What is an HOA?

A residential community may have an HOA or Home Owners Association.  The HOA organization is meant to provide a cohesive, unified community. 

Here in New England, we associate condominium complexes with a Home Owners Association. 

But HOA's aren't only reserved for condominium complexes.  In recent years, we have seen neighborhood communities pop up that has a Home Owners Association like Persimmon Woods in Haverhill MA or Seacoast Village in Ipswich.

What Is an HOA?

An HOA or Home Owners Association is a group of owners who have a common interest in a community.  The HOA governs and maintains the community. 

As pointed out most people associate an HOA with a condominium complex but it can also be associated with a neighborhood of single-family homes. 

Home Owner Associations usually try to provide a consistent unified look to their community, provide peaceful enjoyment for all and maintain the common areas of the community. 

A Homeowners Association is created by a Declaration of Trust.  The declaration of trust spells out the management of the community, the bylaws, and the rules and regulations. 

Usually, your Homeowners Association is run by an HOA board consisting of elected board members made up of the communities homeowners.  Your board has a vested interest in making your community thrive.  The HOA board runs the daily operation of the community.

The needs of a community can vary greatly, but here are some of the common things a Homeowner Association oversees:

  • Collection of membership fees or dues
  • Maintenance of the community areas
  • Setting and managing budgets and assessments
  • Enacting rules and regulations
  • Enforcing the rules and regulations

7 Common Questions About HOA's

When learning about what an HOA is and understanding what it is like to live in an HOA governed community there are some common questions that will arise.

Is Membership to An HOA Mandatory?

Yes, when you are purchasing a home or condominium, there is a covenant in the deed where you are agreeing to the terms of membership in the HOA.  It is not optional. 

By buying a home in a community governed by an HOA you have also agreed to be a member of the HOA as well as follow all the rules and regulations as well as pay any required fees to the Home Owners Association.

Are HOA's Non-Profit?

By default, most Home Owner Associations are non-profit and are governed by the members in non-paid positions. 

Financially an HOA's purpose is to maintain the community not make a profit. The benefit is maintaining a community and no one person benefits from the HOA.

Do I Have To Pay Fee's To Be A Member Of An HOA?

With membership in an HOA comes fee's and special assessments. Most commonly you will hear people reference condo fees.  Or in a single-family neighborhood, they will be called HOA fees.

These are HOA fees that go towards the management and maintenance of the community. 

Can An HOA Raise Its Fees?

An association can raise its fees as it deems necessary. How and when a board can raise condo fees or impose special assessments is spelled out in the bylaws.  Small increases could just happen larger ones would be voted on.

Remember your fees cover a budget and it costs money to maintain your community.  Costs to maintain a community rise with inflation and so will your condo fees at some point.

Are There Rules To Be Followed?

Being a member of a Home Owners Association also means there are rules to be followed.  The rules and regulations can vary greatly based on the needs of the communities.  Some of the rules can be:

  • How to maintain your property
  • Quiet hours
  • Restriction of commercial vehicles
  • Pet restrictions
  • Parking
  • Use of common areas
  • Etc...

While at times the rules of an HOA may seem cumbersome they are put in place to create cohesiveness to the community as well as to provide peaceful enjoyment for all the members.

And yes, by buying a condo or in a neighborhood governed by an HOA you are automatically agreeing to the rules and they must be followed.

How Is An HOA Governed?

The governing of a Home Owners Association can vary but in general, a Board of Trustees is elected by the general membership to run the day to day operations of the association.  You do have a say in who you elect and how things are run often through a vote on larger issues.

The running of the HOA is spelled out in the Bylaws in the Declaration of Trust that is recorded at the formation of the HOA.  The Declaration of Trust is usually very detailed in how the Board is to run the HOA including how they spend money, how decisions are made and the voting rights of the members.

Can An HOA Enforce Its Rules And Regulations?

For the most part, an HOA can enforce its rules and regulations.  By buying into an HOA governed community you are agreeing to the terms of being a member.

Be aware that violating the terms of membership can include fines and legal actions against you. 

But on the reverse side, if one of your neighbors is violating the rules the HOA is legally obligated to take action as well.  It goes both ways.

what is an hoa and how to live in an hoa community

Living In A Community With A Home Owners Association

Buying a home and living in a community governed by a homeowners association can be a double-edged sword.  It may not be for everyone.

Many things may be taken care of for you in a large community.  Condominium HOA's often provide landscaping, snow removal, exterior maintenance, etc... things you no longer have to worry about.

But realize things are done a certain way, it may not be how you would do it, it may not be in the time frame you would like it done in.  You lose some control.

The first step to living in an HOA run community is to understand what you are getting into before you purchase.  Review the declaration of trust, master deed, bylaws and the rules and regulations.  Have a basic understanding of how the governing of your HOA will work and what rules you are expected to adhere to. 

Do a little research and find out if the members are generally happy and if things are running smoothly.  Homeowner Associations can be undermanaged or overmanaged, neither is a good thing.

Every Home Owners Association can be drastically different.  Don't assume anything.  Review the documents.

If you do become a member of a Homeowners Association, become involved.  At least know what is going on at the meetings and with the budgets.  Better yet consider becoming a board member and being actively involved in the day-to-day operations.

5 Tips For Living In An HOA Community

  • Know the rules of the community.
  • Be a good neighbor and abide by the rules.
  • Know what is going on with the association by reading newsletters and attending meetings.
  • Participate in HOA meetings and consider becoming a board member.
  • Take advantage of what your community has to offer.

At the end of the day, the HOA is meant to provide a cohesive community, provide maintenance of all common areas and provide peaceful enjoyment to all of its residents.  That is generally not a bad thing.  A well-run community adds value to the homes within the community.

At the end of the day, it is a personal decision if you want to buy a home run by a Homeowners Association.

Other Real Estate Resources:

Are you a condominium buyer?  What do you need to know when buying a condo?  Bill Gassett provides tips for condominium buyers. One big tip is to read the documents and know what you are getting into by belonging to an HOA.

Purchasing a condo is a little different than a single-family home.  There are additional layers to look into like the HOA management and condo fees and what do those fees cover?  Jeff Nelson provides some great questions to ask when purchasing a condo.

Paul Sian covers some of the pros and cons of buying and owning a condominium.  Much of the exterior maintenance can be taken care of for you, but you also lose some control.  Is condo ownership right for you?

 

What Is An Home Owners Association? was provided by Kevin Vitali a Massachusetts REALTOR with many years of experience helping home buyers and home sellers achieve their housing goals. If you are thinking of buying or selling a home call Kevin at 978-360-0422.