A Beginner’s Guide to Understanding Homeowners Associations
Thanks to the growing desire to live in a well-maintained, organized community with shared amenities, Homeowners Associations (HOAs) have become increasingly common. Recent statistics show that over 30% of US citizens—equivalent to 75.5 million residents—live in communities governed by an HOA.
But what is an HOA, exactly, and what benefit do they provide to homeowners?
This article covers everything you need to know about HOAs, including how it works, expected fees, pros and cons, and more.
What Are Homeowners Associations?
Homeowners Associations (HOAs) are private, nonprofit, legally incorporated organizations that manage and maintain a building, neighborhood, or housing community.
HOAs carry out tasks like property management, noise restrictions, architectural guidelines, and pet policies. They also enforce community rules and guidelines known as Covenants, Conditions, and Restrictions (CC&R), which may include regulations on property appearance, landscaping requirements, and parking restrictions, among others.
In most cases, a person looking to purchase a home managed by an HOA is required to become a member, and must therefore obey the rules enforced by the organization. Some associations are strict about what members can do with their properties.
For example, some restrict modifications to exterior design (e.g., paint colors) and whether or not a pet is allowed on the property. Others are more lenient. Members who don’t follow the set rules may result in fines and, in severe cases, eviction.
What Is the Purpose of an HOA?
The main purpose of an HOA is to manage and maintain common areas and amenities within a residential community.
Among these services include snow removal, trash collection, landscaping and lawn care for common areas, and pest control.
Some organizations also include insurance coverage for shared spaces or exterior building maintenance. The cost of these services is funded by the community, and collected monthly or quarterly.
How Does an HOA Work?
The HOA is run by a board of directors, which is usually made up of elected homeowner volunteers. They’re responsible for creating budgets, hiring vendors, scheduling regular meetings, and enforcing the community’s rules and regulations that cater to the common interest of the neighborhood.
These rules are outlined in the CC&Rs, the governing document for the association, along with bylaws that outline how the association is run.
Benefits of Living in an HOA
Well-maintained Common Areas and Amenities
HOAs do an excellent job of maintaining the common areas and amenities of their communities. They keep shared spaces like swimming pools, clubhouses, parks, and sideways clean, safe, and in good condition, allowing residents to enjoy well-maintained facilities without having to tend to upkeep themselves.
Well-maintained amenities make the neighborhood look good, which in turn makes the community feel good.
Increases Property Values
Recent surveys show that 89% of homeowners living under an HOA acknowledge that the association’s efforts to enforce property standards have positively impacted the value of their properties.
The organization puts high regard on the community’s aesthetic, so they create rules that ensure homes and common areas are kept in pristine condition. This includes homes that aren’t occupied or have been abandoned, preventing them from becoming eyesores or targets for vandalism.
Some organizations implement annual or bi-annual exterior modifications and repairs, like paint jobs and roof inspections. Others perform routine landscaping maintenance, driveway upkeep, and fence repairs to ensure a uniform and well-kept appearance throughout the community.
All this contributes to the overall attractiveness of the neighborhood, thereby increasing property values.
Many homeowners are willing to pay a premium for a well-contained house and community, which they can find in a neighborhood managed by an HOA.
Neighborhood Safety
While HOA communities can’t completely prevent burglaries, they implement measures that make it significantly more difficult for criminals to target homes. Many have gated entries, rules for houseguests and gatherings in shared areas, and restricted access to amenities.
Oftentimes, people who live in HOAs need an ID or proof of residency to access certain amenities or gated areas. Some even hire security and neighborhood patrols to keep the area safe 24/7.
Enforcement of Rules and Regulations
Another great advantage of living in an HOA-managed community is the rules and regulations that come with it. These rules often cover issues like noise restrictions, landscaping requirements, parking regulations, and even the types of pets allowed.
These regulations prevent disruptive behavior, such as loud parties or cluttered yards, which can negatively affect the neighborhood. They ensure all residents follow a similar standard, creating a sense of security and predictability. Those who break a rule can face fines, and repeated offenders may get evicted.
