What are Homeowner Associations (HOA's)?

 

If you are planning on buying a home, or have recently bought a home, then you need to make sure you know all about homeowner associations. Homeowner associations, or HOAs, are in just about every city and neighborhood in the county effecting almost every homeowner. However, even though they are very common, how active and involved they are will depend on the neighborhood. So, once you have learned what they are and what they can do, it is best to do research into the HOA where you plan to build and or live so you know what you will be getting into. Today we want to explain a little about what an HOA is, what they do, and how they can be a benefit to a homeowner. We won’t get into HOA horror stories, but rather how they can do good. That being said, there are horror stories out there concerning HOAs, which is why you want to do that research we mentioned earlier before you buy a home.

HOAs, what are they?

An HOA is an organization or association, as the name suggests, of homeowners in any particular geographic area, usually neighborhoods. This organization is traditionally a non-profit group that governs the affairs of the neighborhood. They don’t enforce the legitimate laws of the city, state, or nation, but rather the rules that have been put in place for the neighborhood. An HOA is headed by a board of directors who are chosen from the homeowners that live in the neighborhood they govern. These board members are elected by the eligible homeowners in the area. (Voter eligibility is dependent on the rules of the neighborhood).

Usually, you can expect an HOA to meet on a regular basis at whatever frequency works best for them. At these meetings, they will communicate necessary information to the other homeowners in the neighborhood, vote on important information, and so on and so forth. You will need to contact your HOA to find out when they meet.

What does an HOA do?

An HOA will usually do any of the following five things: work to maintain the neighborhood, run the neighborhood watch program, enact rules and programs to maintain the value of the neighborhood, facilitate discussion on and the creation of other neighborhood rules, and organizing association and neighborhood events. However, it is important to know that what an HOA can do is limited by the rules and regulations of the neighborhood. So, before we get started, just know that there if you don’t like what your HOA is doing, you can always try and change it using democratic methods.

Maintaining the Neighborhood

In most neighborhoods, there are common areas that are owned by the community. These can include things like parks, gardens, signs to indicate where the neighborhood starts and stops, mailboxes, and bulletin boards. While not all neighborhoods will have all of these things, if there are any, the HOA will be in charge of maintaining it. This can be either by hiring an agency to take care of it or organizing a volunteer program.

Neighborhood Watch Programs

If you want to protect your home, a neighborhood watch a good, low-cost way to do it. Neighborhood watches are usually put together by HOAs who spread the responsibility among members of the neighborhood. However, the way that the HOA organizes the neighborhood watch is dependent on the needs of the neighborhood and the resources it has. If you want to know more about the neighborhood watch in your new neighborhood, be sure to add that to the list of questions to ask when you finally meet them.

Maintain the neighborhood’s value

This essentially boils down to the HOA trying to maintain the look and quality of the neighborhood so the resale value of everyone’s homes either stays the same or grows throughout the years. However, this is job can be pretty vague, which is where many of those horror stories stem of HOAs measuring the length of people’s lawns, dictating the paint color of a house past banning exotic colors, and so on.

The reason this is so important is that the way a neighborhood looks and feels will influence the value of each individual home and vice versa. While it may not seem like it is super important, once you become a homeowner you will start to see how vital it is to your financial success. For instance, if you ever want to sell your home, you will likely want to try to make some money off it or at least break even. Well, if your home loses value that can’t happen; you will lose money instead of breaking even or making money. Or, perhaps, if you need to borrow money and the only thing of value you have to put up as collateral is your house the value of your home will limit the amount you can borrow.

Making and enforcing neighborhood rules

Every civilized society needs rules to function properly and neighborhoods are no exception. Most of the time neighborhood rules will include things like quiet hours, how many cars you can have in front of your home, if yard sales are allowed, and so on. They are supposed to make the neighborhood a safer, more comfortable place to live. If you don’t like them though, you can easily get involved in the HOA to have them changed.

Community Events

HOAs are also in charge of putting together many of the local events that many people look forward to each year. Block parties, community service projects, and street fairs are just some of the events you might see your HOA heading up.

As a Homeowner, What are My Responsibilities in Regards to My HOA?

Your first responsibility as a homeowner is to make sure you are informed about everything concerning your HOA. Now, this doesn’t mean you have to know everything about their history and so on, but rather all the rules that effect you, the names of key officials and communications officers. This will ensure that you won’t be caught off guard in your first few months of living in your new home.

Another responsibility you have as a homeowner is to pay your HOA dues. Yes, we know it’s not fun to pay dues, but without them your HOA can’t run. So, it is best you pay and pay regularly so that not only do you stay in good relations with your HOA but also so they have the funds they need.

Lastly, there is the responsibility of participation. You need to participate in your HOA. Whether it be during the rulemaking process or volunteering your time, you need to participate. If you don’t, you will be forfeiting your right to help make the rules and influence your community.

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