About a quarter of all homes in the United States are covered by a homeowners association (HOA). Over the last forty years, more than 300,000 communities have adopted an HOA, especially new housing developments and gated communities, as well as existing subdivisions and neighborhoods. Because most people are likely to eventually live in or near a neighborhood that has a homeowners association, understanding what these organizations are and what they do for a community is vital, especially if you are in the market for a new home.
What Is a Homeowners Association?
In short, this is an organization made up of people who own homes in a subdivision, development, or defined neighborhood. These associations are sometimes organized by the builder, who decides on rules that the owners have to follow, in order to live in one of those homes. In return for following those rules and for paying HOA dues, which can range from $100-$1000 a month, residents in these areas get nicer homes at lower costs and usually get a number of additional services, like gardening or maintenance.
The main benefit of living in a neighborhood that has an HOA is the ability to buy a home at a lower cost than you might be able to buy in a neighboring area. The lots are often smaller and the HOA fees make this a great deal for builders.
Even if the HOA was not organized by the builder, those fees still go towards making the neighborhood nicer, ranging from hiring a communal gardener who tends the yards of all houses in the HOA, to private clubs and pools built in the neighborhood and used just by members of the HOA.
There are some downsides that come along with HOA. In some subdivisions, you have to join the HOA in order to buy a home there, even if you would be willing to buy the house at a higher price in order to not have to join the HOA.
These associations usually have rules about what colors you can paint your house, the upkeep of your yard, what you are allowed to store in your yard, and more. They may even restrict whether or not you are allowed to have a pet or satellite television, which can make these associations sort of like having a landlord, even though you own the house you live in.