HOAs Are Not Just About Rules.
- NV HOA Reform Coalition
- 1 day ago
- 7 min read
The Debate Is Too Often Framed as “Rules Versus No Rules”
Many homeowners like HOAs because they want maintained neighborhoods, amenities, and basic standards. That is understandable and accounts in part for their popularity over the past several decades. People do not want to live next to neglected property, abandoned vehicles, dead landscaping, or poorly maintained common areas. Many buyers also want parks, gates, pools, clubhouses, landscaping, security, or other amenities that are commonly delivered through HOA communities. But at what cost, under whose control, and with what safeguards?
Others object to HOAs because an HOA can exercise significant authority over property they own while charging them monthly for that authority. That concern is also understandable. An HOA is not simply a neighborhood beautification committee. It can regulate property use and enforce architectural standards. It can also impose fines with limited due process, collect assessments and record liens, hire managers and vendors, enter contracts, fund reserves, approve budgets, and make significant operational decisions that obligate owners without meaningful consent.
Standards and Limits on HOA Power Are Not Mutually Exclusive
The Nevada HOA Reform Coalition does not believe those views have to be mutually exclusive. A homeowner should be able to value community standards and appropriate amenities while still demanding limits on HOA power, transparency, and accountability. A buyer should also be able to evaluate the true cost, risk, and operational structure of those amenities before purchasing a home.
Under Nevada’s current HOA disclosure system, that is often not realistically possible. Buyers may receive governing documents, budgets, reserve studies, rules, and generic disclosures, but those materials rarely provide the kind of clear, practical risk disclosure needed to understand what they are inheriting.
A home purchase is not a pure buyer-beware transaction. Buyers rely on inspections, title review, seller disclosures, lender requirements, escrow procedures, and professional duties built into the real estate process. But when the home is in an HOA, the buyer is also entering a private governing system with assessment, lien, enforcement, budgeting, reserve, contract, and collection powers. Operational risks can be material in larger or master-planned associations providing amenities as part of the community property. Yet that part of the transaction receives far less meaningful scrutiny.
The Real Test Is What Happens When the Wrong People Control the System
A key difference in how people view HOAs is whether they have ever been exposed to a poorly run community or rogue board. Many owners have not. Their experience is limited to clean landscaping, basic rule enforcement, and amenities that appear to work. That can create a false sense that the system itself is fine.
But the real test of any governance system is not how it operates when reasonable people are in charge and no one is challenging them. The real test is what protections exist when the wrong people get control, when conflicts of interest appear, when rules are enforced selectively, when owners ask hard questions, or when the board, manager, developer, or vendors are not acting in the community’s best interest.
Buyers Cannot Realistically Inspect an HOA the Way They Inspect a House
Buyer can realistically identify a well-governed HOA before closing. But there is more to an HOA than grooming.
Buyers routinely pay to inspect a home before purchasing it- even those that look good. They check the roof, plumbing, electrical system, HVAC, appliances, and more for defects. But do buyers similarly inspect the HOA?
Most do not, even assuming it was possible: which arguably it is not. Instead, the buyer receives hundreds of pages of governing documents, budgets, reserve studies, rules, and a generic disclosure late in the transaction. Even when the documents are technically available, understanding what they mean is not easy. The financial condition of the association, the quality of board governance, the degree of developer control, the adequacy of reserves, the association’s regulatory investigations and litigation history, the strength of owner participation, owner satisfaction, and other real risks embedded in the governing documents are difficult to impossible for buyers to evaluate before closing.
Homebuyers often assume, at great risk, that someone is paying attention, looking behind the curtain. But the oversight structure that exists in public securities markets does not exist for HOAs. Public companies are watched by analysts, auditors, investors, regulators, and mandatory disclosure rules. HOA buyers have no comparable system warning them about weak reserves, poor governance, developer control, risky amenities, or long-term obligations.
Nevada requires a seller to disclose known defects in the physical property that materially affect value or use. That disclosure system does not require the same kind of practical, plain-language risk disclosure for the HOA as a governing institution. Buyers receive paperwork; they do not receive nor access a practical warning system.
Amenities Can Carry Long-Term Financial Risk
Should developers be allowed to use amenities to help sell homes, then leave owners decades later to absorb the financial, operational, and governance consequences without clear limits and understandable disclosure? If not, what are the limits and how would they to be enforced?
Amenities are backed by HOA assessment, lien, and collection powers. Buyers should know exactly what they are inheriting before they buy. When costs rise, reserve funding can be deferred, preferences can change, amenities lose popularity and money, contracts can be poorly negotiated, and boards can make imprudent decisions. The result, owners bear the burden through increased assessments, special assessments, loans, liens, or collection action.
