HOA stands for Homeowner Association and is a private organization and a governing body of a specific community, development, subdivision, or complex. The HOA enforces rules, maintains common areas, and manages the amenities like pools or gyms. The HOA also helps manage, organize, and preserve the community as well as help to protect and increase property values.
HOAs are generally formed when a community is built. Typically, the homeowners vote to create a board of directors who run the association. The board decides on the community’s services and features as well as set and enforce the rules and standards for the neighborhood. It is important to know how the HOA is run and who is on the board. Requesting HOA rules and documents ahead of purchasing can help you become familiar with the rules such as the following:
- Pets - There may be limitations on the type of pets, breed, size, and how many pets are allowed. You might be looking for a house with a huge backyard where you can raise chickens, for example, but your HOA might have some restrictions when it comes to these types of animals.
- Parking - Rules regarding parking overnight on the street, leaving your garage door open for an extended period of time, or parking for any commercial vehicles and RVs or trailers may be restricted.
- Property modifications or changes - You may need approval from the board and/or your neighbors to update or make changes to your house or yard. Likewise, some property additions might not be allowed at all.
- Leasing or renting restrictions - You may need to get permission from the HOA board to be able to rent the home. Or you may be required to join a waitlist if there are already too many homes in the neighborhood that are being rented. This is crucial if you want to use your home as a future investment property.
Make sure to also explore any rules regarding:
- Noise levels
- Yard decorations or structures
- Yard work and maintenance
- Fencing height and placement
- Placement of an outdoor basketball hoop
- Exterior paint colors and other design or planting choices
- Use of shared amenities and common areas (pools, parks, community centers, basketball courts, etc.)
Buying a home in an HOA community means you automatically join the association and follow their rules, including paying dues. You’ll also enjoy the benefits of any amenities or shared services they provide.
HOA Rules and Costs
- CC&Rs: These are the key guidelines, outlining things like property upkeep, noise limits, and even paint colors for your house exterior.
- HOA Fees: These monthly or yearly fees cover maintenance, amenities, and staff salaries. Factor them into your budget.
- Special Assessments: On top of fees, HOAs may charge one-time assessments for major repairs or projects. Be aware of the HOA's financial history for potential future assessments.
Making the Choice
- Pros and Cons: HOAs can maintain property values, provide amenities, and foster a sense of community. However, they can also limit your freedom with restrictions and impose fees. Weigh the pros and cons carefully.
- Research the Specific HOA: Not all HOAs are the same. Investigate the specific HOA's reputation, financial health, and history of disputes.
Ask your real estate agent or a community representative for the HOA’s contact information so you can ask them questions directly. This extra step will help you understand how the HOA board communicates, how they handle disputes, their decision-making process, and the level of influence and input individual homeowners have in shaping the community’s policies and rules.
Before settling in a particular neighborhood governed by an HOA, explore how rules are set and enforced, what penalties are in place for not following them, and the process for resolving disputes. In some HOAs, the consequences may include being fined or sued, or worse, having the HOA place a lien on your property or foreclose on your property.
