As a corporation, an H.O.A. is a defective product.
The purpose of a corporation is to shield an investor's personal assets from the corporation's liability.
For example, if you own stock in Corporation X, and Corporation X goes bankrupt, or is fined by the government, the most you can lose is the value of your stock.
The creditors of Corporation X cannot go after your home, your car, your bank account, etc.
But if you live in an H.O.A., which is legally a corporation, your house is forever collateral to whatever debts and liabilities the H.O.A. corporation creates. The assessments are a perpetual lien on your home, which can never be paid off. Even after you have paid off the mortgage, your house is still collateral to the H.O.A. corporation -- forever.
As H.O.A. attorney Tyler Berding wrote:
If an H.O.A. corporation goes bankrupt, or is fined by the government for some illegal act, the creditors of the H.O.A. have the right to collect the H.O.A.'s debts from the individual homeowners. This includes place liens on the homes within the H.O.A., and foreclosure if necessary to collect the debt owed by the H.O.A. corporation to the H.O.A.'s creditors.
A perpetual lien which can never be paid off can not enhance the value of a property. Far from protecting an individual's property, the existence of an H.O.A. corporation endangers it.
UPDATE: Adam Jason SInclair, a proponent of H.O.A.s, told reader Mike Reardon, who is suing his H.O.A., that
If a homeowner wins a judgement against an H.O.A., the cost will simply be passed back to the homeowners. The homeowners are responsible for the debts and liabilities incurred by the the H.O.A. corporation, "backed by the personal assets of all owners."
H.O.A. corporations, and their lawyers, have every incentive to sue homeowners for the most trivial of reasons. Whereas homeowners have every incentive to not sue their H.O.A. In both cases, the homeowners will be paying the H.O.A.'s lawyers before and afterwards.
Like the face-hugging parasite from the movie Alien, H.O.A.s have a "wonderful defense mechanism".