HOA community with pool.

Understanding Homeowner Associations

Updated February 5, 2019 . AmFam Team

Looking to buy a condo or home in an HOA community? Learn more about HOAs, what they cover and how to decide if an HOA is the right choice for you and your home.

A homeowners association (HOA) is an organization within a community — typically condominiums or subdivisions — that makes and enforces rules for properties within the jurisdiction. When you purchase a home or condo with an HOA, you become members of that association and are required to follow the HOA’s rules and pay the monthly fees.

But what exactly is an HOA community and what are you paying for? We’ve broken down the meaning of HOA to get you in the know and clear up any confusion.

How Do HOAs Work?

An HOA is typically funded by required memberships in the community they serve. Each month, you’ll pay a fee to your HOA who will use the money for upkeep of the community. The association is usually ran by a group of board members elected by the neighborhood. These leaders help oversee the association by organizing meetings, developing regulations and enforcing rules for property owners.

Typical Homeowners Association Rules

The rules for HOAs vary depending on the community and location you live in, but commonly homeowners associations include rules like:

  • Structural restrictions, like type of fences or landscape allowed
  • Exterior paint color of your home
  • Style of your mailbox
  • Type, size and number of pets you own
  • Time limit for leaving up holiday decorations
  • Noise regulations
  • Parking

Before purchasing a home in an area controlled by an HOA, it’s important to review all of the HOA rules and regulations of the community. This way you know what you’re getting into and you’re okay abiding to the HOA restrictions in your jurisdiction.

Average HOA Fees

Belonging to an HOA means you’ll be paying a monthly fee which goes towards the upkeep and maintenance of the community. The cost of HOA fees vary depending on a number of factors, like the property type, size, location and amenities. Typically, the more amenities offered, the more expensive your HOA fee.

For example, a subdivision in the suburbs will have a lower HOA fee compared to a high-rise condo in the city with a pool, gym and doorman service.

When you’re shopping for a home within an HOA jurisdiction, make sure you’re aware of the HOA fee amount so you know exactly how much you’ll be paying alongside your mortgage payment. This will help you have a better estimate of how much you can actually afford.

Benefits of a Homeowners Association

You may have to pay a fee each month to belong to your HOA, but that cost comes with some attractive benefits! The benefits differ among HOA’s, but typically communities with HOAs include:

Nicer neighborhoods. Sure, you have to follow some rules, but you can be sure your neighborhood has major curb appeal.

Higher property value. Because you’re required to maintain your property and structure, home’s within an HOA are known to have higher property value.

Community amenities. Some HOA amenities include things like pools, tennis courts and fitness centers — and they’re all at your disposal since it’s included in the fee you pay each month.

Basic maintenance upkeep. Oftentimes, maintenance like landscaping, snow removal and plumbing issues are all taken care of by your HOA.

Safer community. Many HOAs have security measures in place, like a neighborhood watch, hired security personnel and/or a gated community to give residents peace of mind and keep them safe.

Close-knit community. The residents within an HOA share a goal to maintain a beautiful, safe and peaceful community. Having a common purpose is a great way to forge a community and build relationships with the people that live around you.

What to Consider Before Buying a HOA Home

If you’re considering purchasing a home with an HOA, you’ll want to make sure you perform in-depth research about your potential HOA before placing a bid. You’ll want to:

  • Thoroughly read through the HOA’s rules and regulations
  • Understand your HOA fees
  • Determine if the total benefits of the HOA are equal to the additional cost each month
  • Talk to other neighbors in the area about their experiences with an HOA

Remember, an HOA isn’t a replacement for homeowners insurance. Though your HOA can step up in a time of need, your homeowners insurance is what financially protects you from the unexpected. Find out more about home insurance protection.

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