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The Role of Homeowners Associations (HOAs)

Last Updated: October 11, 2023

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Key Takeaways:

  • Homeowners Associations (HOAs) govern communities and are common in residential developments.
  • HOAs create and enforce various rules and gather fees from homeowners to upkeep the community’s shared areas.
  • There are many procs and cons to HOAs that are worth considering before buying a home that belongs to one.

According to the HOA-USA, over 370,000 homeowner associations (HOAs) exist in the United States. Interestingly, they are more common in certain areas and states. RubyHome says that HOAs are the most common in Florida, Colorado, and Vermont, where over 40% of homeowners belong to an HOA, and the least common in Mississippi.
Some people have strong views on HOAs. It only takes a quick Google search to read about the various opinions regarding buying a home in an HOA-governed community.
Maybe you are looking to buy a home that belongs to an HOA, or maybe you’re just learning about HOAs. Regardless, let's take a close look at their role in communities. This article will define HOAs, discuss their purpose, and list their pros and cons.

What are homeowners associations (HOAs), and how do they work?

Homeowners Associations (HOAs) are organizations that govern communities. They are common in residential developments. When someone buys a property that belongs to an HOA, they are required to join the HOA.
HOAs create and enforce various rules for homeowners. In addition, they gather fees from homeowners to fund the HOA's operating budget and upkeep the community’s shared areas. These fees are known as dues and are different from property taxes.
Much like other organizations, HOAs usually have a board of directors elected by the homeowners. The board governs the HOA, makes decisions on behalf of the community, and decides how the budget is spent.
HOAs operate under governing documents known as covenants, conditions, and restrictions (CC&Rs). These documents outline the rights and responsibilities of the HOA and homeowners.

What is the purpose of an HOA?

Although property owners can get frustrated with HOA rules and dues, they serve a significant purpose. Through imposing rules and collecting dues, HOAs aim to:
  • Take care of community common areas and assets
  • Protect, preserve, and increase property values
  • Manage community resources
  • Encourage a sense of community
  • Upkeep a certain standard of living
  • Promote a clean and safe environment
  • Set a shared community vision

How are homeowners associations formed?

HOAs are initially formed by establishing an appropriate business structure, such as a Limited Liability Company (LLC) or nonprofit corporation. You form an LLC by using LLC Articles of Organization and a nonprofit corporation by using Articles of Incorporation.
Next, an HOA makes covenants, conditions, and restrictions (CC&Rs), which list rules for homeowners and outline an HOA’s operations. Also, an HOA should outline a process for changing the CC&Rs in the future.
Also, an HOA may create other governing documents, such as Corporate Bylaws, which outline meeting requirements, voting guidelines, and election rules for board members.

What are HOA fees, and how much are they?

Homeowner associations require money to function. Therefore, they collect monthly or annual fees from community members. These HOA fees are known as dues.
According to BuyProperly, HOA dues can be between $100 and $1,000 monthly, with the average falling between $200 and $300.
A property’s dues depend on several factors, such as:
  • Property type and size
  • Community amenities
  • Number of properties in the HOA
  • Community and property location
  • Operating expenses
Often, larger residences pay more in dues than smaller ones. Generally, boards assume that larger residences use more services and funds than their neighbors in smaller homes.

What do HOA fees cover?

HOA communities have different features, amenities, and needs. Therefore, the things your HOA fees cover depend on your unique community. Generally, a homeowner’s fees (dues) may go towards:
  • Maintenance , such as landscaping
  • Repairs , such as fixing the siding of a condo
  • HOA insurance
  • Municipal services , such as trash removal
  • Security services , such as cameras or a security guard
  • Amenities , such as a pool or fitness center
  • Reserve funds , which can go towards renovations or unexpected costs
Besides fees, an HOA sometimes has to impose special assessments on homeowners when it doesn’t have enough reserve funds to pay for renovations or other unexpected costs.
To find out what your HOA dues cover, check your HOA’s governing documents.

