If you’re shopping for a new house, you’re likely to come across at least a few properties that are part of a homeowner’s association, or HOA. Over 75.5 million homes across the country are governed by them, according to the National Association of Realtors.1
Of course, amenities like swimming pools or club houses can make it tempting to gloss over the realities of living under an HOA – but it’s important that you don’t.
For one thing, there’s the money. HOAs assess fees that help maintain common areas and cover community services, so knowing the size of the fee (and what it covers) can help you decide if you want to live in the community, or whether you can afford to.
It’s also important to understand the HOA rules, which you have to abide by if you purchase a home there. Association regulations are designed to protect property values, but they can touch on anything from making improvements to your home to where you park your car. CAI suggests looking into rules about pets, flags, outside antennas, clotheslines, satellite dishes, fences, patios and home businesses before you buy.2
There are also other aspects of an HOA to consider. Here are some pros and cons of community living to help you decide if it’s right for you:
What is a Homeowner’s Association (HOA)?
A homeowner’s association (HOA) is a legal entity that governs a residential community and enforces rules and regulations for properties within that community. HOAs are typically established by real estate developers when creating planned communities, condominiums, or subdivisions. Once you purchase a home in an HOA community, you automatically become a member and are required to pay regular fees and follow the association’s rules. These organizations are run by elected boards of residents who make decisions about community policies, budgets, and maintenance. HOAs have the legal authority to enforce their rules through fines, liens, and in extreme cases, foreclosure.
How common are HOAs?
HOAs are extremely common in the United States, governing over approximately 40 million homes across the country according to recent data.3 This represents a significant portion of American housing, and the trend is growing rapidly. The popularity of HOAs stems from several factors: developers find them useful for maintaining property values and creating cohesive communities, buyers are often attracted to the amenities and maintained appearance of HOA communities, and local governments sometimes encourage HOAs as they can reduce municipal responsibilities for certain services. In some markets, particularly in newer developments and certain regions like Florida, California, and Texas, finding a home that isn’t part of an HOA can be challenging. The growth has been particularly pronounced since the 1970s, with HOA communities becoming the standard in many suburban developments.4
Pros of being part of an HOA
Living in an HOA community can offer several significant advantages that many homeowners find valuable. These benefits often center around enhanced amenities, reduced individual responsibilities, property value protection, community services, and added security measures. Here are the key advantages:
- Access to amenities you might not otherwise afford
- Reduced maintenance responsibilities
- Help maintaining your home’s value
- Built-in conflict resolution services
- Enhanced community security
HOAs can provide amenities
Buying into an HOA may give you access to amenities like a tennis court or fitness center that you might not otherwise be able to afford or be able to enjoy in such close proximity to your home. For example, imagine having a resort-style pool, clubhouse, and walking trails just steps from your front door – amenities that could cost significant amounts to install privately. Many HOA communities offer features such as golf courses, playgrounds, dog parks, and even concierge services. A young professional might particularly value having a fully-equipped gym in their building, while families might appreciate having a safe playground where children can play with neighbors. These shared amenities are maintained by the HOA using everyone’s fees, making community features accessible at a fraction of the cost of individual ownership.
HOAs may reduce your responsibilities
The fees you pay to an HOA typically go toward services (like snow removal) and maintenance that you might otherwise have to perform, or contract for, yourself. Consider a busy executive who travels frequently – they won’t have to worry about finding someone to shovel their driveway during a winter storm or scheduling lawn care while they’re away. HOAs often handle landscaping, exterior building maintenance, trash removal, and even pest control. In condominium communities, the HOA might maintain the roof, exterior walls, and common plumbing, as defined in the community’s governing documents, saving individual owners from costly repairs and the hassle of coordinating contractors. This can be especially valuable for elderly residents or those who lack the time, physical ability, or expertise to handle property maintenance tasks.
HOAs can help maintain your home’s value
HOAs typically have rules to prevent property neglect and discourage neighborhood decline. They can help to maintain the property values for the homes within the community.5 For instance, if your neighbor wants to paint their house bright purple or let their lawn become overgrown with weeds, the HOA can intervene to prevent these actions that might negatively impact surrounding property values. HOAs enforce standards for exterior maintenance, landscaping, and acceptable modifications, ensuring the community maintains a cohesive, well-maintained appearance. This is particularly important during economic downturns when some homeowners might defer maintenance – the HOA rules help ensure that minimum community standards are met, protecting everyone’s investment.
