Looking at a new home and wondering what a homeowners association is?
What is a Homeowners Association (HOA)?
In short, Homeowners associations (HOAs) are private associations that property developers create in planned development communities.
As homes are sold, the developer transfers control of the association to owners.
Typically, HOAs consist of detached homes. Thus HOAs differ slightly from Condo Associations, where the properties are commonly a number of structures with many units.
Homeowner associations, or HOA neighborhoods, enable owners to manage their planned unit development (whether a condo, townhouse or subdivision). If you are looking at an HOA property it means that you will have common property, such as roads.
You may also have amenities like a clubhouse, pool or gym. These are great if you use them, but since all HOA properties contribute to the costs you may resent paying if you don’t.
Responsibilities of an HOA
Either way, the association will be responsible for roads and infrastructure within the community, as well as maintaining common areas and enforcing rules. This is why membership is often mandatory in an HOA community.
HOA rules are established by homeowners to maintain community standards for appearance and property use. These rules, created and amended by owners, can cover a wide range of issues as long as they don’t violate constitutional rights or laws.
Common concerns addressed by HOAs include pet restrictions (often with exceptions for service animals), smoking bans (considering nuisance and quiet enjoyment), and rental limitations, especially on short-term rentals.
HOAs can also place liens on properties for unpaid fees or fines, potentially leading to foreclosure. While satellite dishes can be restricted, federal law allows for dishes under 1 meter with reasonable reception.
HOAs can borrow money, with owners repaying the debt through fees. Emotional support animal claims are under scrutiny due to abuse, with some states cracking down on fraud. Pest control, like termites, is typically the association’s responsibility in common areas, with owners responsible within their units. HOAs must also ensure accessibility and avoid discrimination against people with disabilities, making accommodations as needed.
See our post about Why HOAs Exist.
HOA Fees
HOAs have fees, but also offer amenities and services. There are also rules, but a clearer sense of responsibility that may lead to increased property values.
HOA fees are regular payments from homeowners to their association, funding the maintenance, improvement, and amenities of shared community spaces. The amount varies based on factors like amenities, property size, reserve funds, professional management, and population density.
These fees typically cover landscaping, snow removal, maintenance of common areas, utility costs, insurance for communal spaces, community events, and reserves for future repairs. Common misconceptions include the belief that fees are fixed, optional, cover all home expenses, or are the same for everyone.
Effective management involves reviewing financial statements, preparing for potential increases, attending HOA meetings, and exploring cost-cutting options. Understanding HOA fees enables homeowners to manage their finances, avoid surprises, and contribute to the efficient upkeep of their community.
Pros & Cons
In another post, we outline the reasons why living in an HOA community may be good or bad for you.
Living in an HOA offers advantages like maintaining property values through enforced standards for curb appeal and community upkeep. HOA fees fund landscaping, maintenance, and amenities, ensuring a clean and desirable neighborhood. Common property maintenance is handled for you, providing a hassle-free lifestyle.
However, HOA living also has drawbacks. Rules can feel restrictive, requiring approval for even minor changes and adherence to standards like lawn length. HOA fees can be burdensome, especially if you don’t use the amenities they cover.
Ultimately, if you dislike rules or paying for unused amenities, HOA living may not be for you. The worth of an HOA depends on individual preferences and priorities.
Recommended Reading: Condo fees vs HOA fees: What’s the difference?
Questions to Consider Before Joining an HOA
Before purchasing a home in an HOA community, there are several key questions to consider.
- What are the exact HOA fees, and what do they cover?
- Review the HOA’s budget and financial statements to understand how your money will be used.
- What are the HOA’s rules and regulations, and are you comfortable living by them?
- Do the rules align with your lifestyle and preferences, or are they too restrictive?
- What amenities does the HOA offer, and are they amenities that you would use?
- Also, investigate the HOA’s history of assessments and fee increases.
- Are there any planned special assessments or potential for future fee hikes?
Understanding these aspects will help you make an informed decision about whether HOA living is the right choice for you.
Other HOA Resources to Get You Started
- Understanding HOA fees in Canada
- EPA – HOA Resources
- What are the HOA Documents You Need for Closing?
- How Do I Find CC&R’s For My Property?
- Study: Homeowners Associations Are Booming
Want to learn more about an HOA?
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