10 Things to Know About Homeowners Associations (HOAs)

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In many neighborhoods, homeowners Associations, or HOAs, are an important part of community living. These are organizations that exist to keep the aesthetic appeal and harmony of a shared residential space and everyone must play by the same rules. While they are frequently regarded as helpful guardians of neighborhood norms, they can start a few hot debates among residents.

Whether you’re already in an HOA governed neighborhood or considering a purchase of a property that is, having an understanding of how they operate can be a game changer. To help you decide where you stand, we’ll peel back the curtain on 10 key things about HOAs.

What Exactly Is an HOA?

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Homeowners association is an organization which manages a residential community. It’s like a group of neighbors coming together to keep common spaces and uphold common standards. HOAs are responsible for landscaping communal parks, and also for enforcing property upkeep rules that make sure the neighborhood looks its best. That might seem straightforward, but as they say the devil is in the details and those details are in the governing documents you’ll need to review before joining.

The Role of HOA Fees

If you live in an HOA, then you will pay regular fees, typically, monthly or annually. Part of the cost goes towards shared amenities, such as pools, club houses and parks, as well as general upkeep. A report from Bankrate puts the average monthly fee at about $170 across the U.S. But the fees can range from very little to quite a bit, depending on the size of the neighborhood and what services are being provided. You can think of it as chipping in for the community piggy bank, just to keep things running in good order.

Rules, Rules, and More Rules

Rules, known as Covenants, Conditions, and Restrictions (CC&Rs), are something HOAs are known for. All of these rules, from what color your house can be painted to where your car can be parked, are covered. Some may think they are too strict, but they are in place to keep property values up and to maintain a cohesive look to the neighborhood. Some people see them as too restrictive, so, as always, read the fine print before you buying a new home.

The HOA Conflict Resolution

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Residents and HOAs often don’t see eye to eye. Maybe a neighbor doesn’t mow their lawn because they don’t like it, or maybe someone feels unfairly targeted for a rule violation. Usually, these issues are resolved by a board that acts as a mediator in the HOAs. When dealing with a conflict, the best thing you can do is to communicate openly and professionally to the board. Who wants drama on their doorstep anyway?

The Perks of Shared Amenities

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If you live in an HOA area, you are usually surrounded by shared amenities like swimming pools, fitness centers, or tennis courts. However, these perks can really bring value to your daily life and add to your home value. In fact, according to a CDN study, homes in HOA communities are worth an average of 4% more than otherwise similar homes without one. Although those perks sound great, there’s a price tag to be paid, so be sure you’re alright with spending the money.

Your Voice Matters: The HOA Board

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Residents that are elected by the community makeup HOA boards. They make decisions, enforce rules, and administer finances. If you have strong opinions about where your neighborhood is headed, you might want to get on the board. It is a good way to leave your mark and help influence the community. Board meetings can be like reality TV, so be prepared for a few passionate debates.

Know Your Rights

Remember that, as a homeowner, you have rights, even if you live in an HOA governed neighborhood. What HOAs can and cannot do is often dictated by state laws. Some states, for instance, set limits on how big of a fine HOAs can charge residents for violations. If you feel that your HOA is exceeding its boundaries, don’t hesitate to check out local laws or consult a property law lawyer. In complex agreements, knowledge is power.

There Are Special Assessments That Can Happen

HOAs can also charge special assessments, over and above the regular fees, for unexpected expenses, such as major repair or upgrades. And these costs can come as a surprise to residents if the HOA doesn’t have enough reserves. Before purchasing in a community, it’s always a good idea to ask about the HOA’s financial health. You don’t want to be the one who pays a huge bill to fix the community pool.

Transparency Matters, Love it or Loathe it

A good HOA is transparent in what they do, the finances, and how they make decisions. To have an idea of how things are run ask to see the meeting minutes, financial statements, or budgets. Trust is built through transparency, and how the HOA functions is a strong indicator of just how transparent it is. There might be a red flag if the board is secretive.

It’s Not for Everyone

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The one size fits all for HOA living doesn’t exist. However, there are some people who love these communities – with organized structure and shared amenities – and thrive. Some just find the rules too stifling. If you’re the person who loves to paint your house purple or you get excited about putting up elaborate holiday decorations, an HOA can be a real buzzkill. At the end of the day it’s all about finding what works for you and your lifestyle and priorities.

Disclaimer: This list is solely the author’s opinion based on research and publicly available information.