Why John Oliver Thinks Buying a Home in an HOA Is a Huge Mistake

A big reason so many people are motivated to stop renting and buy a home is that they're tired of having to follow a landlord's rules. Sure, the idea of getting to build equity in a home may be appealing, too. But it's hard to argue the benefit of getting to make your own decisions when it comes to the place you live.

But if your primary goal of becoming a homeowner is to make your own rules, then you may want to avoid a home that's part of a homeowners association, or HOA. HOAs are entities set up to govern groups of homes. They're common in condo and townhouse communities. But they can also be extremely restrictive, not to mention impose hefty fees. Comedian John Oliver recently discussed HOAs on his show Last Week Tonight, and he thinks buying a home in one has the potential to be a huge mistake.

A decision you might sorely regret

Oliver says that 29% of the U.S. population lives in an HOA. That's reasonably consistent with recent data from Today's Homeowner, which found that about one in five U.S. homes is part of an HOA. But while HOAs may be common, that doesn't make them wonderful.

The problem with HOAs is that they have the authority to impose different rules. And those rules might range from annoying to downright ridiculous. It's not uncommon for an HOA to tell you how tall your grass can be, what kind of shutters you can put on your windows, and what holiday decorations are or are not acceptable. And when you've spent a ton of money to buy a home, those are decisions you'd probably rather make yourself.

In fact, Oliver called out some particularly specific HOA rules he found notable. One that really stands out is, "All garage doors must be painted Benjamin Moore Mayonnaise OC-85." This doesn't automatically mean that if you buy a home in an HOA, you'll be given a single paint choice option for your garage door. But it's a possibility to brace for.

Your costs could be significant

Today's Homeowner says that in most states, the average monthly HOA fee ranges from $300 to $400. But your costs might be higher, depending on the number of amenities your HOA offers.

Furthermore, it's not just HOA fees you'll be responsible for paying. You might also get hit with fines for failing to follow the rules. And as Oliver says, "HOAs can be pretty unforgiving about handing (fines) out."

Oliver also warns that "some HOAs can be surprisingly aggressive about actively seeking out rule violators," pointing to a situation where an HOA used Google Maps to spot an unauthorized shed in a homeowner's backyard that could not otherwise be seen from the street.

Think twice before buying a home in an HOA

All told, buying a home in an HOA might end up being one giant source of aggravation. And so you may want to find a home that isn't part of one. Unfortunately, though, these days, that's easier said than done. Of all of the single-family homes sold in 2021, a whopping 82% were part of an HOA, says Oliver.

Still, if the idea of having to answer to an HOA doesn't sit well with you, then you may want to specifically look for a home that isn't subject to one, even if it means delaying homeownership until you find a property that meets that requirement. Paying a mortgage loan and covering the various additional costs that come with homeownership is hard enough. You don't need the added stress of an HOA to potentially make you regret your decision to buy a home in the first place.