The Pros and Cons of Homeowners Associations (HOAs)

Did you just buy a property that’s part of a homeowners association? Be prepared to follow some rules that may range from helpful to peculiar.

Known as an HOA, a homeowners association can both simplify and complicate life for homeowners. Why are homeowners associations a thing when the whole point of homeownership is having freedom to do whatever you want with your home? Many people are more than happy to abide by a list of rules in order to enjoy neighborhood amenities. This article will cover the basics of living in HOA neighborhoods.

Homeowners Associations Explained

The Pros and Cons of Homeowners Associations

A homeowners association is an entity charged with enforcing rules for how a community is governed. While not all neighborhoods have HOAs, they are fairly common in planned developments.

When living in attached units, HOAs are often called condo associations.

What is the point of HOA? HOAs exist to maintain property values and quality of life in neighborhoods or communities. HOA rules are contained within the association’s covenants, conditions, and restrictions (CCRs).

The role of an HOA is to oversee rules, set conditions regarding property maintenance and appearance, manage communal spaces within the community, and collect fees. A document detailing all rules and regulations for the community serves as the guiding star for the HOA board when making decisions.

HOA boards are generally composed of community members.

Do HOAs Have Legal Authority?

Yes, HOA rules and CCRs are legally binding. When you violate HOA policy, you are essentially violating a contract. An HOA’s legal powers for noncompliance can include imposing fines, placing a lien on your home, and filing a lawsuit against you. This is one of the reasons why doing careful research on how HOA communities work is important before purchasing a home that is part of one!

HOAs and Your Home’s Appearance

HOA rules often dictate what homeowners can or can’t do with their homes. You may be unable to make alterations or updates to your home’s exterior without violating the terms of your HOA contact.

Of course, we’ve all seen stories about arguments over lawn ornaments getting out of hand between neighbors in HOAs. Anyone who moves into an HOA needs to be prepared for the fact that some neighbors who are attracted to this type of living arrangement will have zero tolerance for people who follow the rules loosely.

Just how controlling are HOAs? Most HOAs have rules about:

  • The colors and materials you can use for siding or exterior paint.
  • The number of vehicles you can park in your driveway.
  • Your ability to park a boat, trailer, or RV in your driveway
  • Fence placement
  • Fence height
  • Grass height
  • Trees and shrubbery
  • Landscaping
  • Lawn decorations
  • Porch decorations
  • Sheds and auxiliary structures
  • Pools and hot tubs
  • Holiday decorations
  • Additions

Additionally, most HOAs forbid or limit your ability to use a property as a vacation rental. Some might even limit the amount of visitor parking you can utilize when hosting people at your home.

Never agree to purchase a home in an HOA community without first taking a look at the community’s CCRs. What’s more, it’s important to ask to see the CCRs for every community you explore. While CCRs are similar among associations, they are not always identical. It’s possible for one association to have rules and covenants that are far more intrusive than the norm.

HOA Fees

HOA costs vary by community. Generally, fees are tied to the number of services and resources provided by the HOA. Even your location, neighborhood size, the type of property you’re purchasing, and an HOA’s operational style can all influence monthly fees.

While most homeowners are paying between $100 and $300 in monthly HOA fees across the country, luxury and high-end communities often charge thousands of dollars per month.

It’s also important to know that HOA membership sometimes comes with “surprise” fees that go beyond your monthly fees. This can happen when an HOA needs to finance a large update or repair. When money needs to be collected for a specific project, an HOA can impose what is known as a special assessment fee.

For example, an HOA may impose a one-time $400 fee on every community member if the community pool needs extensive repairs. However, it’s not unheard of for HOAs to impose fees totaling thousands of dollars for large infrastructure projects.

Like any organization, an HOA can be poorly operated. If an HOA board is not putting away reserves, the need for repairs or updates can be very taxing for the residents tasked with funding projects.

Where Can You View an HOA’s Fees?

Websites that provide MLS numbers generally also include HOA fees in their property listings. It’s smart to look at the fee history for recent years to get an idea of how much you can expect fees to increase.

If HOA fees aren’t listed for a property online, ask your agent to obtain them for you by talking to the seller.

HOA Services

The specific services covered by an HOA vary by neighborhood and community. Generally, communities with more amenities charge higher rates.

In some cases, HOAs exist mostly to govern the appearance of homes as a way to create a uniform neighborhood that protects the property values of homes. In other cases, an HOA is responsible for the care and maintenance of extensive neighborhood infrastructure that includes a pool, community center, clubhouse, tennis court, playground, and more.

In condo-style or apartment-style settings, HOA fees might go toward building maintenance that includes common areas, elevators, a gym, and landscaping.

In addition to covering luxuries, HOAs often take care of some necessities. Most HOAs cover water bills, sewer bills, garage collection, and some utilities.

If you’re at a point where you’re seriously considering purchasing a home in an HOA community, you have the right to see documents related to how expenditures are funded. It’s not a bad idea to bring the documents to a financial professional to get an idea of the health of an HOA’s finances to try to measure what they mean for your own long-term budget as a member of the community.

It’s often possible to book a meeting to speak directly with an HOA president. While often overlooked by buyers, this step is important because the HOA president will have great power in dictating your quality of life for as long as you live in a property.

Don’t forget that being elected to the board one day is also a possibility after you become a member of the community!

HOA Fees and Your Mortgage

Your lender cares about HOA fees. In fact, lenders will consider the HOA costs on a property when approving your mortgage. Yes, that means that an HOA can actually leave you with less buying power in some markets.

It’s important to note that HOA fees do not include taxes on a property. A homeowner is still 100% responsible for their own property taxes even if they live in an HOA community. Like property taxes, HOA fees are considered one of the hidden costs of homeownership.

Buying a Home in an HOA

Every buyer needs to weigh the pros and cons of purchasing a home in an HOA.

In some cases, you may not have much of a choice if most of the neighborhoods in a specific area where you’re searching have HOAs. This is where obtaining data and documents that allow you to compare the CCRs of different homeowner associations can be useful.

To wrap up, here’s a look at the pros and cons of buying a home in an HOA.


  • Property values can be higher in HOAs.
  • HOA neighborhoods are neat, orderly, and manicured.
  • If you have an issue or dispute with a neighbor, it can be taken to the HOA board.
  • Many HOAs have pools, tennis courts, and other amenities for the whole family.
  • Quality of life can be higher in HOAs.
  • There’s no need to worry about neighbors creating eyesores.


  • HOA fees can significantly increase your monthly cost of homeownership.
  • Some HOA boards are very stringent about what you can or can’t do with your own property.
  • Neighbors are more likely to complain if you make any alterations to your lawn.
  • You’re limited when it comes to updating or styling your home.
  • If you outgrow your space, you may not be permitted to add an addition to your home.
  • Things like solar panels, backyard chickens, and large gardens may be prohibited.
  • Failing to follow all HOA rules can lead to fines and legal action.

The bottom line on HOAs is they are somewhat bittersweet. While many homeowners like the convenience and orderliness created by HOAs, others feel constrained by tight regulations dictating what they can and can’t do in their own homes. An HOA is not always the best choice for someone who has their heart set on creating a unique, eclectic property. However, HOA living can greatly increase quality of life if you’re looking for a connected community where neighbors spend time riding bikes, splashing in the pool, or hanging out on the tennis court with their families.