What is an HOA?

A homeowner association (HOA) is a self-governing organization in a subdivision, planned community, or condominium building where homeowners collectively pay fees to maintain the units or neighborhood. These areas can include swimming pools, parks, parking lots and roads, as well as communal lawn maintenance and landscaping. HOAs are typically run by resident homeowners, unpaid volunteers, who are elected to a Board of Directors that oversees the HOA’s management. Properties within an HOA are governed by a collective set of rules and bylaws that are enforced by the association.

How do HOAs work?

As an HOA member, you will be invited to vote for the Board of Directors who oversee the day-to-day responsibilities of the HOA. This includes the maintenance and care of all shared amenities, collecting fees, and enforcing rules. The HOA’s Declaration of Covenants, Conditions, and Restrictions (CC&Rs) outlines all the community rules and regulations. As a potential homeowner in an HOA, this is an essential document that you will want to review before agreeing to buy a home in the community.

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HOA Rules

When you sign your HOA membership form, you agree to abide by the rules. This agreement is legally binding, so it’s important to know what you’re signing. Typically, the rules will include restrictions on your landscaping choices – such as the type of plants or trees that are acceptable – and on your external décor, including the color of your house, front door, or roof shingles.

These are often regulations regarding fencing type and height limits, the addition of outdoor structures, decks, or pools, home maintenance standards, and holiday lighting. Parking can also be a focus of HOA regulations. This can include limiting the number of vehicles that can park on your property, regulations on street parking, and bans on recreational vehicles, boats, lawn equipment, and bicycles from being left outside a storage unit or garage.

Finally, there may be pet restrictions, occupancy limits, renting and subletting bands, and noise criteria.

HOA Fees

HOA fees are collected monthly or annually. These fees depend on a number of factors, including:

Type of property
Number of properties in the group
Location
Amenities offered
Operating expenses

The Bottom Line

Owning a home comes with many rights and responsibilities. Being a part of these communities that have an HOA can be beneficial because they often take care of some of the nitty-gritty of homeownership, such as property maintenance, utilities, landscaping, and snow removal. But keep in mind, that these organizations can be restrictive by setting boundaries on what you can and can’t do with your property – all for a fee.