Understanding The Differences Between HOA, COA, And POA Homeowners Communities
DALLAS — August 14, 2023 — Associa, the community management industry’s largest company, wants to help homeowners better understand the differences between a Homeowners Association (HOA), Condominium Owners Association (COA), and Property Owners Association (POA). Each plays a key role in maintaining quality of life and property values of a community. Yet, all differ in organization, operation, purpose, and how they benefit neighborhoods.
Homeowners' Association (HOA)
The purpose of an HOA is to manage a collection of homes. Created for individuals who own homes, they typically govern planned developments with single-family homes. HOAs first came to prominence as subdivisions expanded during the post-World War II building boom. They are non-profit organizations tasked with maintaining communitywide standards, including home design, upkeep, land use, and other criteria that affect the neighborhood. The guidelines of an HOA exist to ensure that everyone's property values are protected.
Homeowners in an HOA are generally required to be members and pay dues. These dues cover the upkeep of common areas and amenities, including insurance and other shared costs for the community. A portion of the funds is usually set aside for reserves or future projects.
A board of directors oversees the operations of an HOA. Board members are volunteers who enforce governing documents, manage financial aspects, and maintain common areas. In addition to acting as a community rule book, an association's governing documents also detail board tasks, powers, and duties. While association residents elect board members, their responsibilities are unique to their individual HOA, with each community operating differently.
Condominium Owners’ Association (COA)
Although similar to an HOA, a COA is solely comprised of condominiums. HOA residents own their property, but the association owns and maintains common areas (pools, clubhouses, gyms) shared by multiple units. COA owners own their individual units and a percentage of all shared property (tennis courts, sidewalks, parking lots). While the COA doesn’t own anything, it ensures that common areas are maintained. Residents are typically still responsible for maintaining the components that serve their individual units (pipes, windows, appliances, HVAC).
Other than the ownership structure, COAs and HOAs are very similar. Much like an HOA, an elected board of volunteers operates the COA on behalf of all owners. Both are non-profit corporations with documents that govern the day-to-day operations and funding. Condominium owners are automatically COA members and are required to pay dues that cover general maintenance and services for common elements, including parking, roofs, stairwells, and elevators. These dues will often cover utilities like water, electricity, sewage, and garbage removal. Unit owners sometimes pay a prorated amount based on their percentage of ownership.
Property Owners’ Association (POA)
Ranging from residential and commercial buildings to open spaces, businesses, and even entire towns, POAs govern large areas that can encompass HOAs and COAs. POAs are typically treated as advocacy organizations with very limited enforcement power or authority. They are formed to help encourage development in an area – or conversely – protect the undeveloped nature of a community. POAs influence local policy and commerce, drive real estate, and facilitate business licensing and zoning rules, as well as neighborhood projects and events.
POAs are typically comprised of business owners, property managers, developers, and investors who have a personal interest in improving the community. They operate to boost interest in the area but do not require an elected board of directors. POAs may offer local educational opportunities or networking events to enhance the community, but rarely have many regulations, cannot issue fines, and do not own common areas.
POA membership is not always mandatory, but members may enjoy an additional say in the community. While their members may have to pay a modest annual fee to support community efforts, POA funds are often donated.
About Associa
With more than 275 branch offices across North America, Associa is building the future of community for more than 6.5 million residents worldwide. Our 14,000+ team members lead the industry with unrivaled education, expertise, and trailblazing innovation. For more than 44 years, Associa has brought positive impact and meaningful value to communities. To learn more, visit www.associaonline.com.
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