Buying a house exposes you to a large number of variables, including industry-specific jargon and abbreviations. HOA is one of these terms. It refers to a Homeowners Association.
What is a Homeowners Association?
An HOA is a regulatory group set up to manage shared property. This group collects regular dues and is then responsible for the upkeep and maintenance of community property. Common examples of this property may be a shared rooftop garden at a condo or a playground and picnic area at a townhome complex.
The more amenities an area offers, the more things there are that will need to be managed, and subsequently, the higher the HOA dues might be. HOAs are also responsible for establishing the covenants, conditions, and restrictions (CC&Rs) of an area. Essentially, HOAs make the rules for the homeowners living in this group. These rules can reach beyond city laws and establish guidelines for pet ownership, property appearance, and even noise disturbance. Copies of these rules should be available to anyone buying a house in the HOA area.
- How are HOA fees determined?
HOA costs are based on a variety of factors. Most HOA fees begin at $200 per month, and prices increase from there. The average HOA will consider the size of your household (a 3-bedroom will be charged more than a studio apartment) and the facilities offered in your housing area.
Facilities go beyond recreation areas like the pool, and will also include maintenance for parking lots, hallways lights, smoke detectors, and elevators. HOA pricing begins with a basic allowance for daily maintenance and then charges a little extra each month for seasonal and emergency expenses.
- Who is part of an HOA?
HOA rules govern all housing units in a given area. While each property is individually owned, the community itself is communal property and subject to HOA rules. Examples of HOA areas can include a townhome community, apartment-style high-rise, or a suburban cul de sac.
HOA basics are managed by a board of elected homeowners. These board members are required to hold regular meetings and provide copies of all CC&Rs to residents. Major decisions will usually be brought to a vote, allowing all registered members of the HOA to have a say in the decision.
- How do HOA rules work?
Property upkeep seems fine, but additional rules can be confusing. How does rule enforcement work, and what happens when you break an HOA rule?
First of all, not all HOA's enact rules equally. Some HOA's save rules for only what they consider the most vital concerns like resident safety and accessibility. Other HOA's are concerned with property appearance and value, as well as impressions when buying a house in the area. An area with multiple sets of rules may have a tiered level of consequences, while an area with minimum rules likely has an established set of guidelines with more equal enforcement. But what's the bottom line?
HOA rules can trump individual homeowner choices. You must follow the rules as stated in your area or face fines. Non-payment of fines or dues can have serious consequences, including a worst-case foreclosure of your property. It's important when buying a home to review any HOA restrictions before purchase to make sure that all items are standards you can comfortably live with.
So should you shop for HOA-qualified homes? It's a balance of choices between amenities and individual choices. For some this is an excellent answer.