What You Need To Know About HOA’s

October 31, 2019

Buying a home? There’s a good chance you may end up finding your dream home within a community association, or HOA. Here’s what you need to know!

According to the Foundation for Community Association Research, approximately 25% to 27% of the U.S. population lives in a community association.

These associations are generally tasked with maintaining and repairing the common property of a building or community. They do this by charging fees or dues and possible assessments to perform necessary repairs.

Of course, not all HOAs are created equal. Some are well-run and well-funded by a competent board and savvy management company. Others can be plagued with infighting, costly unplanned repairs or nosy busybodies.

In other words, buying a house within a homeowners association comes with pros and cons, and it’s important to understand what you’re getting into before you sign a contract to purchase.

Here are some of the pros and cons of an HOA.


Amenities: Many neighborhoods with homeowner associations come with community amenities, such as pools, tennis courts, playgrounds or fitness centers that members in good standing can use. This can save you money on gym memberships, as well as providing space for your family and friend gatherings.

Maintenance: One major benefit of HOAs is that they take care of the common grounds. That can be landscaping, roads and other common areas. They are also responsible for getting necessary insurance for community areas like pools and playgrounds. Some HOA even include maintaining the front yards of homes in the community.

Part of your dues goes to paying monthly expenses, while the remaining funds go into a reserve pool for bigger repairs or replacements down the road. Your HOA dues may also cover costs you would otherwise pay for yourself if you didn’t live in an HOA, such as utilities, water and trash.

No matter what your dues cover, it’s important to pay them on time. If you get behind without setting up a payment plan, the HOA can foreclose on your property.

Ownership: If you’re unhappy with how your HOA is being run, you can always run for the board and help set the agenda for your neighborhood. In that sense, you’re taking ownership of your community.

Cons of HOAs

Dues: HOA dues, which can be charged monthly or yearly, increase the cost of living in a neighborhood or condo. In some neighborhoods, the fees can be up to $3000 per year. Overall, though, HOA fees are typically in the low hundreds of dollars.

Assessments: If the HOA doesn’t have deep reserves and an unexpected but immediate repair comes up, all homeowners in the association may be charged a one-time assessment to cover the cost of the repair. Depending on the expense, this could take you and your wallet by surprise.

Rules: Another drawback is the rules that the association sets for the common facilities as well as factors affecting your home and habits such as proper garbage can etiquette and approved paint colors or roof tiles, especially if you’re in a designated historic district.

If you want to renovate your home or build a fence, you may need to submit your plans for approval by the HOA before proceeding. These rules, in general, are put in place for everyone’s best interest (they keep your neighbor from putting up an eyesore beside your property), but some associations can become sticklers with rule enforcement.

What to look for in an HOA

Before buying into an HOA, do your due diligence! That includes carefully looking over the HOA’s covenants, conditions, and restrictions.

You should also take a look at the HOA’s finances to see if it has a healthy reserves fund for emergencies. Some loans can be denied if the HOA does not have the proper amount of reserves, check with your loan officer. Ask for the minutes from past annual meetings.

You should also ask those who live in the neighborhood about the HOA and how it’s run.

Bottom line: An HOA isn’t a bad thing, you just want to make sure you fully understand the pros and cons, as well as the rule and restrictions of the HOA you’re preparing to join!

What are your experiences with an HOA?  Feel free to comment!

Clay & Tammy Ritter

(910) 547-7184 / clay@clayritter.com