Homeowners associations (HOAs): Pros, cons, and what you need to know
The homeowners association (HOA) can sometimes garner a negative reputation. Maybe you’ve heard about a meddling HOA that fined someone when their grass was too tall. But what is a homeowners association, and why do communities have them? Are they really out to get you with all their rules?
Here’s the info you need to help decide whether you might want an HOA in the community where you buy or rent your next home.
Key Points
- A homeowners association collects dues and uses the funds to pay for common expenses.
- An HOA creates rules that apply to anyone living on the property.
- The board of an HOA is made up of volunteers elected from among its members.
What is a homeowners association?
A homeowners association (HOA) is an organization that acts on behalf of a group of owners of homes. Those homes might be condos in a high-rise building, a row of townhomes, or a neighborhood of free-standing houses. When someonepurchases a property in a community with an HOA, they typically automatically become an HOA member.
An HOA collects dues from its members and uses the funds to pay for common services. The HOA will have a governing board of directors elected from among its members that decides how to spend the funds and makes sure that HOA rules are followed by its members. The HOA board might also host social events during the year.
What are typical amenities provided by an HOA?
HOAs collect dues in order to provide benefits to the community. Your dues will likely be low if your HOA doesn’t offer much, but the more services and maintenance are provided, the higher those dues will be. Depending on the types of homes, typical amenities might include:
- Maintenance of common areas such as a lobby in a condo building or street corners in a neighborhood.
- Snow removal and other maintenance of common roads and parking lots.
- Tree trimming and mowing of common lawns and parks.
- Maintenance of a pool and/or gym.
- Staffing of a pool, gym, or condo building.
How much does an HOA cost?
An HOA can cost as little as a few dollars a month or as much as thousands a year. You get what you pay for, so if you’re getting a lot of services or if you live in a very expensive or difficult-to-maintain area, you can expect higher dues. According to Rocket Mortgage, the average HOA fees are about $200 to $300 per month.
Will an HOA have rules about my property?
HOAs exist to govern a group of homeowners, and that government usually includes rules. Every homeowner values different things:
- Some people don’t mind barking dogs, but don’t like to look at a neighbor’s unpainted garage.
- You might want to have a privacy fence, while your neighbor likes open properties.
It’s difficult to make everyone happy with a common rule set. If you are someone who balks at any type of restriction, you may feel that having an HOA is too controlling, especially because many HOAs issue fines if you break the rules. However, if you like to live in a well-maintained neighborhood, you might view an HOA as a positive, especially if the rules keep your property value higher.
Some typical HOA restrictions cover:
- Upkeep and maintenance of your home.
- The number of vehicles in front of your property or even on your driveway.
- Running your home as a short-term rental unit.
- Height of grass in your lawn or having weeds on your property.
- Certain items that can’t be visible from the street, such as laundry lines or sheds.
- Types of animals allowed on the property.
The HOA might also require you to obtain approval before you change the color of your home or make modifications to your property, such as adding a deck or fence.
Pros and cons of HOAs
There are several pros and cons to membership in an HOA. Whether the pros outweigh the cons depends on individual preferences. Of course, if you must live in a certain location because it’s close to your job or it’s what you can afford, you’ll have to learn to live with the cons.
| Pros | Cons |
|---|---|
| An HOA is often the only way to get certain amenities, such as a shared pool or a door person. | You might not use the amenities you pay for. |
| HOA dues cover some maintenance that you don’t have to pay for on your own. | The dues may be more than you can afford when added to your other housing costs. |
| Shared rules keep your neighborhood looking nice. | You may be prohibited from doing things you’d like, such as putting in a high fence or keeping chickens. |
Should you become active on the HOA board?
Your HOA will have a volunteer board of directors. Typical board positions and committee heads include:
- President
- Vice president
- Secretary
- Treasurer
- Social committee chair
- Architectural control chair
- Pool, gym, landscaping, or other chair
There will likely be elections for these board positions. The board should hold meetings, probably monthly, which any HOA member can attend. There will usually be written communication from the board, at least annually, which should include records of what your HOA dues have paid for and a budget for the following year.
Your HOA might also hire an outside management company that might collect HOA dues, issue citations for breaking the HOA rules, or manage the pool.
If you’re interested in having your opinions heard, attend meetings and consider running for a board position. Serving on a volunteer board can be hard work, but it can be rewarding to make a difference for all members of your community.
Can I use the HOA benefits if I rent?
Not all HOAs allow renters, but the owner of a home must pay HOA dues even if they are not currently living on the property. Typically, if you are a renter of a property in an HOA, the rights and responsibilities of membership are given to you. Your lease will require you to abide by the HOA rules, and you’ll also be able to use all HOA amenities and benefits. Make sure you get the pool fob or gym access code from the owner of your property.
The bottom line
If you’re buying a home, include any homeowners association fees when considering your monthly housing budget. Are you really going to use the things the HOA provides? It’s usually possible for your real estate agent to obtain the HOA rules so you can review them before you make an offer on a property. Make sure you can live with any requirements before you buy.
Once you buy a property with an HOA, get good use out of your provided amenities. Get to know your neighbors and enjoy your new community. And if you want to change the rules or the way your HOA operates, get involved on the board. No one likes a complainer who doesn’t step up to help out.