HOAs can provide conflict resolution
HOAs often serve as neutral mediators when disputes arise between neighbors, offering formal processes for addressing complaints and violations. Rather than neighbors having to confront each other directly about noise complaints, property line disputes, or rule violations, they can report issues to the HOA board or management company. For example, if one resident’s dog is constantly barking and disturbing neighbors, the affected parties can file a complaint with the HOA, which will investigate and work with the dog owner to resolve the issue through established procedures. This formal structure often leads to more civil resolutions than direct neighbor-to-neighbor confrontations, and it provides clear documentation if issues escalate.
HOAs can provide added security
Many HOA communities offer certain security features that individual homeowners may not easily afford or coordinate on their own. Gated communities with security guards, controlled access systems, and surveillance cameras may be found in some HOA neighborhoods. Some associations hire private security patrols, install emergency call boxes throughout the community, or implement visitor registration systems. For example, a suburban HOA might have security cameras at all entrances and require guests to check in with a guard, while a high-rise condo HOA might have 24/7 doorman services and keycard access to elevators. These security measures can provide peace of mind, particularly for residents who travel frequently, elderly community members, or those living in areas where enhanced security is desired.
Cons of being part of an HOA
While HOAs offer benefits, they also come with potential drawbacks that can impact your finances, freedom, and lifestyle. Potential restrictions and costs can sometimes outweigh the advantages, depending on your personal preferences and circumstances. Here are the key disadvantages to consider:
- Risk of foreclosure for unpaid fees
- Surprise special assessments for major expenses
- Restrictions on home modifications and improvements
- Limitations on rental income opportunities
- Potential for poor management and governance issues
An HOA can foreclose on your home
If you get behind on your fees, the HOA may be able to foreclose on your home, attorney Amy Loftsgordon tells.com. (The process of doing so varies by state).6 Though, CAI advises HOAs to only use foreclosure as a “last resort.”7 This means that even if you’re current on your mortgage payments, falling behind on HOA fees could still put you at risk of losing your home. For example, a homeowner who loses their job and prioritizes mortgage payments over HOA fees might find themselves facing foreclosure proceedings for a few thousand dollars in unpaid assessments. In certain jurisdictions, the foreclosure process for HOA debts can be faster and require less notice than mortgage foreclosures. In some states, HOAs can foreclose even for relatively small amounts – sometimes just a few hundred dollars in unpaid fees plus legal costs.
HOAs can spring special assessments on you
If the HOA doesn’t have cash reserves to cover an expenditure, it can impose an assessment to come up with the money, the CAI says.2 These special assessments can arise with limited notice when major systems fail, natural disasters cause damage, or the HOA discovers they’ve been underfunding necessary reserves. For instance, a community might need to suddenly repave all roads or replace a swimming pool, costs that weren’t anticipated in the regular budget. Homeowners typically have limited time to pay these assessments, and failure to pay can result in liens or foreclosure.
HOAs may limit you from making changes to your home
HOAs often have specific rules about what modifications you can make to your property, both interior and exterior. You might need approval for something as simple as changing your front door color, installing solar panels, or adding a deck to your backyard. For example, an HOA might require that all homes have white or beige exterior paint, prohibit certain types of fencing, or ban outdoor storage sheds. Some associations even regulate interior changes that might affect the building structure or common areas. A homeowner who wants to install a home office addition might find themselves in a lengthy approval process, required to submit architectural plans and possibly modify their design to meet HOA standards. These restrictions can be particularly frustrating for people who want to personalize their living space or make energy-efficient improvements.
An HOA may stop you from renting your place
HOAs can put an array of rental restrictions in place. Some associations limit rentals, disallow certain pets, and screen prospective renters.8 Many HOAs have caps on the percentage of units that can be rented at any given time, meaning you might be placed on a waiting list before you can rent out your property. For example, an HOA might allow only 20% of units to be rentals, so if that quota is full, you’d have to wait for another rental to end before you could lease your home. Some associations require tenant background checks, impose minimum lease terms (preventing short-term rentals like Airbnb), or charge additional fees for rental units. This can significantly impact your ability to generate rental income or relocate while keeping your property as an investment.
