If you live in a condominium, townhouse, or a single-family home in a planned development, chances are you have a homeowner’s association (HOA). HOAs offer key benefits that people enjoy in their communities, such as managing maintenance, maintaining the exterior and outdoor areas, and operating shared amenities like clubhouses or pools.

Like most services, those organized by your HOA also come with a cost. Associations also set guidelines and restrictions to ensure everyone in the neighborhood enjoys their space without unwelcome disturbances.

In this post, we will dive into the typical structure and duties of an HOA as well as the advantages and disadvantages of living in a community with one.

What is an HOA?

Homeowner’s associations are usually comprised of a board of directors who live in the community and are elected by their fellow residents. The association’s primary function is to ensure all residents are adhering to body’s established rules, sometimes known as covenants, conditions, and restrictions (CC&R).

The duties and responsibilities of a HOA can vary, but most associations manage at least these three:

  • Setting a budget. Associations have to set a budget and ensure expenses related to shared amenities, regular upkeep, and maintenance are paid.
  • Addressing resident concerns. This can include resolving conflicts between residents or other external issues.
  • Establishing new rules. Although some don’t care for rules, they do ensure everyone in the community knows what to expect from their shared living area. As issues arise, the HOA can create new rules to keep everyone happy and comfortable.

For higher-end developments, additional responsibilities might include annual projects, planning community events, or even tougher enforcement procedures for violations.

What Are the Advantages of an HOA?

There are many benefits that HOAs provide through their management of tasks and services homeowners may prefer to delegate than take care of on their own.

For starters, HOAs can manage most or all of the exterior upkeep. This is especially true in condos and townhouse communities. Not having to worry about outside maintenance or regular upkeep like mowing the lawn, trimming bushes, and other landscaping comes as a big relief to many homeowners.

In addition to keeping the outside of your home in top shape, some HOAs also take care of these common property management functions:

  • Maintaining heating and air conditioning systems, electrical systems, plumbing, lighting, elevators, and security systems.
  • Repairing roads, roofs, walls, and other building components.
  • Organizing waste pickup and recycling.
  • Snow removal.
  • Painting and cleaning common area interiors, including floors and walls.

Many owners find the amenities managed by HOAs to be exciting features. This can include clubhouses, pools, gyms, walking trails, parks, and other shared spaces.

And perhaps the most important advantage of HOAs is that they can help protect your investment by safeguarding the value of your property. Through their diligent maintenance and assurance that residents follow reasonable rules, buyers can feel confident about purchasing a property managed by an HOA, which helps increase your home’s value over time.

What Are the Disadvantages of HOAs?

HOAs need funds to operate, and those funds come from residents. As you’re comparing homes when you’re buying, you’ll need to weigh the costs of an HOA against their amenities and services.

You can be assessed fees for violations of the association’s rules. In addition, if you fall behind on your payments, or fail to pay fines imposed, they have the authority to obtain a lien against your property. While this is unlikely to be encountered by the majority of residents, it’s worth noting.

They can be strict about the exterior of your home. If you fancy a crazy color for your front door or the outside of your house, you may be out of luck in an HOA community. Many associations have rules about how the outside of your home can look to maintain standards and an overall cohesive appearance. This also extends to maintaining a clean and kempt exterior free of trash and clutter.

You can’t be so loud that you disturb your neighbors. Everyone deserves to feel at home in their own home and to have a place of calm. If your everyday tasks are too noisy, you could be in violation of HOA rules.

How Can I Decide if a House in an HOA Community is Right for Me?

Only you can make the determination if the benefits of an HOA outweigh any concerns you have about it. There are some easily distinguishable perks that we’ve explored, but there are considerations you should be wary of. We recommend that all buyers take the time to weigh the pros and the cons and arrive at a decision that they feel truly confident in. After all, this is a place you’ll want to proudly call home.

Our loan officers are home financing experts, but they are also helpful advisors for your home buying and homeownership experiences alike. Once you connect with someone from our team, they will support you in all of your homeownership concerns, providing reliable guidance and recommendations.

The included content is intended for informational purposes only and should not be relied upon as professional advice. Additional terms and conditions apply. Not all applicants will qualify. Consult with a finance professional for tax advice or a mortgage professional to address your mortgage questions or concerns. This is an advertisement. Prepared 5/20/2021.