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HOA 101: What Are the Pros and Cons of an HOA?

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Living in a homeowners’ association (HOA) community is an increasingly popular choice for many people in North America. HOAs can help residents feel more ownership, connection, and pride in their neighborhoods with shared spaces, amenities, and standards that keep the community looking and functioning at its best. However, some potential homebuyers may have hesitations about HOAs.

If you’re considering moving to a managed community, it’s essential to explore HOA pros and cons before buying your home. Read on to learn more about HOAs, the biggest benefits of an HOA, and what other residents may find challenging.

What is an HOA?

An HOA is a non-profit organization made up of homeowners living in a managed community. When people buy a home with an HOA, they automatically become members of the association and have access to all the HOA’s perks. They pay dues to help the association maintain facilities and fund other necessary projects. The members of the HOA elect a volunteer board of directors to run the association and act on behalf of homeowners.

What does an HOA do?

An HOA aims to improve community living for all residents. The primary responsibilities of an HOA are to:

  • Serve community interests. An HOA should listen to the needs and wants of its homeowners and support those interests. Associations regularly hold meetings and provide communication methods that allow residents to share their thoughts and shape HOA goals.
  • Create and enforce rules. Another key task for HOAs is to create rules and standards that ultimately enhance the neighborhood’s value and residents’ quality of living. Every HOA will have governing documents that include Articles of Incorporation, Rules and Regulations, Bylaws, and Covenants, Conditions, and Restrictions (CC&Rs) that detail these rules.
  • Manage funding and spending. HOAs collect dues from homeowners for repairs, improvements, and other community projects. The HOA board oversees the annual budgeting and spending of these funds.
  • Establish HOA expectations. An HOA must establish and share expectations with homeowners. People within the community should know what to expect from the HOA and how they can participate and benefit from being a member of the association.

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What are the pros of an HOA?

More and more people are recognizing the perks of an HOA. In fact, about 29 percent of Americans live in community associations. Here are the most significant benefits of a homeowners association

  • Stable property values. One of the biggest advantages of an HOA is consistent property values. HOAs have rules and standards designed to keep curb appeal high, homes well-maintained, and the neighborhood safe. This translates to better property values in the long run.
  • Sense of community. Being part of an HOA can boost homeowners’ pride and engagement. With common goals and shared activities, it’s easy to connect with residents and create lasting bonds with neighbors.
  • Convenient amenities. HOAs generally offer private amenities for residents, including pools, fitness centers, clubhouses, walking paths, playgrounds, and picnic areas. These amenities let homeowners enjoy the things they love right from their front door.
  • Neighborhood safety. Many HOAs have gated entry, restricted access to amenities, and rules for houseguests and gatherings in shared areas, which enhance community security and help homeowners feel safe.
  • Conflict resolution. HOAs have best practices in place to mediate and resolve disputes that may arise between homeowners. This helps morale stay high and prevents issues from escalating.
  • Enforced community standards. While some neighborhoods may have unofficial guidelines or suggestions for residents, HOAs can enforce the rules of their communities. If homeowners don’t adhere to the standards of compliance, they typically receive a notice or may pay a fine.

Are your community’s rules effective? Read our ebook, “Is It A Good HOA Rule?” to learn five questions every board needs to ask before passing new rules, regulations, and policies.

What are the cons of an HOA?

While there are many benefits of a homeowners association, they may not be for everyone. Here are ways homeowners may struggle with community association living.

  • HOA rules. Although HOA rules exist to protect the community’s integrity, improve the quality of life, and keep residents safe, some people may find them to be restrictive. Always ask for and read the rules of an HOA before signing on the dotted line to confirm they align with your lifestyle and preferences.
  • HOA dues and fees. Regular fees and assessments are part of living in an HOA. The HOA collects regular dues and fees to fund the association’s operations and maintain the community. However, some residents may feel their money isn’t being used wisely—especially if the HOA board fails to communicate budgeting goals and successes. Understand your financial responsibility, the assessment schedules and frequency, and fee and fine amounts to avoid surprise charges.
  • HOA mismanagement. It’s possible for HOAs to fall under poor leadership, which means the association isn’t living up to its full potential. To find a well-managed neighborhood, look for communities with engaged homeowners actively participating in association affairs—they’re more likely to hold their leaders accountable. You can also search for a community partnered with a professional management company. With professional management, you can be assured that the association has the guidance and support needed to function at its highest level.

A Beginner's Guide to HOAs

From stable property values and convenient amenities to increased safety, there are many benefits of an HOA. With ample benefits of HOA living, people are more open to these communities when looking for their next home. To help you understand the basics of HOAs, check out our FREE guide, “A Beginner's Guide to HOAs.” The guide outlines how an association functions, key leadership roles, common HOA terms, and much more.