HOAs can be poorly managed
Unfortunately, not all HOAs are well-run organizations, and poor management can create numerous problems for residents. Board members are typically volunteers with varying levels of experience in property management, financial oversight, or community governance. For example, an HOA board might mismanage funds, leading to special assessments, or they might inconsistently enforce rules, creating community discord. Some management companies hired by HOAs may be unresponsive to resident concerns, slow to address maintenance issues, or inefficient in their operations. Poor communication is another common issue – residents might receive little notice about important decisions or find it difficult to get information about HOA finances or upcoming projects. In extreme cases, HOA boards have been known to engage in improper practices or make decisions that benefit themselves rather than the community as a whole.
FAQs about HOAs
Can HOA fees be negotiated?
Generally, HOA fees cannot be negotiated on an individual basis. These fees are set by the HOA board based on the community’s budget needs and are applied equally to all similar units or properties within the association. However, you might be able to work out a payment plan if you’re experiencing financial hardship, and some HOAs offer slight discounts for paying annual fees upfront rather than monthly. The fees can only be changed through the HOA’s formal budget process, typically involving board meetings and sometimes requiring homeowner votes for significant increases.
What’s the average size of an HOA community?
The size of HOA communities varies dramatically, ranging from small condominium buildings with just a few dozen units to large master-planned communities with thousands of homes. Smaller communities (under 50 units) often have more intimate settings but may struggle with higher per-unit costs, while larger communities (500+ units) can offer more amenities and lower individual costs but may feel less personal and have more complex governance challenges.
Can you lose your home if you don’t pay HOA fees?
Yes, in many states, HOAs have the legal authority to foreclose on homes for unpaid fees, though the specific process and requirements vary by state. The HOA can place a lien on your property for unpaid fees, and if the debt remains unpaid, they may be able to force a foreclosure sale. This can happen even if you’re current on your mortgage payments. However, many states require HOAs to follow specific procedures, provide adequate notice, and attempt collection efforts before pursuing foreclosure. Some states also have minimum debt thresholds before foreclosure can proceed.
Are HOA fees a waste of money?
Whether HOA fees represent good value depends on your personal situation and what you receive for those fees. For many homeowners, the fees provide excellent value through access to amenities, maintenance services, and property value protection that would cost much more if purchased individually. However, fees can feel wasteful if you don’t use the amenities, prefer handling your own maintenance, or disagree with how the HOA spends money. The key is understanding exactly what your fees cover and whether those services and amenities align with your lifestyle and priorities.
In summary, are HOAs good or bad?
The question of whether HOAs are beneficial ultimately depends on your personal lifestyle, financial situation, and priorities as a homeowner. Before purchasing a home in an HOA community, carefully weigh the trade-offs between the benefits of shared amenities and reduced responsibilities against the costs and restrictions that come with community living.
HOAs tend to work best for certain types of homeowners: busy professionals who value the convenience of outsourced maintenance, families who want access to amenities like pools and playgrounds, people who prioritize a well-maintained neighborhood appearance, and those who appreciate structured community living with clear rules and expectations. Retirees often find HOAs appealing because they reduce physical maintenance burdens, while first-time homebuyers might appreciate the predictable costs and built-in community support.
On the other hand, HOAs may not be ideal for independent-minded individuals who want complete control over their property, DIY enthusiasts who enjoy handling their own maintenance and improvements, investors looking to maximize rental income flexibility, or budget-conscious buyers who want to minimize ongoing housing costs beyond their mortgage payment.
Consider factors such as the specific HOA’s financial health, management quality, and rule reasonableness. Review the association’s governing documents, recent meeting minutes, and financial statements. Talk to current residents about their experiences, and factor the monthly fees into your overall housing budget along with potential special assessments. Remember that HOA rules and fees can change over time, so consider not just the current situation but how comfortable you’d be with potential future changes to community policies and costs.
Ultimately, successful HOA living requires finding a community whose rules, culture, and financial obligations align with your lifestyle and long-term housing goals.