Benefits of an HOA: Why 55+ Homebuyers Want a Homeowners’ Association

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HOA made from wooden letter blocks with a miniature house on top.
What are the benefits of an HOA?

Active adult communities often have established homeowners’ associations (HOAs) that manage operations and make their residents’ lives easier. These are legal entities, designed to protect the homeowners’ collective interests.

The services HOAs provide and accompanying fees vary from community to community. In new 55+ communities, an HOA gets created with a governing document, known as a Covenants, Conditions & Restrictions (CC&R). Here, you’ll find the HOA’s board structure, rules and regulations, member elections, and other essential operational guidelines.

For the most part, an HOA will be headed up by a president, vice president, secretary, and treasurer. There may also be appointed positions and committees to handle specific functions, especially in larger communities. An HOA board might be made up of community residents who volunteer their time. Other properties hire HOA property management companies that handle the work. You may see this more frequently with larger properties.

More than 25% of people living in this country own homes in private communities that have housing, condo, and cooperative associations. That translates to 27.5 million occupied homes. Out of all the states in the U.S., Florida has the highest concentration of community associations. This isn’t surprising, since there are close to 700 of these neighborhoods in the Sunshine State.

Active adults who live in communities with management associations can enjoy maintenance-free, lock-and-leave lifestyles—one of the key benefits of an HOA. Depending on what is offered, these residents can pack their bags and leave on week-long trips without a care in the world. They don’t need to stress about the lawn being mowed or their driveway getting shoveled in case it snows. But if you’re considering a private community with an HOA, it’s important to understand how these governing bodies work and how the fees are assessed.

Why Do HOAs Exist?

A senior lady waving to her neighbor standing near a fence.
The goal of an HOA is to create an environment that supports the rights of everyone who lives in the community. Homeowners sign contracts, agreeing to live under reasonable restrictions and obligations. When everyone participates, the neighborhood benefits as a whole.
One of those obligations is to pay HOA fees, which can cover a variety of services from maintenance to amenities. All decisions, including the yearly dues, are group efforts, and homeowners can attend meetings, volunteer, vote, and participate in other ways.

Age Restriction

HOA rules and guidelines vary from community to community, but one of the most important regulations is an age restriction. Some are for 55+, 45+, 50+, or even 62+, and there are also neighborhoods without age restrictions but designed for active adult lifestyles.

Although it’s illegal to discriminate in housing based on age, 55+ communities have a legal exception under the Fair Housing Act. When there’s an age restriction, the HOA rules will specify that at least 80 percent of the homes have one or more residents who are at the noted age or older. There must also be policies and procedures showing the community’s intent to operate as an age-restricted community.

The HOA usually allows other family members living in the same unit (spouses, children) to be younger as long as that 80 percent remains stable.

Mediate Disputes

An HOA can step in to mediate when homeowners have disputes with neighbors. It can also be a useful resource when there are issues with a builder, a community employee, or an on-site service like a property shuttle. It’s always a good idea to attend the meetings, especially when you first move in. This is the best way to learn the ropes and meet your neighbors.

Association Fees

A CC&R will spell out the association fees, when they are due, and what services the HOA provides. The collected dues pay for those services and fund cash reserves when emergencies pop up. Examples of those might include needing to replace the clubhouse roof or setting up vaccination facilities. This is better than having to pay surcharges at your fitness club or worrying about where to go for your shots.

The board administers fund distributions and monitors and balances; this information is usually shared at board meetings and in reports.

You could compare an HOA to a small-town government. When a community first opens up, the builder may staff the HOA board until enough homeowners can participate or an outside party is hired. The president and other members are elected by the homeowners each year unless specified otherwise.

How HOAs Handle Money and Legal Matters

A person reading a HOA rules and regulations document.

An HOA that has a homeowner on the board with an accounting or financial management background is lucky because someone must handle the bookkeeping, complete financial reports, and advise the board on financial matters. When that kind of help isn’t readily available, an outside accounting or financial management company may be hired. These third parties can also send out the bills, collect the funds, and submit past-due notices to homeowners who are behind on their payments. Collection agencies can also be contracted when residents aren’t sending in their HOA dues.

Compliant With Laws

HOAs also enter into contracts with law firms to ensure that the rules and operations are compliant with federal laws like the Americans with Disabilities Act and the Fair Housing Act. There may be state and local laws that also come into play, and it’s important to follow them as well.

An HOA’s CC&R rules are also supposed to be adhered to, and some HOAs are stricter about this than others. When homeowners, vendors, or other involved parties violate the rules, the board should consult on the matter and come to a decision. They may vote to send out a violation notice, have a vehicle towed, or terminate an employee or vendor.

