Roughly 75 million Americans live in a home governed by a homeowners association. HOAs can fine residents, place liens on property, foreclose for unpaid dues, and dictate paint colors, landscaping, holiday decorations, and what kinds of vehicles can be parked where. They wield governmental powers, but they were structured under contract law to evade most of the constitutional and procedural constraints actual governments face. The arrangement has gotten less defensible as it’s grown.
How the legal framework was built
Modern HOAs trace to mid-20th century developer-driven master-planned communities. The legal architecture, refined through state-level Common Interest Development laws and the federal Fair Housing context, treats the HOA as a contract every buyer voluntarily accepts when purchasing a home. In the original logic, this is just private contracting — an HOA is no more coercive than any other contract you sign.
The trouble is that the contract is rarely negotiable, often hundreds of pages long, and binds future buyers who never sat at any table. In many metropolitan areas, particularly in the Sun Belt, finding a non-HOA home in the relevant price range is nearly impossible. The “voluntary” framing collapses when the alternative is leaving the regional housing market entirely.
Powers without proportional accountability
A municipal government that wanted to fine residents thousands of dollars for paint color or trash can placement would face procedural due process requirements, public meeting laws, and elections governed by state and federal voting rules. HOAs operate under far weaker constraints. Board elections often have low turnout, are sometimes dominated by retirees with the time to attend meetings, and rarely face the contested-campaign dynamics that characterize even small-town politics.
The foreclosure power is the most striking. In several states, an HOA can initiate foreclosure for unpaid dues that may total only a few thousand dollars, and the legal protections owners get are weaker than those for mortgage foreclosures. ProPublica and other outlets have documented cases where homeowners lost six-figure equity over disputes worth a few hundred dollars in fees. State legislatures have begun adding protections, but the patchwork is uneven.
Where reform efforts stand
Several states — including Florida, Arizona, Texas, and California — have passed reforms over the past decade tightening HOA disclosure rules, capping certain fines, and adding procedural protections in foreclosure cases. Most reforms come after specific scandals rather than as part of a coherent rethinking. Industry trade associations representing HOA management companies have generally lobbied against more substantial restructuring.
Academic legal scholars, including Evan McKenzie, who has written extensively on private residential governance, argue that the basic problem is structural: HOAs were designed as developer tools, not as self-governing communities, and the legal framework still reflects that origin.
The takeaway
HOAs are not inherently bad — many provide real value, particularly in maintaining shared amenities. But the legal framework treats them as private contracts even though they exercise governmental powers, and the result is a category of authority with thinner accountability than any actual government. That gap is overdue for serious legislative attention, and most state houses have barely started.
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