Small model homes surrounding cubic blocks spelling "HOA" on a reflective desk

Confused about homeowners' associations? We've got you covered.

It isn’t hard to see why homeowners’ associations (HOAs) are misunderstood. You may not know the board members on yours and, let’s be real, the meetings are rarely very exciting. The HOA rules are often buried in page after page of boilerplate legalese that seems designed more to numb the mind than it is to explain things clearly. The good news: It doesn’t have to be that complicated.

What is an HOA?

At its simplest, an HOA is a group of homeowners banding together to manage the needs of their community. They've become increasingly common in suburban neighborhoods where street maintenance, lighting, landscaping, and a whole host of other community concerns are managed by the homeowners themselves rather than the city or county. In larger communities, they can resemble a small city government, and it's common to see HOA management companies assuming many of these duties.

An HOA is established with a Covenants, Conditions & Restrictions (CC&R) document, known as a “governing document.” It's in your best interest to read and understand this document well because it's the “law of the land” in your community. Also, it's best to obtain a copy of this document before purchasing a home in a community with an HOA. If the fees aren't in this document, be sure to request a list of fees. As always, if you’re unclear on anything, your real estate agent should be able to help you understand everything contained in these documents.

Who runs an HOA?

The HOA itself is administered by an elected volunteer board, not unlike a non-profit organization or social club you may be a part of. State laws vary, but it's typically required that the board be elected annually. The board officers are your neighbors and can even be you! Active participation on your HOA board can help you ensure there are no surprise fee hikes or other expenses.

What does an HOA do?

The primary responsibility of the HOA is to ensure things in the community run smoothly. At its most basic, this includes arranging for garbage pickup, making sure the snow is plowed, and keeping the streetlights maintained. In more expansive communities, these responsibilities include having the pool(s) cleaned, paying landscapers, or even staffing a clubhouse. HOAs cover these expenses by collecting dues from homeowners.

Dues can be assessed monthly, quarterly, or annually. Also, there are sometimes upfront payments for new homeowners so be sure to ask about this when looking for a new home. The HOA uses these funds for everything it does to ensure the community is attractive and well-maintained. Typically, an HOA will also maintain a cash reserve in case of an emergency like severe weather damage to structures.

HOA Myths

Frequently, HOAs get a bum rap with the worst examples of mismanagement featured in local news stories. True, some of them deserve it, but these sorts of stories can breed misconceptions. We’re here to dispel some of these myths to give you a more accurate idea of what living with an HOA is like.

Myth: The HOA is inflexible and seeks to antagonize residents. 

This is rare. In most cases, the HOA is made up of the neighbors you see every day who care about the community as much as you do. While there can be a lot of rules set out in the C&CR documents, a simple neighborly conversation can usually straighten out any misunderstandings or problems.

Similarly, if you find yourself in a tough financial situation, it's best to explain this to a trusted member of your HOA board. If they know your situation and challenges, many boards are willing to work with homeowners to find an amicable solution to any financial stresses.

Myth: HOAs control every aspect of your life right down to what color you paint your house.

While it's true some HOAs have rules governing what can seem like minute details, this is also fairly rare. This is occasionally seen in high-end planned or golf course communities, but even then, it's uncommon. If you read the rules and governing documents beforehand, you won’t be surprised if your community has this unusual restriction.

The vast majority of HOAs are, again, your neighbors pitching in to make the neighborhood a better place. The people who volunteer for a role like this are almost always in it for bigger-picture ideals than policing tiny details of their neighbors' lives.

Myth: I’m powerless against my HOA.

Homeowners have rights when pursuing action against an HOA. While it's true that by joining the community, you're entering into a contract with the HOA, that doesn’t mean the HOA can behave wildly with no recourse. They have to hold up their end of that contract too, and if they don’t, you may be entitled to take action against the organization.

The best way to have power in the HOA is to participate. Meetings are open to all members and are, while at times a bit dry, a great source of information about what’s going on in the community. They are also an excellent opportunity to meet your neighbors and, more likely than not, discover you share similar ambitions and desires for your community.

Be Part of Your HOA

While there are a few bad apples in every bunch, the vast majority of HOAs are more akin to a civic organization or a club. Take the time to meet the members of your HOA board and ask why they volunteer their time. You’ll gain a greater understanding of what goes into HOA management, and you'll likely become a better neighbor while doing it.