HOAs also offer a civil way to settle neighborly disputes. With rules and regulations in place, it’s easier to determine accountability and responsibility in conflicts. The HOA acts as a neutral party to mediate and resolve issues, preventing arguments from escalating and creating a peaceful living environment for all parties involved.
Convenient Amenities
HOAs offer various amenities for residents, which can include gyms, clubhouses, pools, playgrounds, and picnic areas.
These areas are private and well-maintained, and community members freely use them without worrying about extra charges or outsiders.
Those who enjoy swimming have access to a pool just down the street, and gym goers don’t have to drive far or pay for a separate gym membership.
Parents can also feel more at ease knowing that their children have safe, designated spaces to play just several steps away from their home.
Disadvantages of HOAs
Despite the many benefits of communities run by HOAs, some homeowners actively avoid living in these communities due to certain drawbacks. Some of these include:
Additional Costs
HOAs are non-profit organizations that receive all their funds directly from the community. Members pay these fees monthly or annually, and can cost hundreds of dollars if not more.
With inflation on the rise, the expense associated with HOA may put a great strain on a homeowner’s limited budget.
And while HOAs can do a lot of good—like taking the stress off of yard maintenance and regular home repairs—some homeowners like to manage the property themselves and hire external help as they see fit.
The price of maintaining amenities like pools, gyms, or security services would likely be more expensive if you were to manage them individually. In many cases, the convenience of having these services bundled together in one fee can be a cost-effective solution for homeowners, especially when considering the long-term savings and ease of management.
Strict or Undesirable HOA Rules
The many rules and regulations enforced by the HOA can be seen as a negative for some homeowners.
Many HOAs have strict regulations on home customization, such as changing the paint color of the home’s exterior, adding structures like sheds and fences, and installing outdoor decorations.
Some organizations prevent homeowners from building pools, playgrounds, bungalows, outdoor kitchens, and other accessory structures to maintain uniformity in the community. This can include the installation of solar panels because they alter the exterior appearance of your home.
HOAs likewise regulate the types of landscaping that can be done, such as tree planting or the use of certain types of grass or flowers.
Homeowners who don’t follow the CC&R may receive a cease-and-desist letter from the local firm, as well as fines.
Other restrictions and limitations include:
- Removal of trees without a permit, even if they’re grown within the property
- Planting certain species of plants
- Number and type of motor vehicles (boats, RVs, trucks, etc.) allowed on the property
- Where residents and guests can park
- Renting out your home, including short-term rental restrictions
- Disposing of large items, such as furniture or unbroken-down boxes, in community dumpsters
- When holiday decorations can be put up and must be taken down
Of course, not all HOA regulations are set in stone. Homeowners can request an exception to certain rules if they have a legitimate reason for wanting to make a change.
For example, if a homeowner wants to install a fence that goes against community guidelines to prevent pets from jumping out of the property, they can submit a request to the HOA board.
Some HOAs are more lenient than others and may put forth an exception so long a valid reason is provided.
Pet Limitations
Some HOAs have rules on what types of pets are allowed in the neighborhood.
Typically, dogs—particularly large or certain breeds are prohibited in HOA neighborhoods.
Other communities ban the ownership of exotic or “unconventional” pets, like snakes, lizards, spiders, and large birds like parrots, even if the homeowner is a licensed professional.
Some HOAs also limit the number of pets a resident can have. This can be especially off-putting for a multi-pet household, as it can force them to give up some of their pets just to follow HOA guidelines.
Mismanagement of Privileges and Fees
Another disadvantage of HOA communities is the possibility of mismanagement of privileges and fees. For example, residents may find that certain amenities, like pools or gyms, are closed for extended periods without notice, or that they’re poorly maintained.
Homeowner Association FAQs
What Are HOA Fees?
An HOA Fee refers to the amount of money HOA members must pay to the HOA on a monthly or quarterly basis. These fees assist in maintaining and improving the neighborhood and are paid on top of your mortgage, homeowners insurance payments, and property tax. Think of it as a service fee.
