How to Get Out of Paying HOA Dues


HOA dues are fees associated with the ownership of condos and planned communities. You pay a set amount of money every month related to the upkeep and maintenance of the property as well as any amenities you might enjoy. As an HOA is not a for-profit entity and is made up of property owners, you have options for lowering your HOA fees. You might also be able to decline to pay some portions because of a dispute.

Certain amenities have become a popular way for developers to sell properties and for landlords to appeal to tenants. Rather than going to a separate gym, pool, or a friend’s house for a barbecue, you could have your own on the rooftop deck or lounge area of your condo building. These amenities are not free, though. If the property has a homeowners’ association, you or the landlord foots the bill for these amenities in the form of monthly HOA dues.

These fees can really add up for homeowners or take a big chunk out of a landlord’s profits. But if you feel the fees are too high or unwarranted, you may be able to take action to try to reduce them or opt out of paying them altogether. Keep reading to learn what you can do and what could happen if you don’t pay your required fees.

HOA 101

HOA stands for homeowners’ association, and in the world of condominiums, they are also referred to as condo associations. A homeowners’ association is a private entity that is formed by law in a building or planned community with multiple owner-occupiers or is transferred by a developer who is building the building/community. The HOA will also develop rules and regulations for the community, and the HOA’s rules are to be followed by all members.

HOAs are formed in “common interest” communities. The homeowners in these communities create a budget, which theoretically covers the costs needed to maintain the units in the building or the neighborhood. Each member then pays fees every month based on their share of the HOA. For instance, a person with a 3,000-square-foot penthouse will most likely pay more than a person with a 500-square-foot one-bedroom apartment in the same building.

An HOA typically comprises:

Civic amenities

Sometimes, services like water, electricity, and garbage collection will be handled by the HOA. It might be easier to negotiate collectively with utilities than it would be for association members to sort out each service themselves.

Building amenities

Pools, clubhouses, rooftop decks, gyms, tea rooms, and meditation areas are just some of the many amenities available to high-end condo and home buyers. These need to be maintained regularly, and thus the HOA will budget and pay for these.


If you live in a planned community with an impeccably landscaped clubhouse, then that landscaping is paid for by the HOA. Likewise, if you live in a building that has a nice outdoor area with trees, flowers, and other types of greenery, that will be paid for by the HOA.


In New York City, if you have a doorman letting people in and out of your building, their salary is usually paid for by the HOA. If you have an elaborate security system with fences and cameras, then the HOA pays to maintain them.

How to get out of paying HOA fees

If you have high HOA fees, then you have options. Your homeowners’ association will have a board of people making decisions and even a president that oversees the whole operation. Here are some ways you can lower or get out of paying your HOA fees if you have unpaid dues.

Join the board

The easiest way to have a front seat when HOA decisions are made is to join the board. You might even be able to work your way up to the HOA president. Regardless, joining the HOA board will give you a first-hand look into how the budget is developed and how decisions are made by the property owners. You can then start to drive change yourself.

Do an HOA budget analysis

Even if you don’t join the board or are one of the HOA members, you are allowed to see the HOA budget. This is the roadmap that explains where your money goes. You can go item by item to determine if some costs are overpriced or not needed. You can then start to drive the costs down and, in some cases, contest the costs to get out of paying them.

Pro Tip

If you own a property outside of the U.S., in places like Costa Rica, for example, you should make sure you know your HOA budget and how that relates to the actual market pricing. Sometimes the condo or property management company can overcharge and get that money kicked back from the contractor doing the “landscaping,” for instance. It’s best to find a local in the community and see if what you pay is truly close to market rates.

Examine the insurance policies

There could be various insurances wrapped into your HOA that you don’t even know about. Be sure to check the policies and terms; you might be drastically overpaying for insurance you don’t need.

Reduce the reserves

Every HOA has a reserve fund that is used for surprises like pipes bursting or storm damage. This reserve needs to be large enough to cover unexpected expenses but shouldn’t resemble Harvard’s endowment. If the reserves are way too big, consider lobbying to have them cut down.

Sue the HOA

You can sue the HOA for negligence if they fail to uphold their legal obligation and also to get out of paying certain fees. For example, if your pipes burst and weren’t fixed properly, you might have stopped paying your HOA fees out of protest. You can take the HOA to court to get out of paying the fees. You might even be able to collect damages in the form of a refund for the portion of your HOA fees that went to pipe maintenance.

What if you don’t pay your HOA?

If you fail to pay your HOA fees, your HOA has two options. They will either try to force you to pay without taking legal action, and if that doesn’t work, they will go ahead and take you to court. Here is what might happen if you don’t pay your HOA dues.

Your services could be cut

The HOA might cut your non-essential services such as TV or pool access. If that doesn’t work, they might start cutting your basic services like water and electricity. If they think they you owe money, they will do whatever it takes to collect it.

The HOA could file a lawsuit against you

If they are in the wrong, and you can win, then this might not be such a bad thing, as long as you can afford the legal expenses. If you are the one in the wrong, however, the HOA can get a court judgment for your unpaid debts as well as possible damages.

You could have a lien placed on your home

In theory, you could have a lien placed on your home if you fail to pay your HOA fees. This would usually happen after you are found guilty in a court case. But all the same, if you want to keep your home, pay your HOA dues.

Having trouble keeping up with your HOA fees? Maybe it’s time to refinance your mortgage and put some extra money in your pocket.

HOAs and commercial property

With commercial property, a landlord deals with businesses, and sometimes these businesses might try to get out of paying their HOA fees. Claudia Cobreiro, an attorney with Cobreiro Law, has seen this before. “Commercial tenants often threaten to stop paying or temporarily stop paying these fees with the pretext that they are somehow excessive or unreasonable,” she says. “Most times, however, the leases that underlie these relationships have rigorous and clear language about the associated fees and how they are calculated to avoid these surprises.”

