What is a Home Owners Association? HOAs Explained

Oct 24, 2019Buying Basics, First-Time Home Buyers

Most people have heard of Home Owners Associations (HOA), but fewer people know about them in the detail they should. These are homes in areas that typically have walled enclosures, swimming pools, tennis courts, and other amenities. All of which are only available to those in the association. They come with several pros and cons which will have to be considered if you’re looking at buying a home in one. Below we cover everything you need to know about HOAs. Along with why any decision to buy in one shouldn’t be taken lightly.

What is an HOA?

An HOA is an organization in a planned community that makes and enforces rules for its properties and guests. They’re typically maintained by a Board of directors. Each of which is elected by the homeowners to maintain predetermined rules, regulations, and guidelines. The aim is to ensure that the community looks its best and functions smoothly. How this looks in practice depends on each individual HOA as the rules they set depend on what the homeowners agree is important for the community. For example, if most of the residents are retirees living out their golden years then they might place importance on minimal noise levels past a certain time. If there’s a community pool, then someone has to maintain that. Rather than leaving it to one homeowner, the HOA will handle all maintenance and upkeep.

All these rules and regulations are typically covered in a document called the Declaration of Covenants, Conditions, and Restrictions (CC&Rs). Anyone looking to buy a home in an HOA will be given this document for review. These rules will include guidelines that affect each individual homeowner, such as the type of fences and landscape allowed, and even the paint color of a house. Also included will be a list of the penalties for violating any of the CC&Rs. These can come in the form of monetary fees, forced compliance, or even legal litigation.

What are HOA Dues?

Maintaining an organization like this will cost money. Every homeowner is obligated to pay HOA dues, which are fees that are paid either monthly or annually. The exact cost of this will vary but most single-family homes can expect to pay $200-$300 in monthly fees. Depending on the size of the home, and the level of amenities provided, this number can go well above or below the average. How this money will be spent will be clearly stated in the by-laws of the CC&Rs. A percentage will usually be allocated to pay for a property manager that will oversee all maintenance and other property-related issues. If there’s a communal pool or tennis court, each will have a percentage allocated to cover their monthly upkeep.

It’s also pretty common for HOAs to charge their members a little more in dues than what is required for monthly upkeep. This is to help raise a reserve fund to cover any emergency costs such as roof damage or new water heaters. If there’s not enough in the reserve fund to cover necessary expenses, then the HOA can issue a “special assessment.” That will add an extra fee to the regular monthly charges. Extra fees like this will be divided up between all the homeowners until the difference is made up. And if you’re wondering, yes, this means you’ll still have to cough up the dough even if you’re not affected by the issues at hand.

Advantages of HOAs

HOAs exist as a way to maintain and enhance a community. As you can expect, such a level of upkeep leads to appreciating property values. The strict rules and regulations mean anyone moving in can be sure of what they’re getting. If you’d like to live a certain way, then find an HOA that is in alignment with your needs and preferences. Additionally, membership of an HOA allows access to all its local amenities and the assurance that they’ll be fully maintained. There’s also the feeling of self-governance that they provide. After all, who better to run a community than the people who live there. 


  • Set and enforced community guidelines
  • Protected property values
  • Full access to local services, amenities, and facilities
  • Total self-governance

Disadvantages of HOAs

The pros of HOAs might look clear but so do the cons. A big one is the association fees which must be paid by every member without exception. Another issue is the rules and regulations which sometimes seem arbitrary and overly strict. Anyone buying in an HOA needs to understand that they won’t have full control over what they can do with their property. There will be restrictions on what you can do at certain times. For instance, a loud birthday party on a weekday night.

Also, self-governance might seem great in theory, but it can prove hard in practice. Most HOA board members work on a volunteer basis and they may not always be up to the job of managing real estate, handling complex financial issues or uniting opposing groups of people in a common interest. In a lot of ways, running an HOA is a lot like running a small business or nonprofit organization. Since so much of it relies on consensus among members, inner strife can wreak havoc. 


  • Set fees, dues, and assessments
  • Rules can be very restrictive
  • Can sometimes operate inefficiently


HOAs can be a great option for some people but they’re not for everyone. The rules and regulations, while providing stability and order, can be highly restrictive. Association fees have to be considered when determining your homeownership costs, as does the potential for extra assessment charges. Before making an offer on a home in an HOA, read carefully through the CC&Rs and talk with your Exclusive Buyer’s Agent. Make sure you understand fully what you’re getting yourself into before buying.


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