RealManage Insight

How Do HOA’s Work for Homeowners?

by Geoffe Browne on Jan 12, 2021 9:21:00 AM

When you start looking for a new property, you may find yourself with a long list of considerations. Among them, you may wonder what exactly it means to belong to an HOA or Homeowners Association. What does an HOA do for you as a homeowner? What are the specific requirements and what exactly you need to do if your new home is an HOA?  Being a member of a homeowners association (HOA) can often be confusing and require additional information from your lenders and real estate agent before you make the decision to buy a property that is governed by these types of organizations. 

HOA Defined

A homeowner's association, more commonly called an HOA is an organization in a subdivision, planned community, or condominium (COA) building that makes and enforces rules for the properties and its residents. Those who purchase property within an HOA's jurisdiction automatically become members and are required to pay dues, known as HOA fees. Some associations can be very restrictive about what members can do with their properties.

Is Membership Optional?

Many first time homebuyers or even experienced homebuyers who are new to HOA may be curious if this is something they can opt-out of, or simply not join, but the structure of an HOA requires that all homeowners in the community, whether owning prior to or after institution of the association, are regulated by it and are not able to simply not participate. Your Realtor® should be able to discuss any and all expectations for homeowners in a particular community and it should be something you address before making any purchasing decisions.

What are HOA Dues or Fees

The amount of an HOA's dues vary immensely across the country and even from neighborhood to neighborhood. Most of these dues get paid annually, often referred to as your "Annual Assessment"  but your HOA may have a monthly fee setup or may require you to pay certain fees in addition to your annual dues at certain times of the year in order to manage unexpected maintenance or other unanticipated expenses. You may pay a relatively minimal annual due designed to help offset the cost of specific services and maintenance for already accounted for common areas, or you may pay a higher fee for more involved services or specialized vendors.

It is very important that you read and understand your communities rules and regulations regarding financial responsibility as the way that dues or fees are assessed should be clearly outlined for all board members and homeowners. You may also be required to vote on financial matters regarding your communities fee structure and it's important to be aware of your rights when it comes to making those payments.

Financial Management Guide for Community Associations

Your HOA will institute some rules about maintenance and upkeep on your property.

Depending on your community and the board serving during your tenure, you may, for example, have to seek approval for adding buildings, including sheds or playhouses, to your property. There may be limits to things that can be displayed on your property. You may have to mow your grass at specific intervals or adhere to specific regulations with regards to the colors of your house or other specific needs. What rules you face will depend on your specific HOA and, for the most part, the desires of the residents. Make sure you review HOA rules before moving in. Some people do not appreciate the restrictions issued by their HOA and may struggle with conflict as a result. 

Not adhering to these rules and regulations can actually result in fines, legal action and in some cases liens being placed on your property. Similar to any governing body, the HOA has many resources at its disposal to ensure compliance. These rules and regulations are not designed to punish non-compliant owners, rather they are designed to ensure the longevity and usability of the community's home values and common areas. 

Rules and Regulations Download - CTA

The HOA may take care of specific tasks around the property.

Most HOAs are responsible for common areas that are shared by residents: pools, community halls, parks, hallways and other common areas in condos. Your HOA may have a wide list of common areas, or it might have only a few areas that are held in common by all residents, including common areas. The annual assessments and dues are often used to pay for the maintenance of those areas or to secure vendors to handle the maintenance. The HOA might handle:

  • Pool maintenance
  • Pest control
  • Mowing services in common areas
  • Keeping up with playground maintenance
  • Garbage pickup
  • Community areas, including clubhouses and rec centers
  • Security lighting
  • Security services, including a security guard, especially in gated communities

Your HOA may also pay for some utility costs, including the cost of internet or cable, depending on your setup and the services available in your area. Make sure you check the specific options offered by your HOA so that you know what is covered. In some cases, you may also get cost savings by using specific providers supported by the HOA. 

Some Basics

  • A homeowner association (HOA) is an organization that makes and enforces rules and guidelines for a subdivision, planned community, or condominium building.
  • The members of a homeowner association are the residents of the subdivision, community, or building; some communities require mandatory membership for individuals that purchase property in the zone.
  • Run by a board of directors, homeowner associations (HOAs) typically collect monthly or annual fees to pay for common area maintenance and the upkeep of facilities. Despite these fees being collected or assessed by a third party in cases where management companies are employed, your fees as a homeowner are always paid to the community association itself and not to the management company.
  • Homeowner associations (HOAs) may impose fines on non-compliant homeowners.

As a member of an HOA, you may have more responsibilities to your neighbors than if you live in a neighborhood that does not have an HOA, but the benefits often outweigh those responsibilities. You'll also find that your HOA helps keep your property looking nice. 

How to Choose an HOA Management Provider - Free Download


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