Everything You Need to Know About Homeowners Associations

Advertising Disclosure: When you buy something by clicking links on our site, we may earn a small commission, but it never affects the products or services we recommend.

Happy homeowner holding keys
fizkes / Shutterstock.com

Editor's Note: This story originally appeared on Point2.

If you’re in the market for a new home, you might have come across the term “homeowners association” (HOA).

HOAs are increasingly common, and while they’re sometimes given a bad rap due to the rules that must be followed, there are some benefits to buying a home within an HOA.

An HOA is essentially a nonprofit organization made up of all the people who own a home in the same community. This can be in a condo or townhouse development. A board including a few members helps run the homeowners association.

Each HOA is different, but for the most part, it exists to manage the community, maintain shared spaces and amenities, and collect the required fees.

The main aim of an HOA is to increase property values for everyone in the community. This is mainly achieved by creating a clean and friendly environment and maintaining specific standards regarding maintenance and repairs.

Who Can Be an HOA Member?

Man drinking coffee
mimagephotography / Shutterstock.com

Everyone who owns a property in the same development automatically becomes a member of the HOA. They can vote on issues, raise concerns, join the board, and enjoy the various amenities.

There’s no chance to opt out, though — if you want to buy a house in an HOA, you have to join.

Do I Have to Pay an HOA Fee, and What Does It Cover?

happy woman with cash
NewSaetiew / Shutterstock.com

HOAs charge fees that all members are required to pay. On average, you can expect to pay between $200 and $300 per month, although costs can vary drastically depending on the services the HOA offers. For example, you can expect to pay higher fees for a community that boasts shared amenities such as parks, gyms, playgrounds, pools, and a community club.

The fees are generally collected monthly, quarterly, or annually, and you’ll need to factor the cost into your budget. If you’re taking out a mortgage, the lender will certainly consider the HOA dues.

Besides amenities, the fees should go toward bettering the community, whichever way the HOA deems necessary. This can include security, trash collection, and landscaping. You can check the by-laws and CC&Rs (Covenants, Conditions, and Restrictions) to see exactly how the money is spent.

What Happens If I Don’t Pay HOA Fees?

sneaky greedy business person
Mangostar / Shutterstock.com

You’ll be charged late fees and interest if you miss a payment. You may also be banned from communal amenities. In some areas, HOAs can foreclose on your home.

With the right to put a lien on the property, the HOA can effectively say that if you don’t pay what you owe, they’ll take your house, sell it and pay themselves what they’re owed.

However, this is extremely rare and even illegal in certain areas. When it does happen, it’s only possible if you haven’t paid your fees for many months or even a year or more.

What Are the Most Common HOA Rules?

El Nariz / Shutterstock.com

Each HOA is different and sets its own rules and restrictions. These can be found in the CC&Rs: Covenants, Conditions and Restrictions, also known as the master deed.

This legal document describes the responsibilities and rights of the HOA board members and homeowners. It also typically details the architectural standards the community is expected to abide by.

Other common rules include the following:

  • Fees: How much each member must pay, when and the consequences if they fail to do so
  • Noise restrictions: Designated quiet times are typically put into place to ensure everyone can get a good night’s sleep. There may also be limits as to how much noise can be made at any time, in terms of parties, power tools, etc.
  • Pet regulations: This common rule may dictate how many pets each member is allowed, what breeds are not allowed, cleanup regulations, leash laws, as well as acceptable noise levels
  • Curb appeal maintenance and aesthetics: By decreasing clutter and ensuring lawns and outdoor spaces are attractive, the aim is to make the neighborhood look more desirable and standardized. Many HOAs will regulate what color your exterior walls can be and limit holiday decorations, while more-strict associations may go so far as to regulate grass height and the type of mailbox you can use.

What Happens If I Break the HOA Rules?

Anxious home seller
Asier Romero / Shutterstock.com

Failure to comply with the rules will typically result in a punishment of some sort. In most cases, minor issues involve a quick chat with a board member.

However, you may also be fined and face a one-time penalty or an ongoing fine that renews every day you violate the rules.

In some cases, the HOA may arrange for repair work to be carried out on your home, then bill you for it. They can also ban you from amenities and, in severe cases, sue you.

What Can I Do If My HOA Is Ineffective?

Frustrated man on laptop dealing with scams
fizkes / Shutterstock.com

HOA board members must also honor their duties. If you join an HOA that isn’t fulfilling its role, you have the power to bring about change. Any homeowner can elect a new board member and remove the old ones. This will be decided by a vote of all homeowners, so it’s good to speak with your neighbors first and work together.

If there’s been an abuse of power, cases of harassment or discrimination, HOA members can file a lawsuit against the HOA. If there’s no hope for improvement, any HOA board can be dissolved. The process should be outlined in the CC&Rs. Of course, you’ll need to work with a lawyer since it’s a legal process, but it can certainly be done.

Since every HOA is different, it’s essential to read through the rules and check out the fees before buying—or even renting—a property in an HOA. You don’t want to pay for amenities you’ll never use or risk breaking rules you disagree with. You may also find that joining an HOA works for you, so don’t rule it out without weighing up the pros and cons.