What is an HOA?

Did you recently move to a new community and are experiencing the operations of an HOA (homeowners association) for the first time?  Understanding what an HOA is and how it works is important information for you to know. But not only that!  Recognize and learn how an HOA can work for you in your community. We will break down all you need to know, including the different types of HOA’s and what being a part of an HOA community means for you.

What is an HOA?

Before we get too far down the road, let’s quickly define what an HOA is.  HOA stands for homeowner’s association.  The HOA is started as a non-profit organization by the developer of a community. Just like with other non-profit organizations, there is a leadership hierarchy to running an HOA.  The leadership team is called the HOA Board of Directors.  As a member of a community with an HOA, you become part of the homeowner’s association.  Members of the HOA Board of Directors are elected by the residents within the community through a voting process.  After a certain number of homes have been sold, the developer then turns over full controls of the homeowner’s association to the elected members of the Board.

What is the purpose of an HOA?

The purpose of the HOA is to uphold and maintain the value of property within the community.  By enforcing the covenants and maintaining common areas, the community is able to remain nice and cohesive.

What are restrictive covenants?

The restrictive covenants may vary from association to association, but all requirements are clearly outlined in documents called rules and regulations, bylaws, ARC’s and other various covenants.  In addition, there are strict laws that can be enforced by each state specific to maintaining an HOA.  And while the covenants may vary, they generally include things like exterior home additions, pools, architectural elements and fences.  Because people place value on their home and the surrounding area, the HOA helps to enforce elements that can contribute to the overall appearance of a community.  You don’t need to worry about whether or not your neighbor is mowing their lawn because the HOA is looking after those things.

What are HOA dues?

Living in an HOA community is meant to benefit everyone.  The amenities within your neighborhood may include a pool, park, clubhouse and/or basketball court.  Because these are meant to be utilized by homeowners, there are dues required by each homeowner that is used to maintain the community.  Whether or not you choose to participate in using the amenities your neighborhood provides, you are still obligated to pay members’ dues.

How much are HOA fees?  Fees vary from community to community, most averaging homeowners around $200 per month.  Depending on the size of your home and whether or not you live in a condominium community or the features your neighborhood has to offer can impact the amount of money due each month.

The HOA dues are used for many different things, but in general – dues are divided into two parts: one portion of the dues goes towards monthly expenses and the other portion goes towards the reserve fund which may be used for projects as they arise or general wear a tear.

What happens if you violate HOA policy?

As a homeowner, if you violate a covenant outlined in your community’s governing documents, there are consequences.  For severe consequences, the HOA management could potentially evict you from your property.  Generally, they try to work with you and help you get into compliance.  If you’re unable to pay your HOA fees, you can try to work out some sort of settlement with the HOA board.  But it’s important to clearly communicate if you are falling behind.

What are the advantages of having an HOA?

  • Your community’s HOA is responsible for handling the maintenance of all common areas. Using funds collected by homeowners, the HOA will take care of the grounds, pool, clubhouse, walking paths or any other amenities that are meant to add value to the community for its residents.
  • The HOA is also responsible to oversee an architectural or color changes to the homes. If your neighbor loves the color pink and wants to paint their house a bright shade of pink, but you live in an HOA community, your neighbor will not be allowed to paint their house any color they choose.  There are also restrictions on parking in common areas and along streets, that help to keep the neighborhood safe.
  • At some point, you may decide to sell your home. Living in a neighborhood with an HOA that prides itself on maintaining value in their community will help you to be able to do that.
  • An HOA can also help mediate problems if you are having a disagreement with your neighbor. They can assist to resolve conflicts and be involved in any activity that may violate the community documents.

What are the disadvantages of having an HOA?

  • Above and beyond what you pay on your mortgage and taxes every month, you are also expected to pay an HOA fee which can be annoying.
  • Because the regulations of the community are strictly enforced, you may find it difficult to make changes like adding an exterior modification that requires submitting plans for approval.
  • Some HOA’s can be somewhat overbearing. While it is your home, your home resides in a community with strict governing documents to ensure its mutually beneficial to all residents.  The freedom you may be used to by not living in an HOA community may require some adjustment on your part.

Overall, the HOA’s goal is to maintain the value and aesthetic of a community.  Try to be informed when it comes to what the expectations are and what you can do as a homeowner to have a voice.  Understanding what an HOA is and how it works will be a great resource while navigating your life as a homeowner. At Boardline Academy we provide HOA board member training and certification courses to help board members improve their communities.

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