In plain English: if the HOA makes expensive decisions or takes on obligations, owners pay. If they do not pay, the HOA can lien their home. That is very different from owning stock in a company.
The Contract and Corporate Models Do Not Fit HOAs
That is a central weakness in the HOA model. HOAs are treated as private contracts when courts enforce the recorded covenants, and as nonprofit corporations when boards defend their business decisions. But neither model fully fits the reality of common-interest communities.
An HOA is not merely a private contract. The buyer does not sit across the table from the developer, seller, or association and bargain over assessment powers, architectural restrictions, enforcement authority, reserve obligations, dispute procedures, amendment thresholds, or the scope of board discretion. The buyer must accept the governing documents as a condition of purchasing the home.
Nor does the corporate model adequately fit. Because many HOAs use the nonprofit corporate form, it is often assumed that corporate-law concepts provide enough accountability. But HOA owners are not ordinary corporate investors. They cannot simply sell stock, exercise negotiated buyout rights, rely on market scrutiny, or expect poor governance to discipline decision-makers through lost compensation, investor pressure, regulatory sanctions, or professional consequences.
In HOAs, those accountability mechanisms are weak, indirect, or often absent. Disclosure is limited, market scrutiny is weak, and enforcement too often depends on individual homeowners having the time, money, knowledge, and risk tolerance to challenge the board.
Voting matters. But it is not a substitute for clear limits on HOA authority, meaningful disclosures, independent oversight, practical remedies, and enforceable homeowner protections.
“Just Don’t Buy in an HOA” Is Not a Realistic Answer for Many Buyers
And in Southern Nevada, “just don’t buy in an HOA” is not a realistic answer. Much of the available housing is already inside an HOA, 80% of new homes were reportedly constructed in HOAs over the past few years, and that share continues to grow as local governments find the cost-shift advantageous. For many buyers, the practical choice is not HOA or no HOA.
Most Do Not Pay Attention Until Something Goes Wrong
The vast majority of HOA owners know very little about how their associations actually work. Participation is often poor. Meetings are lightly attended. Elections draw limited attention. This is not just an owner problem. For too many incumbent boards and the industry as a whole, this is beneficial- arguably intended. Thus, budgets, reserve studies, vendor contracts, fines, rules, insurance policies, and governing documents are rarely read closely until something goes wrong.
By then, it may be too late.
Owners often begin asking questions only after a fine is imposed, an architectural request is denied, or an expensive project suddenly appears. They look for a regulator and find little help. Only then do homeowners discover how much authority the association has and how hard it can be to challenge that authority.
We would not treat retirement funds this casually. Yet many homeowners do exactly that with what is likely their largest investment: their home.
HOAs Need Real Homeowner-Consumer Protections
That is why NVHOAReform believes strongly in limiting HOA power and creating real homeowner-consumer protections. Homeowners need more than the formal ability to read dense documents after the system has already been built around them. They need lawmakers and a legal structure that recognizes the imbalance between individual owners and associations, managers, developers, vendors, and industry professionals.
Nevada already regulates credit cards, mortgage lending, insurance, debt collection, and other areas where consumers face powerful institutions and complex documents. HOAs should not be exempt from that same basic principle simply because the authority is embedded in recorded covenants.
The same point is obvious in banking. Most people know very little about banking law, capital requirements, lending standards, internal controls, or regulatory examinations. Most have also never personally been harmed by a poorly managed bank. But that is not because every banker is trustworthy or every consumer is carefully monitoring bank governance. It is because banking is surrounded by a regulatory system designed to reduce risk before ordinary customers are harmed. We do not rely on “good bankers” alone.
HOA homeowners deserve the same basic principle. Nevada should not rely on good boards, good managers, good developers, or unusually sophisticated buyers. When a private governing system has power over homes, assessments, liens, enforcement, and community finances, the law should provide clear limits, meaningful disclosures, proactive oversight, and practical remedies.
Homeowners Must Start Demanding Safeguards
If HOAs are going to govern so much of Nevada housing — reportedly 52%, the highest share in the country — the question is whether Nevada’s HOA system properly limits that power and holds boards, managers, and developers, accountable when it is misused.
That requires more than telling homeowners to “read the documents” and file civil litigation if a violation of the contract occurs.
But homeowners — both inside and outside HOAs — are not meaningfully demanding real limits on HOA power and safeguards when that power is misused. Homeowners will not get stronger protections unless they start asking for them.
This web site is a good place to start learning more. Let us know when you disagree and where we could provide added information. Lastly, join us. Lend your voice to our mutual cause
