Love them or hate them, homeowners' associations (HOAs) are here to stay in the U.S., and while there are plenty of retirees who are pro-HOA and love the way that these associations take care of things like plowing snow and making sure your neighbor doesn't let their lawn get overgrown, many people still balk at the cost of belonging to these groups.
Now, a new report from Realtor.com says a controversial law may open the door to higher HOA costs, pushing homeownership costs to unaffordable levels for seniors and retirees on fixed incomes.
While the Corporate Transparency Act (CTA) is still being litigated in court, the controversial legislation could have serious effects on homeowners living in HOAs if it is determined to apply to these organizations. According to The Wall Street Journal, HOA fees were already on the rise before the CTA announcement.
In 2025, the median condo fee was $420, up 29 percent from 2019, the publication wrote, and HOA fees for single-family owners rose by 26 percent to $63 per month. But, when it comes to just how much they could go up, the answer remains unclear
The Law is Designed to Protect Against Fraud, but It's Raising Costs
The CTA was enacted in 2021, the type of financial fraud that plagues certain types of businesses, though HOAs argue they were never the intended target of the law. The CTA requires millions of financial entities and businesses to keep detailed records about their officers, beneficial owners, and more, which is then overseen by the Treasury Department's Financial Crimes Enforcement Network.
The CTA was designed to curb the billions of dollars that the U.S. government says it loses each year to financial crimes. However, organizations like HOAs say that the cost of complying with the law is driving up costs, which are then passed on to homeowners, since many HOAs are non-profit entities. However, the legal system is still debating whether this ruling should apply to American HOAs, and a final decision is expected sometime in 2026.
The CTA would be especially hard for HOAs, which operate with volunteer boards. "It's not a typical filing requirement a corporation would have where they file their owners, and that's it," Dawn Bauman, the CEO of the Community Associations Institute, told Realtor.com. "Community associations have new board members every year at least, and often more often."
According to the Corporate Transparency Act and Homeowners Associations Fact Sheet, board members who violate the filing requirement could be subject to civil penalties of $500 per day (which will be adjusted for inflation, and currently stands at $591 per day), criminal penalties of up to two years in prison, and an additional fine of up to $10,000, if the courts decide to include HOAs.
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HOAs are Still Valuable to Retirees
With all that uncertainty looming, retirees may be wondering if they should still purchase a home in an HOA. For many, these organizations remain appealing because they offer benefits that aren't as readily accessible to those living alone.
Many HOAs include landscaping and snow removal in their annual fees, making it easier for retirees to keep up with home maintenance.HOAs continuously monitor and maintain property exteriors, allowing retirees to travel for extended periods without worrying about home security or maintenance violations, though they may need to ensure landscapers are aware they are away.Many offer community amenities, such as gathering spots, events, and activities that can help seniors stay active in retirement.If they are planning to leave a home to a loved one, they don't have to worry about the property's value decreasing, since strict community standards ensure neighbors keep up their homes.Related: Why Renting in Retirement Might Beat Owning a Home
If you're worried about the potential increase in HOA fees, and you're looking to move to a home with an HOA, you may want to consider doing a bit more research before putting in an offer, and ask questions like:
What is the HOA's plan to deal with the CTA legislation? Are the HOA bylaws available for prospective homeowners to review? What is the HOA's yearly fee increase limit?Those moving out of state may want to consider resources like PerfectHOA.com, which has a section that breaks down state guidelines on fee limits, including how much an HOA can increase its fees without a member vote. For example, in Arizona, fee increases are limited to 20 percent without a member vote, while those above 20 percent require homeowner approval.
Sources:
Realtor.comThe Wall Street JournalDawn Bauman, the CEO of the Community Associations InstituteCorporate Transparency Act and Homeowners Associations Fact SheetPerfectHOA.comDisclaimer: This article is for informational purposes only and does not constitute financial advice.
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