What To Know About Homeowners’ Associations

What To Know About Homeowners’ Associations

Home Owners Associations
Photo by Tom Rothery

Homeowners Association

63 million Americans live in an HOA governed community, according to the Community Associations Institute. There are some things you need to know.

When you purchase a property in a planned development, like a townhouse or condo, on leased property or a gated community, you are required to join the community’s homeowners’ association, often referred to as an HOA. This means you must pay a monthly, quarterly annual Homeowners association fees for the upkeep of common areas and the building.

There are laws governing the activities of HOAs, however, associations can still have a powerful impact on your rights as a homeowner.

When a resident breaks a rule, such as, paints a house bright pink, or brings in a pet that exceeds the weight restriction, the HOA may take action against the property owner. It is common for the action to simply be a requirement of the homeowner to reverse the violation.

Although, a common penalty is to require the homeowner to pay a fine. If the homeowner refuses to pay, the HOA can take more punitive actions which may include forcing the sale of the home.

HOA Basics

All residents are equally responsible for the maintenance of the common areas such as landscaping, swimming pools, clubhouses, and sidewalks. HOA fees help maintain the quality of life for the community’s residents and protect property values for all of its residents.

HOA fees often range from a couple hundred to $500 per month. The more upscale the community and the more amenities it has, the higher the homeowners’ association fees tend to be. On top of monthly fees, major expense such as board approved community infrastructure updates, the association may charge an additional assessment which can run hundreds or thousands of dollars.

It is common for HOA fees to be divided into two parts. One portion goes toward monthly expenses, and the remaining money goes into a reserve fund. This fund is used to save for long-term repairs and replacements such as roofs and plumbing. These funds cover most emergency expenses which arise from acts of God, vandals or wear and tear.

Covered by HOA fees:

  • City services: Services such as trash removal, water and sewage tend to be covered.
  • Lawn Service: General lawn maintenance.
  • Snow Removal: The removal of snow from property, streets and common areas.
  • Pest control: HOAs often schedule a monthly inspection from a pest control company.
  • Insurance: Although you still need an individual insurance policy to cover everything inside your condo. Often HOA’s includes insurance for damage to the outside of the building, common areas and the property around it.
  • Maintenance and repairs:  Roof leaks, exterior painting, driveway pavement repairs. It will cover the cost of gym or pool maintenance, if applicable.

Can’t pay the HOA fees?

Most lending institutions take HOA fees into consideration when they write your mortgage. It’s in their best interest to evaluate your monthly income compared with your monthly expenses, such as your mortgage payment, taxes, and HOA fees.

Unfortunately, bad things happen. If you lose your job or are unable to pay your HOA fees, you might be able to work something out with the HOA board. However, if you are delinquent, it is possible the association will higher a specialty Homeowners Association Collection company It’s important that you keep in good communication with your Association, if you start to fall behind.

Rules Of HOA

Home Owners Associations set rules which all residents must follow. These rules are called covenants, conditions and restrictions (CC&Rs). In a common building, rules may include the colors you use, pet restrictions and parking.

Five Things To Think About:

  1. Always be sure the home you want to buy is in compliance with HOA rules.
  2. Understand all the fees.
  3. Consider your willingness to work with a HOA and restrictive rules.
  4. How well is the HOA managed
  5. What insurance does the organization have and what is covered.


Unfortunately, some HOA boards meet as little as once or twice a year. This means it can take a while to resolve issues. If a board decides an issue is worth pursuing, it may require a community vote. If the resolution passes by a majority, the board will usually adopt it.

Management Companies

Homeowner’s associations are governed by boards made up of members of the HOA community. If you wish to have a voice in how your community operates, you can run for a seat on your local HOA board. It’s a lot of work and you won’t get paid. This is one of the reasons many HOAs turn to professional third-party management because the amount of work for most of the residents is too much to do without help.

A Home Owners Association management company helps the elected association board fulfill its duties. A full-scale management contract generally relegates the HOA board to decision-making only roles. HOA managers collect dues, maintain properties and pay bills. The company handles enforcing the Bylaws and Rules for the property. They also receive calls from the homeowners about property related issues.

The cost for management services HOA managers provide is usually a flat rate per door. Hiring a professional manager can save money, if the manager is able to better coordinate maintenance and hire less expensive services and vendors.

Crazy Rules

Some boards can impose what some homeowners believe are invasive, silly, or elitist rules according to houselogic.com. In 2014, a Myrtle Beach association decided homeowners could have no more than two pets. A longtime resident couple had three dogs and were threatened with a $100 per day fine unless they got rid of one of their dogs.

There’s old story, reported in news outlets, about a homeowner in an upscale gated community in  Texas, who was threatened with fines for parking his new Ford F-150 series truck in his driveway overnight. The board made exceptions for several luxury brands, however, his mid-range truck was ruled “not classy enough.”

It’s Not All Bad

The role of the homeowner’s association in a community depends on the powers that the covenants give it. Usually, the HOA oversees the maintenance of the common areas of the property and provides shared services. It’s also responsible for collecting your dues, using them to pay the bills and administering the reserve fund, which saves money for major expenses. HOAs also enforce the community’s rules and mediate disputes between community members. A homeowners’ associations are not all bad and can be positive.

There is a balance to the HOA restrictions. If all the homeowners follow the HOA rules, they can avoid problems which plague some unrestricted neighborhoods, like poor home maintenance, trash piling up in a yard or hallway, deterioration of gardens and roads.

This can mean good news for your property value. It’s also common for you to have access to luxurious amenities, like a pool, golf course, or recreation center.

If you consider buying a home in a Homeowner Association governed community, or possibly live in one, but run into disputes with the HOA or your neighbors, it may be a good idea to contact a real estate lawyer.

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