HOA rules and regulations

Here is a list of common rules and regulations imposed by homeowners associations (HOAs):
  1. Architectural and aesthetic standards : HOAs may restrict the appearance of homes and properties, such as specifying colors for paint or roofing materials, and limiting the type of exterior alterations that can be made to a property.
  2. Landscaping and maintenance standards : HOAs may require homeowners to keep their lawns mowed, trees trimmed, and yards free of clutter. They may also regulate the type of plants and flowers that residents can plant.
  3. Parking and street use : HOAs may have rules about where residents can park their vehicles and how many vehicles are allowed per household. They may also regulate the use of streets, such as prohibiting parking on certain days.
  4. Noise control : HOAs may have rules about noise levels, such as limiting the hours that residents can play loud music.
  5. Pet restrictions : HOAs may have rules about the number and type of pets that residents can keep on a property and may also regulate the areas where pets are allowed to go.
  6. Renting restrictions : HOAs may have restrictions on property rentals. For example, they may require a minimum length of Lease Agreements and limit the number of rentals allowed in the community.
  7. Pool and recreation area use : HOAs may have rules about using community pools and recreation areas, such as specifying hours of operation and limiting the number of guests allowed.
  8. Trash and waste disposal : HOAs may have rules about the disposal of trash and waste, such as specifying days for pick-up and prohibiting the storage of large items in front yards.
  9. Fire safety : HOAs may have fire safety regulations, such as specifying the type of smoke detectors required in homes, and regulating the storage of flammable materials.
  10. Financial management : HOAs may have rules about the management of association finances, such as specifying the types of investments that can be made and the procedures for approving budgets.
Note that these rules vary by state and local laws and the specific HOA in question, and they may be subject to change over time.

Pros of homeowners associations

Homeowners associations can offer several benefits to residents. Here are some of the pros of HOAs:
  1. Community aesthetics : HOAs can ensure that residents keep their homes and properties to a certain standard, which can improve the community's overall appearance.
  2. Property values : Maintaining a certain community standard can help maintain and increase property values.
  3. Maintenance and upkeep : HOAs can provide common services and maintenance, such as mowing lawns, maintaining parks, and fixing roads, saving homeowners time and money.
  4. Amenities : Many HOAs provide access to amenities like swimming pools, recreation areas, and clubhouses, which can improve the quality of life for residents.
  5. Safety : HOAs can enforce safety regulations (e.g., fire safety) that protect residents and their properties.
  6. Consistency : HOAs can ensure that everyone follows the same rules and regulations, creating a sense of community and fairness.
  7. Mediation : HOAs can provide a neutral third party to mediate disputes between residents, saving time and money compared to going to court.

Cons of homeowners associations

Homeowners associations (HOAs) can have several drawbacks. Therefore, prospective homeowners need to weigh the pros and cons of HOAs before buying into a community governed by one. Here are some of the cons of HOAs:
  1. Restrictions on personal freedom : HOAs can impose strict rules and regulations on residents, limiting their personal freedom and individuality.
  2. Cost : HOAs can be expensive, with homeowners required to pay regular assessments, special assessments, and fees for common amenities.
  3. Bureaucracy : HOAs can be bureaucratic and slow-moving, making it difficult for residents to get things done quickly.
  4. Lack of transparency : HOAs can lack transparency, with decisions made by a small group of board members without input from residents.
  5. Conflicts with residents : HOAs can be a source of conflict between residents, especially when rules are enforced heavily or arbitrarily.
  6. Lack of accountability : HOAs may lack accountability, with little oversight of the actions of the board or management.
  7. Inflexibility : HOAs can be inflexible, with rules that do not consider residents' changing needs and circumstances.

Can you refuse to join a homeowners association?

When you purchase a property in an area or building that a homeowner association governs, you are required to join the HOA, pay dues, and follow the HOA rules.
Therefore, you can’t refuse to join a homeowner association when buying into an HOA community. Avoiding homeowner associations means not buying properties that belong to them.

Can HOA representatives trespass on my property?

HOA board members and other representatives do not have the right to enter a homeowner’s property without their consent. Homeowners have a reasonable expectation of privacy and the right to enjoyment without interference from their HOA.
Much like a landlord must provide a Notice to Enter form, an HOA should give sufficient notice to the homeowner before entering the property. However, members of an HOA may be allowed to enter another person's property only in emergencies or to prevent harm.
An HOA's right to enter property should be spelled out in its governing documents, such as the covenants, conditions, and restrictions (CC&Rs). If you’re concerned about your HOA trespassing on your property, refer to the governing documents to determine the HOA’s exact authority. Of course, state law also applies and can override these documents if there is a conflict.