What is a Homeowners Association (HOA)?

A Homeowners Association, typically called an HOA, is a volunteer organization comprised of residents that governs a community.

A Longer Definition: Homeowners Association

A homeowners association (HOA) is a legal entity that manages a residential community. HOAs are most common in condominiums, townhome complexes, and planned communities.

Homeowners associations protect neighborhood home values by investing in the community, providing amenities to its residents, and maintaining curb appeal standards. An HOA may also pay for shared services including building and lawn care, fitness room and pool amenities, and elevator maintenance.

In condominiums, the homeowners association pays for the building’s master condo policy, which is necessary for every warrantable condo.

Residents of HOA-governed communities must join their local association and follow its rules, known formally as Covenants, Conditions, and Restrictions (CC&Rs).

Rules are proposed and voted on by community residents and may include any of the following:

• Requirements for lawn and property upkeep
• Restrictions on external buildings, including sheds and accessory dwelling units
• Restrictions on fencing types and external paint colors
• Restrictions on political signage and lawn ornaments
• Restrictions on pet size and type

HOA membership requires monthly or annual fees to be paid directly to the association, not to the mortgage lender. While these dues are not part of the monthly PITI payment to the mortgage company, they are factored into a home buyer’s debt-to-income ratio for loan qualification purposes.

Association dues vary by community.

Check your eligibility and begin your application now.

Homeowners Association: A Real World Example

Imagine a first-time home buyer purchasing a property in a condo building. A homeowners association manages the building and, after settlement, gives the buyer a detailed handbook of community rules, known as by-laws.

Condo by-laws include notice of monthly dues, penalties for community violations, and information on attending regular HOA meetings. They also include regulations for short-term rentals, guidelines for balcony decorations, and restrictions on pets and pet sizes.

After moving in, the home buyer decides to become a pet parent, which the by-laws state requires HOA approval. The buyer attends an upcoming association meeting and asks the Board of Directors to allow a new dog in the building. The board asks about the dog’s breed and its expected full-grown size, to which the home buyer replies. The board grants the home buyer’s request.

Common Questions About Homeowners Associations

Why do people live in HOA communities?

Living in an HOA community typically gives home buyers access to well-maintained amenities, a uniform and aesthetically pleasing neighborhood, and a structured process for resolving disputes, which some people value.

Do HOA dues increase?

Yes, HOA dues can increase. However, dues increases are typically voted upon by the elected members of the HOA board and used to pay for maintenance costs, building reserves, and improvements in the community.

What happens if a homeowner violates the HOA rules?

Homeowners who violate HOA rules can be warned, fined, or face legal action, depending on the severity, the frequency of the violation, and the community by-laws.

Are HOA rules legally binding?

Yes, HOA rules are legally binding. When a home buyer purchases a home in an HOA-governed community, they agree to abide by its Covenants, Conditions, and Restrictions, which are enforceable under the law.

What’s the difference between a property owners association and a homeowners association?

A Homeowners Association (HOA) manages residential communities, such as single-family homes, townhomes, or condominiums. A Property Owners Association (POA) typically has a broader scope, including residential and commercial properties in a mixed-use community.