A homeowners' association (HOA) is usually a not-for-profit organization established by a community that governs rules regarding what can and cannot occur in homes, and also determines the rules and money spent on shared property. Many condominium and townhouses available for purchase are part of such an association. As well, many new developments of single-family homes establish one to protect the rights of all in the community.
Those who own property in the established area govern the homeowners' association. Often, the greatest influence in condo complexes is held by a company that owns and rents several properties within the complex. When a person buys a home in an area with an HOA, he or she becomes a member of the group and is responsible for membership dues. Many HOAs do have fairly large membership fees, so the decision to purchase a house or condo belonging to one should be considered from a financial point of view. Adding such a high fee may be prohibitive.
The first act of a homeowners' association is to establish a set of covenants, conditions and restrictions (CC&R). The CC&R establishes monthly dues for all homeowners, and can restrict how a person can use his or her own property or joint property. For example, a CC&R may have rules governing the number of people who can occupy a house, the colors an owner can paint a house, or the times at which common areas like exercise rooms or pools can be used.
The CC&R has the goal of making the property pleasant for all residents, but potential purchasers should definitely speak with a few other homeowners prior to purchasing a house that comes with HOA membership. Some CC&Rs are more wish fulfillment than reality, and others are almost totalitarian in their control over an owner’s behavior.
One issue that seems to be of frequent issue in a homeowners' association is maintenance of joint property. Some HOAs are excellent at providing things like gardening, outside repair, or pool upkeep. Others state in their CC&Rs that these things will be provided, but they are not done so in an acceptable or timely manner. In these cases, the member has little legal redress, unless the whole HOA can organize to change the rules. This can be difficult to achieve in large communities.
The homeowners' association may also cause difficulty for owners or renters if they do not strictly follow the CC&R. It can assess fines, fees, or even evict those who do not abide by the rules, even if the infractions are minor. Renters in particular must be careful to understand the guidelines, since a clear understanding with the landlord should be established regarding the rights and responsibilities of the tenant in regards to the rules.
A successful HOA gives property owners a way to solve minor disputes, as well as to organize repair or maintenance of shared property. Many find them to be well worth the extra fees associated with owning a property. When well administrated, one can provide a certain predictability in owning a home, and clearly delineate both the homeowner’s and the association’s responsibilities.