Are you in the market to buy a home? If so, you’ve probably come across more homeowners associations, also known as HOAs, than you expected. According to research published by the Foundation for Community Association Research, nearly 74 million Americans (roughly 27% of the U.S. population) live within the confines of a HOA. This has become a growing trend in cities across the country. So what are HOAs exactly and what do you need to know before joining one? Here, we tell you everything you need to know.

What’s an HOA?

A homeowners association is a community business entity that sets and enforces rules for homeowners, kind of like a local government. You’ll find HOAs in subdivisions, condo buildings and more. To become a member, all you need to do is buy into a neighborhood that’s run by an HOA and pay dues to the association, known as HOA fees.

How much does it cost?

Typically, HOA fees can range anywhere from less than $100 a month to more than $10,000 a year. The fees might seem high, and they will be for some, but consider that those funds are used to provide exclusive services, amenities, and facilities that members can take advantage of.

Homeowner associations keep some of what they collect in a separate reserve, set aside for emergencies and large renovations. A new roof, new siding, new sidewalks, gutters, and pool repairs are just some examples of how a HOA could use the reserves to pay for repairs. If short on fund, the condo board could vote to pass a special assessment to request additional funds, or take a out a loan on behalf of the community.

How do HOA’s work?

The HOA is run by the residents of that community. The elected leadership, like its members, are all people who live within that community. Their job is to enforce the rules, maintain the community and source trades to make repairs.

Every HOA uses a rules document to outline how members should maintain their property. For instance, the type of landscape allowed, colors you are allowed to paint on your house, the size restrictions of your backyard shed, and whether or not you can rent your property and for how long.

For enforcement, they typically only resort to verbal and written warnings, as well as the occasional fine. However, serious cases can result in eviction.

Pros of being an HOA member

• HOAs maintain property values and neighborhood appearance.
• You’ll have the confidence of knowing this association is run by your neighbors and not outside interests.
• Associations offer member-exclusive benefits, like snow removal, swimming pools, a fitness center and private security.
• The leadership runs the association, so you likely won’t have to do anything to enjoy the perks.

Cons of being an HOA member

• Between dues, fines and assessments, you’ll likely be spending a lot as a member.
• Many homeowners take issue with restrictive HOA rules, like specific landscaping maintenance, where you can park in your driveway and so on.
• If you’re not able to keep up with all the costs, the HOA could foreclose on your home.

Living within an HOA

1. If you’re more the “independent” spirit when it comes to your property, we recommend you avoid homes governed by homeowners associations. They typically have strict guidelines against certain changes to properties, which could create conflict down the road.
   
   
2. Research goes a long way. Before you make an offer on a home, we recommend researching its HOA along with the rules to make sure they’re the right fit for you.
   
   
3. Regularly attend association meetings. Once you’re a member, you should be able to speak on behalf of yourself and your community. Plus, regular attendees are more often heard by the leadership than members who never participate.
   
   
4. Pay your dues on time. Withholding puts you at risk of additional fines, including legal fees, and could potentially cause your home to be foreclosed.