When you’re on the hunt for the perfect home, there are plenty of things to consider: size, layout, location, and curb appeal, just to name a few. Something else to add to the list? Whether or not the property is part of a Homeowners Association (HOA) community.

In this guide, we’ll explore what it means to live in an HOA community and provide valuable insights for anyone considering moving to one of these areas.

Understanding Homeowners Associations

When purchasing a home within an HOA community, you cannot “opt out” of HOA membership: homeowners automatically become members of the association, agreeing to pay applicable fees and adhere to all community rules. This makes it particularly important that each buyer understands what it means to live with an HOA.

What is an HOA?

A Homeowners Association (HOA) is an organization formed by residents within a community to keep the community clean, safe, and pleasant for homeowners. HOAs operate in single-family and multi-unit housing communities, working to manage shared common areas, enforce rules, and collect fees for the maintenance and improvement of the neighborhood. They are run by an elected board of directors, usually composed of community residents.

Members of an HOA pay assessments (or dues) to the association, and must follow the community’s governing documents, including:

  • Covenants, Conditions, and Restrictions (CC&Rs)
  • Articles of Incorporation
  • Bylaws

Homeowners who fail to follow the established guidelines may be subject to penalties, including fines.

What are the benefits of HOAs?

HOAs are designed to benefit the neighborhood as a whole, and the vast majority of the time, it works. In fact, one 2018 poll shows that 90% of HOA members were happy with their association and its board.

So what exactly does an HOA do to benefit its community?

  • Create curb appeal and maintain common areas. One of the primary advantages of living in an HOA community is the consistent aesthetic appeal. HOAs often enforce strict guidelines regarding property maintenance, landscaping, and architectural standards, for individual homes as well as community areas and buildings. This ensures that the neighborhood maintains an attractive and cohesive appearance, theoretically contributing to higher property values.
  • Provide amenities. Many HOA communities offer amenities such as swimming pools, fitness centers, parks, and recreational facilities, available only to residents and their guests. These shared spaces can provide residents with access to facilities they might not have space for on their own individual property.
  • Foster a sense of community. Many HOAs offer community activities that bring residents together. Shared standards and regulations also help residents assume collective responsibility for the neighborhood, creating a “pride of ownership” in where they live.
  • Offer conflict resolution. HOAs act as mediators in disputes between residents. Governing documents provide a framework for resolving conflicts, whether they relate to property boundaries, noise disturbances, or other issues. This can help maintain a harmonious living environment and encourage neighborly behavior.
  • Enforce unified standards. Living in an HOA community means adhering to a set of standardized rules and guidelines. This helps create uniformity and predictability in the neighborhood, reducing the likelihood of neighbors engaging in activities that could negatively impact property values.
  • Helps maintain property values. For most people, their home is their greatest investment. HOAs help protect this investment by creating communities that attract future homeowners, as well as encouraging property maintenance so that your home’s value stays high.

Are there any downsides to HOAs?

While most homeowners are happy with their HOA neighborhoods, others are wary of them, and may be hesitant to move to one. When making the decision for yourself, remember that everyone has their own preferences and priorities when it comes to the neighborhood they live in, and one person’s bad experience does not necessarily reflect on HOAs in general.

Still, it’s important to acknowledge some of the common complaints that homeowners may raise about their HOA. These usually include things like:

  • Monthly fees. Membership in an HOA community comes with regular fees, usually charged monthly, quarterly, or annually. These fees cover the maintenance of common areas, amenities, and other shared services. Homebuyers should carefully consider these additional costs when budgeting for homeownership, as factoring in these payments will affect your monthly expenses.
  • Restrictions on property modifications. While the aesthetic standards imposed by HOAs contribute to a well-maintained community, they can also limit homeowners’ freedom to modify their properties. Homebuyers should be aware of any restrictions on exterior changes to ensure their plans align with the HOA guidelines.
  • Enforcement of rules. HOA rules exist for good reasons. That said, some residents may find the strict enforcement of rules and guidelines by HOAs to be overly intrusive. Violations can result in fines or other consequences, and residents may feel restricted in expressing their individuality through home modifications or landscaping choices.
  • Lack of control. An association’s board makes decisions on behalf of the community, which means a homeowner may sometimes disagree with the decision that is made. Remember, though, that the board is elected by other residents, and that anyone who wishes to have more of a say in these decisions can volunteer to serve on the board themselves.

Tips for home buyers considering an HOA community

Remember: once you buy a home in an HOA community, you automatically become a member of that HOA. Because of this, it is worth taking some time to thoroughly understand what you are signing up for.

Here are some things home buyers can do to avoid being caught off guard:

  • Review HOA documents. Before making a purchase, thoroughly review the HOA’s governing documents. This will provide insight into the rules and regulations that will govern your life in the community.
  • Understand financial obligations. Clearly understand the financial obligations associated with the HOA, including monthly or annual fees and any special assessments. Evaluate whether these costs align with your budget and financial goals.
  • Attend HOA meetings. Attend an HOA meeting or two to get a sense of the community dynamics, the effectiveness of the board, and any ongoing issues. This will help you gauge whether the community aligns with your values and preferences.
  • Ask about rule flexibility. Inquire about the flexibility of the HOA’s rules, especially regarding property modifications. Some HOAs may have a more lenient approach, while others might strictly enforce guidelines.
  • Research community reputation. Research the reputation of the HOA community. Speak with current residents to gather insights into their experiences and satisfaction with the association. Online forums and community social media groups can also be valuable resources.

Understanding disclosures

Anyone selling a home in an HOA community must provide the buyer with certain essential documents about the association, once they have accepted the buyer’s offer. This so-called “disclosure” is crucial for potential buyers, as it gives them an insight into key information related to the HOA, including:

  • HOA fees. How much can the buyer expect to pay, and how often?
  • Governing documents. What are the regulations that govern the community?
  • Financial health. How is the HOA doing financially? If it is struggling, what could that mean for homeowners?
  • Rules related to resale inspections. What rules does a homeowner need to follow in order to sell their home in the community?

Preparing HOA disclosure documents can be a complicated process, and buyers should not attempt to gather this information on their own. The (sometimes significant) cost of preparing disclosure documents should be covered by the seller.

A thorough and transparent disclosure process will help you make a well-informed decision about this significant purchase, and will help ease you into living in a neighborhood with an HOA.

Just as every home is unique, every HOA is unique as well. As a home buyer, it’s important that you find a community where you feel welcome and at home, and the HOA can play a big part in that. When searching for your next home, take the time to learn about the community’s HOA, and make sure that every aspect of it, from fees to regulations, fits within your budget, lifestyle, and preferences. Remember that an HOA is there to make your life as a homeowner better, and more often than not, your HOA will set you up for success in your new neighborhood. Good luck with this exciting step as you prepare for your next home!

If you are a current HOA board member and are looking for a new HOA management company for your community, contact Spectrum Association Management today for a free quote and to learn more about what makes us refreshingly different.