Last updated: April 08, 2024

Home Ownership

What you should know about HOAs

Man with his children coloring a picture in their new house that has a HOA

In many cases when builders develop a piece of land into multiple homes for sale, they set up an association with rules and regulations that residents must follow.

In return, buyers may purchase homes at affordable prices and receive access to amenities or promised upkeep of certain areas while paying for only a fraction of the infrastructure costs via their homeowner’s association dues. 

What is an HOA?

A homeowner’s association (HOA) is an organization formed within a planned community or residential subdivision. Its purpose is to establish rules and regulations that all homeowners in the community must abide by. The association is typically managed by a board of directors, consisting of elected members from the community. 

Once the new development of single-family homes, townhouses or condos is complete, the association nominates and votes for homeowners as board members. The board is responsible for ongoing management of the association, including creating new rules, collecting payment of dues, and maintaining common areas. HOA monthly fees vary depending on where a community is located and the amount of services that are covered by that cost.

Some communities establish an association after the fact – these are called optional HOAs because membership is not required. 

How does an HOA work?

When you purchase a property within an HOA, you automatically become a member and are required to pay regular fees known as HOA dues. These fees contribute to the maintenance and management of the community, including services such as landscaping, trash collection, and common area upkeep.

Additionally, the HOA board of directors may make decisions on behalf of the community, which could involve approving architectural changes, resolving disputes, and enforcing rules.

What does an HOA do?

The main goal of a homeowner’s association is to promote harmony and preserve property values within the community. To achieve this, HOAs typically establish a set of rules and restrictions known as CC&Rs (Covenants, Conditions, and Restrictions).

These CC&Rs could potentially relate to various aspects of homeownership such as acceptable exterior paint colors, landscaping requirements, pet regulations, noise restrictions, and even guidelines on parking and storage.

Example of HOA rules

While HOA rules may vary from one community to another, here are some common examples to give you an idea of what they may apply to:

  1. Exterior modifications: Some HOAs regulate the changes homeowners can make to the exterior of their properties, including the addition of structures like sheds, fences, or swimming pools.
  2. Pet policies: HOAs may have guidelines regarding pet ownership, including breed restrictions, leash requirements, and rules on the number of pets allowed per household.
  3. Noise restrictions: HOAs may implement quiet hours to ensure a peaceful living environment for all residents.
  4. Parking regulations: HOAs may have guidelines regarding where residents can park, whether on-street or in designated spots, in an effort to maintain order and prevent overcrowding.

How do HOAs enforce rules?

HOAs may sometimes seem like enforcers of quirky rules, but they play an impactful role in creating and maintaining thriving communities. Here is a list of actions an HOA might take against homeowners that aren’t following the community rulebook:

  1. Friendly warnings: When an HOA believes a rule violation has occurred, the first step is typically to send a friendly warning meant to bring a homeowner’s attention to the issue. These written requests let someone know what rules may have been broken and provide an opportunity to fix the situation without any major repercussions.
  2. Fines: If the friendly warning goes unnoticed or repeated violations occur, the HOA might resort to taking action that’s bit more serious – fines. But don’t worry, their goal is not to empty your wallet. The point of fines is to encourage compliance with the established rules. Think of them as a gentle nudge meant to remind homeowners to maintain the community’s aesthetic appeal and stick to the guidelines for creating a pleasant atmosphere for everyone who lives there.
  3. Legal action: Sometimes, despite all efforts to resolve rule violations, the HOA may need to turn to legal options as a last resort. This may happen if repeated or serious violations persist. Legal action might involve seeking court orders to enforce compliance or even placing liens on properties for non-compliance. However, this is generally the exception rather than the rule. HOAs typically prefer to maintain peace and harmony than engage in courtroom showdowns.

HOAs don’t have a free-for-all opportunity when it comes to enforcing their rules. They must also play by the rules that are set for them by state and federal laws. Any HOA rule that contradicts state or federal laws doesn’t tend to hold up. For example, an HOA isn’t allowed to discriminate against someone based on race, religion, disability status, or other protected characteristics. So, rest assured that while HOAs have their say, they still need to play by the rules themselves.

Buying a home with an HOA

If you are considering buying a home with an HOA, make sure to conduct due diligence. Ask for a walk-through of the property, especially the common areas. Read the CC&R to identify any potential limitations and consider consulting with an attorney to make sure you understand the provisions. Meeting the neighbors to get their opinions of the association may also yield helpful information about what it’s like to live in the community. Once you decide to buy a home, you will be expected to follow any applicable HOA rules and pay regular dues as a member of the association.

Take the time to compare one association with others in the area. While buying a home is often a deeply personal experience, you should try to treat it like a business decision. Make sure the investment you are making is worthwhile and seems likely to grow over time. Be sure to factor monthly HOA dues into your budgeting and financial planning.

Advantages of living in an HOA community

  1. Amenities: Many HOA communities offer access to amenities such as pools, gyms, parks, and community centers, providing residents with recreational opportunities.
  2. Maintenance and upkeep: HOAs typically take the responsibility of maintaining shared spaces to keep the community looking well-groomed and enjoyable.
  3. Dispute resolution: Should conflict arise between neighbors, the HOA may step in to mediate and help find a resolution to reduce potential disputes.
  4. Enhanced property values: HOAs typically have strict guidelines that maintain the overall appearance and quality of the community, which may protect and potentially increase property values for homeowners.

Disadvantages of an HOA

  1. Fees and fines: HOA dues can be an added expense that homeowners must budget for and may potentially increase over time. The HOA may also issue fines over perceived rule violations that homeowners should be prepared to pay or contest.
  2. Loss of autonomy: Living in an HOA means following the rules and restrictions set forth by the community, limiting some degree of freedom in your personal choices regarding your property.
  3. Potential conflict: The enforcement of rules can sometimes lead to disagreements or conflicts between residents and the HOA board.
  4. Limited flexibility: HOAs often have guidelines that restrict certain activities, such as running a business from your home or making modifications to the exterior of your home.


1. Can I opt-out of an HOA?

Generally, if you purchase a property within an HOA community, membership is mandatory.

2. How much are HOA fees?

HOA fees vary depending on the community and the services provided. Consult with a real estate professional or contact an HOA board of directors to learn about fees that apply to the neighborhood where you’re looking to purchase a home.

3. Can an HOA foreclose on my property?

In extreme cases of non-payment or non-compliance, an HOA may file a lien and potentially foreclose on a property.

While living in an HOA presents both benefits and potential drawbacks, it’s very important to consider your personal preferences and lifestyle before deciding to live in such a community. Remember, understanding the rules and regulations of an HOA before purchasing a property might be what ultimately helps you to decide on the neighborhood and community that’s right for you.

Please note: Discover Home Loans offers home equity loans and mortgage refinance opportunities, but does not offer purchase mortgages. 

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