Cobreiro says that tenants can sometimes achieve a reduction or abatement of the fee, but they should approach this strategy with caution.

“Many commercial leases allow landlords to act quickly and swiftly against them in court (not only at the corporate level but at the individual level as well) to enforce payment.”

Landlords, be aware of HOA fees and yield

As a landlord, you want to get as much of a return as possible on your asset. This is usually termed a rental yield or a cap rate. It’s basically the yearly rent divided by the asset price.

For example, if you buy a property for $100,000 and you rent it out for $10,000, then your yield will be 10% as $10,000/$100,000 = .1 or 10%. This is called a gross yield, however. Your net yield is the percentage of return after you pay all of your fees.

Say, for instance, you only pocket $5,000 a year on the $100,000 property after paying rental insurance, HOA fees, property tax, etc. Then your NET yield is 5% as $5000/$100,000 = .05 or 5%. Here is where you need to be careful about HOA fees, as they can significantly affect your yield.

This is important if you are considering purchasing a “luxury” condo with sky-high HOA fees. HOA fees can differ widely, according to Adriano Tori, founder of RexMont Real Estate, who has seen some absurd figures. “What’s really wild with HOA dues is that they can go as high as $2,500 for luxury condos and as low as $50 a month for single-family homes, in which case a board’s duties are limited to the common areas and supervision of the property’s upkeep,” he says.

“The amount of the HOA dues is linked to how well the board manages the funds on payables to contractors and their ability to get owners to participate in preserving the common areas.”

Tori says the most outrageous HOAs are those which constantly impose assessments for maintenance or upgrades that go $200-$600 above the HOA dues.

Example: Net yield on two properties with or without high HOAs

Let’s take two properties, for example. One is a two-bedroom apartment in a small four-unit development in Denver, CO. It only has security and landscaping, and the HOA is minimal. The other is a studio apartment in Manhattan in which the building has a pool, gym, and a rooftop deck where people sometimes DJ. Let’s take a look at the breakdown.


Rental income$28,000$40,000
Gross yield6.22%5.26%
Yearly rental management fee @10%$2,800$4,000
Property tax$2,600$7,600
Other fees$1,000$2,000
Total costs$8,000$21,600
Total net rent after costs$20,000$18,400
Net yield4.44%2.42%

Here you can see a comparison of the properties. The Denver property generates a 6.2% growth yield, and the NYC one generates a 5.2% gross yield. However, after taking into account the fees, the Denver property net yield drops to around 4.4%, and the NYC condo drops to 2.4%. That means the Denver property only drops by .8%, whereas the NYC property drops by nearly 3%. The largest reason for this is that the HOA fees for the NYC building are much higher. For a landlord buying an investment property, particularly one looking for cash flow, this is extremely important to note.

Benefits of HOAs

Homeowners’ associations (HOAs) have gotten a bad rap over the years for being overly strict and causing unnecessary expenses for homeowners. We have covered a lot of the negative aspects of HOAs above, but they are not all bad. Not by a long shot. HOAs can actually provide many benefits beyond just maintaining property.

One of the biggest advantages of living in an HOA community is the access to shared amenities. From swimming pools to fitness centers to community events, HOAs provide residents with a variety of shared resources that they might not otherwise have access to. For example, some HOAs might offer regular social events, such as holiday parties or barbecues, giving residents a chance to get to know their neighbors and build a sense of community.

Another benefit of HOAs is the protection of property values. HOAs typically enforce rules and regulations that ensure the community is well-maintained and attractive. This can help to preserve property values over time, as well as make the neighborhood a more pleasant place to live. For example, an HOA might have rules about the types of exterior changes that are allowed, such as prohibiting certain types of fencing or requiring approval for major landscaping changes. While some homeowners might find these rules restrictive, they can ultimately help to protect property values and ensure that the community remains desirable over time.


Will an HOA hurt my credit?

Not paying your HOA fees can hurt your credit if the association takes legal action against you. You need to either pay your HOA fees on time or sort out ways you can lower them (or perhaps eliminate some of them).

Why do HOAs exist?

HOAs exist so that everything a building or neighborhood shares is kept to a certain standard. These associations are vehicles for the property to be maintained by people with a “common interest.”

What happens if you don’t pay HOA fees?

If you don’t pay your HOA fees, you can have your services cut, you can be taken to court, or you could even have a lien filed against your home.

Key takeaways

  • HOA fees are levied by the homeowners’ associations of condos and planned communities. You pay HOA dues every month, which go to the upkeep and maintenance of the property as well as amenities you might enjoy.
  • There are several ways you can reduce HOA fees, such as becoming one of the HOA board members or analyzing the budget. You can even sue the HOA in some cases to get out of paying dues.
  • If you don’t pay your HOA dues, you run the risk of services to your home being cut. You could also have various legal actions filed against you, including lawsuits and liens.
View Article Sources
  1. Homeowners’ Associations –
  2. Are condo/co-op fees or homeowners’ association dues included in my monthly mortgage payment? – Consumer Financial Protection Bureau
  3. What Are HOA Fees? – SuperMoney
  4. What Does HOA Stand For and How Do HOAs Work? – SuperMoney
  5. Are HOA Fees Tax Deductible? – SuperMoney
  6. The Pros and Cons of Buying a Condo – SuperMoney
  7. What Is a Mortgage Lien? – SuperMoney
  8. How to Opt Out of an HOA Community – SuperMoney