What is a Homeowners Association?

Photo by realtor.com

Some of our buyers specifically state that they do not want to live in a neighborhood that has a HOA (homeowner’s association), but many are happy to have a HOA because they say it keeps the neighborhood looking great. With the help of this realtor.com article, let’s look at what a HOA can actually do.

Homeowners associations are designed to manage common or shared property, protect owners’ property values, provide services to residents and develop a sense of community through social activities and amenities. A homeowner will pay monthly, quarterly or yearly dues to their HOA.

For a typical single-family home, HOA fees will cost homeowners $200-$300 a month. These fees can be lower or much higher depending on the size of the neighborhood or condo complex and the services provided. HOA fees are usually divided into two parts: Monthly Expenses and Reserve Fund. The reserve fund serves as a safety net for emergency expenses and long-term repairs and replacements such as roofs, plumbing and exterior paint. Sometimes a HOA will require that you pay a special assessment, which is in addition to your monthly HOA dues. This special assessment usually arises when the HOA is hit with an extreme maintenance expense and the reserve fund becomes depleted.

HOAs have boards made up of homeowners. Sometimes a management company is hired to manage larger associations, but there are some HOAs where the homeowners manage themselves. Regular meetings are held and members vote on issues. There are usually rules and regulations in place that homeowners must abide by or penalties will be assessed (fees or possible eviction).

There are many pros and cons to a homeowners association. You can read many of these within this realtor.com article. When looking to buy a property (home, condo or townhome) with a HOA, make sure you read through the HOA covenants and understand their rules, regulations and fees.