HOA fees vary widely depending on the area and the services provided. The average monthly HOA fee is $170, but some associations charge as high as $400 to $500 a month. HOA fees are subject to inflation, so what you’ll be paying today might not be the same in a few years.
Larger residences often pay more than smaller ones because of the effort required to maintain the property.
Alongside the set HOA fee, some associations request a special assessment fee on top of the regular monthly/quarterly fee.
Special assessment fees are issued to the entire community as a way to raise the necessary funds for emergency repairs, unexpected maintenance projects, or improvements to shared facilities. These fees can either be a one-time annual charge or spread out over several months.
What Do These Fees Cover?
HOA fees cover a variety of services that benefit the entire community.
Among these include the maintenance of common areas, such as lawn care, landscaping, and upkeep of shared spaces like sidewalks, parks, and entrance gates.
They also fund the operation and maintenance of community amenities, including swimming pools, fitness centers, clubhouses, sports courts, and playgrounds.
In some communities, the fees cover security services like neighborhood patrol. Legal and administrative costs are also part of the fees, which help with the operation and enforcement of these rules.
Are HOAs Worth It?
For many people, HOAs are worth it.
The fees that go into HOAs are often the same fees homeowners would typically pay for regular repairs and maintenance, with the added benefit of having these services managed by the HOA. Homeowners won’t have to worry about hiring and paying for these services themselves because the HOA will do everything on their behalf.
HOAs provide access to amenities like gyms, pools, and clubhouses, which can be expensive when paid individually. People who regularly use gyms and swimming pools will find this especially enticing as it allows them to use these facilities without paying for a separate membership.
Ultimately, whether or not an HOA is worth it depends on your living situation and personal lifestyle.
If you value convenience, shared amenities, and a well-maintained neighborhood, an HOA can be a great fit.
What Are the Different Types of HOAs?
HOA is an umbrella term for several different associations. Each HOA type has a unique element that makes them different from one another. Here are some of the most common ones:
Condominium Associations
Also known as Condo Associations, this type of HOA manages communities made up of condominium units. They’re responsible for maintaining shared spaces like hallways, elevators, lobbies, and the building’s exterior. the residents own the interior of their units but share ownership of these common areas.
Housing Cooperative Associations (Co-Op)
In a Co-Op, residents don’t own individual units. Instead, they own shares in the cooperative corporation that owns the entire building or complex.
Due to the collaborative nature of co-ops, they typically cost about 10% less than condos of similar size. However, the selection process is quite extensive because the board looks for individuals who align with the building’s values and who will not disrupt the social dynamic or cause conflicts.
The HOAs of co-ops are similar to those of condo associations. They manage the entire building or complex, including maintenance, repairs, and other services.
Civic Associations
Civic Associations are volunteer-based organizations looking to improve neighborhoods under their jurisdiction.
These organizations don’t have legal authority to enforce rules and can’t mandate fees. Instead, they rely solely on charity or donations. And since they don’t own common property, they can’t make modifications to common areas like HOAs.
However, Civic Associations relay neighborhood concerns to the local government as a whole, making them more effective than individual homeowners requesting change.
What’s the Difference Between a Property Owners Association and a Homeowners Association?
Property Owners Associations (POAs) and Homeowners Associations (HOAs) are often used interchangeably, but they’re two completely different governing bodies.
For one, POAs manage common areas and amenities but have less control over individual properties. This means that residents under a POA don’t have to follow certain architectural guidelines or landscaping rules when modifying their properties.
POAs are generally more focused on maintaining the overall neighborhood or development rather than individual properties. They don’t concern themselves about the uniformity of your house.
As long as the property is safe and well-maintained, they let you do whatever you want to your property. And since they only manage the common areas and shared amenities, POAs typically have lower fees than HOAs.
Final Thoughts
Homeowners Associations are non-profit organizations that govern a housing community. They make and enforce guidelines and regulations that maintain the overall appearance, safety, and functionality of the community.
They also offer services including trash removal, street maintenance, and the upkeep of shared amenities like pools, parks, and clubhouses that maintain and improve the neighborhood’s quality of life.
