What is an HOA?
A homeowner association (HOA) is a residential subdivision typically created as a non-profit corporation by the real estate developer. In states with planned community statutes, developers are required to form a homeowner association based on the number of units in the community. The developer records the initial covenants and bylaws that govern the association. After a certain number of homes are sold in the community, the developer transfers control to a governing board. It is then the elected board’s responsibility to uphold the rules, settle homeowner disputes, create a budget, collect dues, and amend the covenants and bylaws if needed.
Assessments
All people who buy property in the association are required to pay monthly dues. The dues amount will vary from association to association depending on the expenses and amenities within the community. Expenses may include landscaping of common areas, management fees, utilities for irrigation or street lights, insurance, street maintenance and more. Expenses may also include maintenance of roofs, siding, driveways and decks which are more typically found in condo and townhome communities. Communities with pools, parks, recreational facilities, clubhouses, etc. will cost more to maintain than communities with fewer amenities. If a homeowner does not pay the required dues, the board may impose fines. The board may also place a lien against the property and even file a foreclosure after due process.
What are the benefits?
The biggest benefit of living is an HOA is a maintained property value. The board ensures that each home is kept up to a certain standard so individual property values do not decrease. Common areas are also maintained by the association.
Most HOAs have annual meetings where homeowners can vote on new amendments, elect board members, and discuss community issues. This allows all homeowners to have a say in how the community is run.
Also, many associations include amenities such as a pool, gym, and park exclusively for the use of homeowners. Some even plan activities such as block parties for members. This can foster a sense of community between neighbors.