Insurance Needs

All HOAs must manage the community’s insurance needs too. This coverage might include common areas, street lights, and amenities. So if lightning strikes the clubhouse, the HOA’s insurance policy would be looked to for damage coverage. An HOA also sends out RFPs (requests for proposals) to potential vendors and coordinates the existing ones. These hiring options are presented to the board and voted on. When homeowners have issues with these vendors, they are told to contact the HOA.

Maintains Communications

Speaking of contact, an efficient HOA maintains ongoing communications with all the residents of its 55+ community. Transparency is crucial because these associations carry significant responsibility and manage a great deal of money.

The style of communication will be unique to the HOA and can include emails, newsletters, phone calls, and notices. Many HOAs include other useful information in their messages, like shuttle schedules, special event announcements, local news, and homeowner birthdays.

What Do HOA Dues Cover?

A white fence surrounding a garden.

Your HOA dues will typically cover maintenance and amenities, but you’ll want to read the CC&R for the details. Keep in mind that larger communities with big properties and resort-like amenities will have higher HOA fees—as the saying goes, you get what you pay for.

    • Exterior and Common Area Maintenance: For single-family and attached homes, the covered exterior maintenance might include painting, roof repairs, and windows. Some communities also provide lawn care. Common area maintenance refers to landscaping around condo buildings, repairing streetlights, and raking leaves in common areas. Some HOAs refer homeowners to contractors for tasks like power washing and chimney sweeping. And if a group of homeowners needs the same service, they may be able to get a group discount. Having contracted professionals to do this kind of work can really add to your curb appeal.
    • Trash Pickup & Snow Removal: Your HOA fees might also cover trash pickup and snow removal. With these services, you won’t need to pay a separate garbage collection contractor or have to shovel snow. The roads will also be plowed, although you might have to wait a while until the contractor gets to your street.
    • Recreational amenities: Active adult communities with clubhouses and other desirable amenities are generally associated with higher HOA dues. This makes sense because swimming pools must be cleaned, staff must be paid, and so forth. A state-of-the-art clubhouse might have a full gym, craft and activity rooms, a ballroom, and outdoor sports courts. These need to be constantly maintained and repaired when needed, and there are also energy and insurance bills that need to be paid.
    • Security: A gated 55+ community will have a guard, cameras, and a gate that needs to be maintained. Something like this is a must for many people searching for retirement communities.
    • Social activities: One of the other important benefits of an HOA comes when its members organize social activities like holiday parties, Zumba classes, technology discussion groups, and more. These also cost money, when space must be cleaned and set up, guest lecturers engaged, and food served.

How Much Do 55+ Communities Charge for HOA Dues?

A calculator beside wooden houses and a stack of coins.

Anyone who has never paid HOA fees might balk at the need to pay quarterly, bi-monthly, and/or monthly dues. After all, it’s an added charge to the monthly mortgage payment. But when you realize that you won’t be paying separate charges for exterior home repairs and other services, you might end up paying less overall. And more importantly, you’ll have more freedom to play pickleball, spend time with your grandchildren, or go on a weekend getaway without having to worry.

When researching potential 55+ communities you may have to be persistent to get the HOA fee information. Some of the communities with homes for sale on share the details, but others do not. You can call sales centers and ask when you are touring the properties. In larger communities that have different-sized homes, the HOA fees might vary according to size. And if the community has a golf course there could be separate charges for that too.

Some CC&Rs also allow residents to do their own landscaping and offer the option of paying extra fees in the dues. And besides that, the dues don’t stay the same, year after year. In these cases, it makes sense to learn about the fees in person, when you’re visiting the neighborhood.

Do HOA Fees Increase?

Small houses on stacks of coins with a green background.

Yes, HOA fees increase to reflect inflation and higher maintenance and operations expenses. This is based on a yearly budget and determined by board members—another important reason to attend those meetings. An HOA is also obligated to maintain, operate, and repair common areas like entrance gates, social halls, and streets.

When unexpected large expenses come up, the reserve funds get depleted. When that happens, a special assessment may be completed to draw in funds from residents to make up for the deficit. This would be in addition to any yearly reserve increases based on higher costs for services.

You can expect HOA fees to increase annually once the next year’s budget is determined. Homeowners might become frustrated when high assessments are levied, and that’s to be expected. An effective HOA will keep residents in the loop and let them know when budget meetings are scheduled and the possibility of higher fees. A brand-new clubhouse might seem very appealing, but its costs and benefits will be discussed and voted on before decisions are made.

Also, remember that community members who live in larger homes pay higher HOA fees. Fortunately, all homeowners have the right to vote and participate in their associations, and oftentimes a brainstorming session can produce cost-effective solutions for everyone.

