What You Need to Know about Homeowners’ Association (HOA)


Homeowners’ association comprises people who live in the same community and have similar interests. It usually has a pool and other shared amenities features.

Purpose of HOA

The goal of an active community association is to increase the value of the homes in the neighborhood. It sets rules that govern how the properties look and what homeowners can do to make their homes more attractive. When potential homebuyers see that the community seems great, they’ll be more inclined to buy.

How HOA Operates

Developers of an area come up with the idea of starting up an HOA that governs the development and the region’s rules. The developer then passes it off to the people who buy the homes in the community. The homeowners then vote to have a board of directors run the association. They then decide the community’s features and services and collect monthly fees to support those services. The homeowners association then sets out its rules in a document called the CC&R. This document requires people who buy a home in the community to follow specific rules.

HOA Charges

Depending on your property’s value and location, your local community’s average monthly fee may be less than $170. However, it can be more expensive in high-end communities due to their homeowners’ association’s various features and services. You’ll have to pay the fees for the association every month or every three months for the rest of your life. You’ll also need to include the fees in your monthly budget. As a rule, we suggest that you only pay a portion of your housing costs, such as your mortgage and homeowners insurance. Having money left at the end of the month can help you achieve your financial goals. If the fees put you out of the 25% range, you’ll need to find a cheaper community or a home that doesn’t have an association.

Purpose of the Charges

Your fees help fund your community’s various services, such as the shared amenities. However, some of your payments go into a reserve fund to cover unexpected expenses, like repairs. A special assessment is also a fee you may have to pay to cover an unexpected expense. Usually, these expenses are unforeseen, such as the cost of repairs after a flood or tornado. However, some communities use this method to cover their reserve fund if they don’t have enough money.

Shared Amenities in an HOA Community

If you’re paying for an expensive home, you should know some of the privileges you will enjoy and their cost. A community’s standard features are its swimming pools, fitness centers, and parking lots. Residents can also enjoy other services such as lawn care and trash removal. Remember, the more services and amenities an association provides, the more it will cost you.

Rules in an HOA Community

Rules in the HOA community vary from one community to another. All members, including the HOA board members, are expected to follow the rules because they reside in the area. When you ignore the rules, as a homeowner, you will be sued or get fined by the board. In case of a board member refuses to follow the rules, the homeowners can elect new board members. If you default on paying the monthly payments, you will not be allowed to access some amenities and will produce heavy fines for defaulting.