HOA, COA, And POA: How to Tell the Difference

When it comes to buying a home, it can be overwhelming! Understanding all aspects of the responsibilities and requirements is critical when your intended new home is part of a more significant community association. Almost 80% of all new homes are part of a community association such as an HOA or COA.

However, you may notice that various acronyms are sometimes used interchangeably and often without explanation, indicating your path to new homeownership.

A Quick Glance: POA, HOA, or COA

POA, or Property Owner's Association

This is a broad phrase that can be used in various contexts, but it is often the legal manner in which associations are designated as having in-laws or other policies that impact them. However, the most typical application of this word is for mixed-use groups that may include both commercial and residential property owners. A POA may consist of residential and business property, but it is not needed.

HOA, or Home-Owner's Association

The most well-known type of community association, an HOA, is a corporation formed due to deed restrictions. The HOA may own a common area with amenities like a neighborhood gateway, pools, or parks. When you buy a home or a lot, you instantly become a member of the HOA. The HOA is based on governing documents establishing community rules and procedures that everyone must obey.

COA, or Condo Owner's Association

Like an HOA, every condo owner automatically becomes a member upon purchasing their unit. Each owner pays dues or assessments to help keep the shared structure in good condition. Each condo owner is also a co-owner of the building and grounds. State law governing condo owner's associations often varies from the statutes governing homeowner's associations.

What about Townhomes? 

Townhomes are often the most difficult to ascertain which type of community association they are. Depending on various factors, they could be an HOA or a COA. The best way to find out is usually found in the articles of incorporation.

Determining Where You Stand in the HOA, COA, and POA Situations

Are you currently a member of an HOA, COA, or POA? Is it a home you're thinking of buying in one of these associations? Understanding the type of governance in the community is crucial to making an informed decision about one of the most significant financial investments you will ever make.