decision. First, you have an amazing interest rate that’s probably half of what you could get right now. Second, if you do sell, you’ll have to buy something far more expensive, with a much higher mortgage interest rate. Sure, you’ll make money selling your current home, which you could keep tax-free (up to $500,000). And, that’s helpful. But if your monthly payment doubles because the next house will cost three times as much and the interest rate will be twice as high, your profits will quickly get eaten up by those higher costs. Finally, although I hope you weren’t being serious about getting divorced over HOA drama, that would really be a kick in the wallet. Divorce can cost thousands (or hundreds of thousands) of dollars, your assets would be split in half, and you’d need a significant boost in your income to maintain your standard of living.

Take a minute. I sense that you’re reacting to the drama. You want to live in peace and harmony with your neighbors, but of course, people are people. Life is expensive, particularly now, post-pandemic and no one wants to add to their monthly expenses. But roads and common elements need to be maintained. Insurance needs to be bought to cover the common elements, or if there’s an accident, you could be sued personally and as a member of the development. An HOA with a modest annual fee might actually cover all of these costs.

The good news is that lawsuits generally take a long time to wend their way through the courts. By then, the energy around these lawsuits will die down. If the HOA has been prescribed, then that’s likely where you’ll end up: With a community-run HOA that keeps the proverbial trains running on time. Those who are unhappy with the judgment will sell and move. And you and your neighborhood (and hubby) will move on.

If you’ve got any HOA questions or horror stories, I’d love to hear them. Please email me at questions@thinkglink.com. Or, leave a comment below.

---

Read More About HOAs and Condo Boards

Is this Homeowners Association (HOA) Good or Bad?

Is This Homeowner Association (HOA) Compliant with State Law

HOA: Changing Homeowner Association Rules

HOA Board: No One Wants To Serve

HOA Rules Contain Alarming Language

HOA Smoking Rules

Here’s the link to all the Homeowner Association articles.

---

Thanks for reading. I’ll type to you again, soon.

Ilyce