What Is a Homeowners Association?


Susan Kelly

Feb 28, 2024

HOA is a private, resident-owned entity that oversees neighborhoods, mostly to create and enforce rules designed to keep the neighborhood's appearance constant. They also take care of common areas and even the properties surrounding individual residences. HOAs are typically governed by resident-led, volunteer boards, which could also comprise representatives from a management or development business. The board can enforce rules, referred to as covenants, restrictions, and conditions, resulting in sanctions and fines for residents if they aren't adhered to.

Associations for homeowners have grown more popular in recent years. More than one in four homeowners reside in an association for the community, as per the Foundation for Community Association Research. This non-profit organization offers research on HOA trends. The trend is expected to remain. According to the study of researchers Wyatt Clarke, nearly 60% of newly constructed single-family homes and the majority of homes located in new subdivisions are HOAs. Researchers discovered that HOAs could be beneficial to homes since houses that were part of the HOA were generally valued, 4% higher than similar homes that were not in an HOA.

How Does an HOA Work?

HOAs typically form after the construction of a community. The developer sets up the homeowners association and transfers it to residents who purchase houses within the community. These people are automatically participants in the HOA. The homeowners elect the board of directors that will manage the HOA. The board decides on the amenities and services of the community and collects monthly fees to cover these services, and determines and enforces rules for the community. The HOA stipulates these regulations in a contract known as the Declaration of Covenants, Conditions, and Restrictions (CC&R). Anyone buying an apartment within the community has to be a part of the community to adhere to these rules and be liable for monthly membership fees.

What Do HOA Fees Cover?

The majority of the HOA fees cover the expenses of shared amenities. However, a portion of your charges goes to reserves. It's essentially a savings account that can be used to pay for major costs like replacing the roof of your condominium building or resurfacing the parking area. It could also be necessary to pay an assessment. It's when the entire homeowners contribute a high one-time cost. The majority of these costs are unexpected, such as repairs following a tornado or flooding, but certain HOAs use special assessments to pay for costs when they do not have enough funds in their reserve fund.

HOA Management

The property owners can handle the entire process by themselves. But with more than a handful of properties, the norm is to employ an HOA management firm instead. The HOA board, together with other members, takes decisions and then delegates the day-to-day tasks of running the HOA to the management company.

HOA Dues

Every homeowner is responsible for paying HOA fees every month and every other three months. Those funds go toward regular expenses. The HOA can also set aside funds to cover future emergencies and projects by creating an emergency fund. The HOA dues are due in addition to your mortgage payment.

HOAs Planned Development

Moving into a planned community usually requires you to be a member of an association called the HOA and pay their fees to cover the maintenance of common spaces, shared structures, and the exterior. The membership also makes you a part of the covenants and conditions (CC&R). The rules can thwart your desire to have an entrance that is purple, for instance, or parking your vehicle on the driveway because the covenants and conditions typically stipulate the exterior appearance of your home and the cars you can park in front of the property.


If you're not a fan of the hassles that come when you own a house and want to live in a community that has an HOA might be your solution. HOA will take care of landscaping maintenance such as roofing and lawn care, and the rules of the association guarantee that the neighbors maintain their homes in good order as well, which can help maintain the value of your home. Additionally, you'll likely enjoy common facilities like lakes, playgrounds, pools, and security facilities that need no maintenance from you.


Every HOA is created equal, so pay close attention to the content of the bylaws and documents that the developer or seller provides. Covenants and conditions can determine the colors of your home's paint and the number of pets you may possess, how big your pets may be, and the number of trees to be planted in front yards. The covenants will also contain information about moving in and out fees and architectural restrictions; make sure to go over them thoroughly.

Related Stories

Privacy Policy | Terms of Use

© 2024 serefinance.com

Contact us at: [email protected]

Testimonials/success stories may be fictionalized / should not be viewed as expected results