The Homeowner’s Guide to HOAs

Whether you're a new homeowner or just a homeowner new to an HOA, it can be difficult to understand exactly what your responsibilities are and how these new rules will be enforced.

A homeowners association, commonly referred to as an HOA, is an organization in a neighborhood, community or complex that determines and upholds a set of rules or standards for its properties and residents. HOAs are becoming increasingly popular in the U.S., with the number of HOAs on record growing by nearly 60 percent over the last 30 years.

Generally speaking, HOAs exist to help maintain quality of life in these communities and protect property values for all homeowners. These associations typically charge homeowners a fee or regular dues to help maintain things like common areas, landscaping or other amenities.

What kind of rules does an HOA enforce?

HOAs help all homeowners remain equally responsible for shared common spaces such as landscaping, elevators, swimming pools, clubhouses, parking garages, fitness centers, sidewalks, security gates, etc. In addition, HOAs define a set of rules known as covenants, conditions and restrictions (CC&Rs) that all residents must follow. CC&Rs vary from association to association, but guidelines generally deal with architectural features like fences, pools, porches or other exterior home features.

Other common restrictions cover things such as line drying laundry, satellite dishes and pets. CC&Rs may also restrict certain activities that can occur at your home or neighborhood.

When buying a home, many individuals find value in the house, the property its located on and its surroundings. HOAs hold homeowners to high standards to keep communities and neighborhoods proud of their appearance.

Who's behind the HOA that sets rules and regulations for my community?

An HOA is typically made up of elected community residents who sit on a board of directors or governors. When you purchase a home in a community that's governed by an HOA, you automatically become a member of the homeowners association (and are usually required to). As the community continues to grow, residents can then elect qualified members to make up the Board of Directors. The board members tend to have regular meetings open to homeowners to discuss major issues and concerns facing the community.

HOAs are governed by by-laws that dictate how the HOA will be run and spells out the process for voting, meetings, board member roles and other operating guidelines.

While each HOA is different and subject to local property laws, they'll likely create the following governing documents: rules and regulations, by-laws and CC&Rs.

How are HOA rules enforced?

HOA rules are generally legally enforceable and penalties are appointed when violations occur. Consequences can be severe depending on the nature and length of your violation, and can include fines, legal action, or—in the worst cases—eviction. If you openly commit a crime or break a law, the HOA can report it directly to authorities.

If you're unable to or refuse to pay your HOA fees, there can be penalties similar to missing mortgage payments. If you run into tough times and are unable to pay your HOA fees, try proactively communicating with your Board of Directors before you miss even one payment.

What are the pros and cons of living in an HOA community?

Here are some things homeowners usually consider to be the pros of working with an HOA:

• Communities with required HOAs typically provide shared spaces and common areas like pools, clubhouses, sport courts and other amenities homeowners may not be able to afford on their own
• HOAs are generally responsible for maintaining and repairing any shared or common spaces
• The end goal of an HOA is to help homes in the community retain their value
• HOAs can mediate conflicts and issues between community members as they arise

Here are some of the downsides to working with an HOA:

• HOA fees are an additional expense and can be expensive
• There are hoops to jump through if you're interested in modifying, renovating or remodeling certain aspects of your home
• Depending on your lifestyle, you may desire a sense of autonomy and privacy that HOAs can lack

At the end of the day, purchasing a home that's part of an HOA will depend on your lifestyle and what you're looking for in a home. Read all of the governing documents provided by an HOA before committing to a purchase to make sure they seem manageable to you and your family.