What you need to know about homeowners’ associations


A row of suburban houses

HOAs protect property values and provide amenities, but they’re not for everyone. Only you can decide if one is right for you.

How do you feel about homeowners’ associations (HOAs)?

  1. I love HOAs; they protect my property value and quality of life.
  2. I hate them! Too many rules, and they cost too much.
  3. I’m not sure what an HOA is.

Living in a community with an HOA is a delight for many and a frustration for others. If you’ve never been part of an HOA, this article will help you get up to speed on how they work.

The pros of HOAs

Many homebuyers like the assurances that come with being part of a homeowners’ association, because they are designed to maintain property values and quality of life.

Common elements managed by an HOA can be as simple as roads, parking areas and lawns, or as elaborate as pools, trails and clubhouses.

Each homeowner pays monthly or annual dues to maintain the common elements and cover liability insurance.

The cons of HOAs

HOA bylaws govern many homeowner decisions and behaviors. Typically, any exterior changes to a home have to be approved. Regulations on parking, renting and activities like bird feeding can affect how you use your home. Pretty much anything your neighbors can see or hear may be subject to HOA rules.

You can’t opt out. As a member of the HOA, you are bound to follow the rules. If you don’t, the HOA can impose fines. In some cases, unpaid fines can result in legal action, including liens and foreclosures.

Know the bylaws

Before you buy a home with an HOA, request a copy of the bylaws, CCRs (covenants, conditions and restrictions), and any other rules the association has in place. Read all documents from beginning to end. Then decide if you wish to abide by them. If they seem overly restrictive, look for a home in a different neighborhood.

Be prepared for changes in dues

Dues are subject to change depending on the age of common elements, lawsuits and insurance claims. Ask a board member if the HOA is planning an increase in dues and how much money is in reserve. Factor the answers into your budgeting.

Ask residents about their experience

Talk to residents to get an idea of what it’s like to live there. Ask if rules are enforced with an even hand. Inquire if the board functions well. Find out if a property manager is involved in the daily operation of the community.

The best time to learn about an HOA is before you buy. Reading the documents and talking to board members and residents will give you solid information to base your decision on.

Consumers helps more than 1,000 members finance land, homes and home improvement projects each year. When you need a mortgage or home equity line of credit, call us at 800-991-2221. We’re here to help you get the home of your dreams!

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