How Much HOA Fee is Too Much?

A mature couple with a digital tablet looking over their HOA fees.

Location is another determining factor in HOA fees, so you can expect to pay more in highly-populated and popular retirement destinations. Some of these include the New York City area (including North Jersey), Honolulu, the San Francisco Bay area, and the San Jose area. An HOA might sponsor events to help defray community costs, but the bulk of its income comes from the homeowners.

Home seekers who are comparing active adult neighborhoods will want to compare the different HOA fees and can ask to see the community’s fee history. This way, you can determine if one seems excessive and get a feel for how the dues might increase in the future. HOAs often work with third-party companies that project future expenses based on past and current needs. Make sure to ask about the reserve fund too.

In most cases, an HOA will start planning its budget towards the end of the year and will consider costs for expected:

  • Insurance

  • Repairs and maintenance

  • Reserve fund

  • Staff salaries

  • Utilities

  • Vendor services

After the yearly budget is established, the board will calculate any miscellaneous income coming in and look at the existing reserve fund. The new dues will then be calculated, based on how many property owners live in the development. An assessment might be factored into the dues or done separately. Each owner’s total will then be divided up into monthly, bi-monthly, or quarterly payments. When reserve funds cannot cover expenses, additional assessments may be levied.

Just like property taxes, you still must pay HOA dues after a home is paid off. HOA fees can be included as part of your housing costs (along with taxes, homeowners insurance, and your mortgage) and be part of a monthly budget.

As a guideline, housing costs should not exceed 30% of your monthly income. If a 55+ community’s HOA fees push you over 30%, you might want to keep shopping around for a less costly home. You need to have enough money left at the end of each month to pay your other bills and enjoy the standard of living that you deserve.

There’s no immediate way to tell if an HOA is overcharging homeowners, but staying informed and understanding that certain residents pay higher dues (larger house size, more landscaping services) can help. The budget and HOA bylaws are public information, and you can request copies of both.

What If the Community Has an HOA Management Provider?

A row of miniature houses on a reflective desk.

Many active adult communities don’t have enough residents to run their HOAs, so they contract outside HOA management companies. These entities charge set fees for the services they provide, and that amount gets added to yearly budgets.

An HOA manager is usually assigned, and that person acts as the liaison between the homeowners and the management company. The manager usually assists with the board’s daily operations too.

An HOA management company may charge a start-up fee since more time will be devoted in the beginning to get things situated. The company will need to analyze the property’s current and projected operational costs and set up its management system. These initiation fees can range from several thousand dollars up to more than $30,000, as a one-time fee. Ongoing management fees are generally charged every month after they are negotiated.

The monthly fees also depend on the size and location of the community and might be around $20 per unit per month. And if the relationship with the HOA management company ends, there will probably be an exit fee unless they did it on their own accord.

Heading and participating in an HOA requires a lot of time and skills that homeowners might not have. When these companies are hired though, it is best to have a resident oversight committee. It’s vital to have someone responsible for checking the fees and ensuring that the HOA is performing its duties according to the CC&R.

An HOA Can Increase Your Property Value

A heart between wooden model houses on grass and green background.

The benefits of an HOA are considerable, and homeowners rely on them for essential services. It’s about more than that though, because HOAs increase property values.

Communities that don’t have managing associations lack the oversight and organization to administer maintenance and other services. Homebuyers are drawn to curb appeal and appreciate a well-cared-for lawn and home exteriors that aren’t falling apart.

In active adult neighborhoods, potential buyers will also evaluate the clubhouse and other amenities. They won’t be drawn to a facility that has seen better days or a tennis court that needs serious resurfacing.

It goes without saying that some HOAs perform better than others. Being involved can take some time away from your leisure activities, but it’s worth the effort because your voice will count. The first steps are to become familiar with the CC&R and to attend meetings. If an outside management company is used, you may still have opportunities to participate.

Start Your Homebuying Journey With 55places

A 55+ community with an HOA could be the best choice for a rewarding retirement, and 55places can help find the right community with the right HOA for you. Contact 55places to find your perfect 55+ community.

Can you spot the $207,744 difference between these identical homes?

Financing is the difference!

Get the details in The 62+ Loan Homebuyers Guide.

55places Mortgage is a joint venture between Mutual of Omaha Mortgage and
Details here.

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Call us to speak with a customer service representative.

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I agree that 55places and its affiliates, partner providers or agents may call, text, or email me about my inquiry, which may be made with automated means. I understand that my consent is not a prerequisite for buying a property. I may revoke my consent at any time by contacting Message/data rates may apply. I also agree to’s Privacy Policy and Terms of Use.

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