What is an HOA and how does it work?

If you’re in the market for a new home or have been before, you’ve likely heard the term “HOA” (or Home Owners Association) tossed around. According to recent statistics from iProperty Management, 58% of homeowners in the US live in HOA communities, and that number is likely to rise; there are currently 351,000 HOAs in the U.S., with an average of 22 new ones forming every day.

What exactly is an HOA? It’s generally defined as a private, self-governing organization in common-interest communities, like neighborhoods of single-family homes, condos, high rises, and townhouses. While the ins and outs of one HOA to another can vary wildly, they are typically devoted to managing, overseeing, and developing the community, both by upholding rules and regulations, and maintaining shared amenities and services.

HOAs are generally led by a board of volunteers who live in the community and are elected to their positions by their neighbors, though some are professionally managed by property management companies. Either way, HOAs don’t turn a profit and are funded by regular dues from community residents.

In many ways, you can think of an HOA as a mini-government for your housing community, with all the potential benefits and headaches that entails. So how do you decide if an HOA could be right for you? There are several factors to consider, many of which vary wildly from one HOA to the next. (If you’re considering joining one, in particular, it’s imperative to look up their specific restrictions, amenities, regulations, and costs before getting too far into the buying process; this kind of information will often be available on an HOA’s website, or you can request further details from your real estate agent.)

How much are HOA fees?

One of the few constants across all HOAs is the fact that they charge dues from community residents, paid monthly, quarterly, or annually. Depending on amenities provided, the number of community residents, cost of living, and other factors, monthly HOA fees can range anywhere from about $40 to over $2,000 — but the average HOA fee in the US (as of 2021) runs between $200 and $300 per month. An HOA board can vote to increase fees at any time as a community’s needs change, and they can also levy one-time payments for emergency or disaster relief.

What do HOA fees cover?

Rules and Regulations

Generally speaking, all HOAs deal with rules and regulations within their communities, which are known as covenants, conditions and restrictions, or CC&Rs. As such, HOAs find themselves dealing in conflict resolutions as well, since they may need to step in to enforce these CC&Rs, and resolve disputes between neighbors.

(As a side note, it’s important to remember that HOAs do not have absolute power, and can’t create any covenants that run contrary to federal and state laws. HOA rules are also considered unenforceable if they are enacted incorrectly or selectively, or enforced with no authority.) Many of an HOA’s regulations focus on the exterior of residents’ homes, which are held to certain standards of upkeep, and often a degree of visual uniformity. Restrictions related to a home’s interior are less common, but can come about in instances of noise complaints, renovations, types of flooring, and other issues that might affect your neighbors. (As one example, you may be restricted to hiring only an HOA-approved electrician, which could reduce the risk that your rewiring project will start a fire that burns down the neighborhood).

HOA Home with beautiful landscaping

Some of the most common CC&Rs involve the following:

Restrictions on landscaping (i.e. whether you can plant trees, use certain fertilizers, or even the height of your grass)

● Green provisions, related to issues like installing solar panels

● Exterior home appearance (which could cover anything from paint colors, the height of fences, street-facing window coverings to the color of tarp they cover their firewood with)

● Long-term storage allocations

● Regulations on parking and vehicles (for instance, many HOA regulations prohibit RVs from being parked in driveways)

● Restrictions on signage, landscaping, and holiday decorations

● Limits on pet quantity and size

● Noise complaint policies

● Restrictions on short-term rentals

● Home occupancy limits


While all HOAs have some hand in rules and regulations, not all provide amenities. Those who do will charge substantially more than those who don’t (which is where the range of $40-$2,000+ monthly dues comes in), and there’s virtually no guarantee of which amenities a specific HOA might provide.

That said, HOA amenities often include some some of the following:

Landscaping and maintenance, including pest control

● Garbage pickup

● Parking

● Pools

● Fitness Centers

● Community events

● Upkeep of shared utilities and common areas, such as walkways, parks, street lighting, elevators, or amenities like pools or clubhouses) ● Safety and security (particularly in gated communities; see our recent post on gated communities on this topic)


What are the potential advantages and disadvantages of a HOA?

When considering an HOA neighborhood, potential residents will quickly find that HOA features that seem like pros to one person may be cons to another.

We’ve compiled lists below of some of the most commonly-cited pluses and drawbacks in the great HOA debate, which may help you decide where you stand.

Pros of a HOA:

Well-maintained neighborhoods – Residents are held accountable to deed restrictions, architectural controls, and other guidelines to keep the neighborhood in good shape. For anyone drawn to a neighborhood that’s polished and put together, with no chipping paint and a certain collective aesthetic, HOA communities can be a dream come true.

Property values – On a related note, because HOA communities are commonly held to such high structural standards, residents can enjoy property values that hold steady or even rise over time.

Sense of community – In addition to more straightforward amenities, HOAs may also pay for neighborhood events to help residents get to know each other, such as picnics, cookouts, street festivals, and game tournaments.

Conflict resolution – Many of us have had the experience of wishing that an impartial third party could step in to resolve a dispute with an intractable neighbor. While HOA board members are only human and may not be completely impartial, they can still be an invaluable tool to bolster regulations and keep the peace. 

Amenities and well-maintained common areas – As we’ve mentioned above, a variety of amenities may be provided to HOA communities, including walking trails, barbecue pits, dog parks, and even private beaches.

beautiful HOA neighborhood

Cons of a HOA:

Cost-benefit ratio – Some residents may feel that they’re not getting much bang for their buck, especially if their HOA focuses more on rules and restrictions than on amenities. Even if an HOA does provide amenities, the cost of their regular upkeep may outweigh their benefit.

Overly restrictive regulations — While some residents may find that HOA restrictions take a lot of stress out of their lives, others may chafe at covenants that seem to tamp down their individuality. Residents who dream of implementing environmentally friendly landscaping, owning pit bulls, or painting their front door bright pink may well be unhappy in an HOA. Certain HOAs may regulate at even more granular levels, including the height of your grass, or what color tarp you use to color your firewood.

Rule enforcement may seem arduous: While conflict resolution may be a benefit to some, it could strike another as overkill, particularly if disputes involve stiff penalties (often fines) that seem out of proportion with the offense.

Penalties for non-payment: Depending on the penalties allowed by their state’s law, residents who fall behind on their HOA dues may face a variety of consequences – anything from warnings, fines, revoked access to community facilities, a lien being put on your house by the HOA, or even forced foreclosure.

Petty politics: To return to the government analogy, an HOA is vulnerable to the same human failings as any other kind of governing body, and– at their worst — can be influenced by egotism, power plays, and infighting.

Red Tape: Some residents may find that too many of their actions are tied up in bureaucratic red tape, and that even simple repairs and redecorations (including holiday decorations) can quickly become a headache, taking significantly longer to complete than they would in an HOA-free neighborhood.

When all is said and done, there’s no right or wrong answer to the question of whether you join an HOA. Aside from budgetary considerations, your decision may ultimately rely on personal preference – and given that living anyplace will involve some measure of bill-paying and rule-following, the HOA question may at least give you some clarity on what you do or don’t find livable, and what is or isn’t worth some compromise.

Last Updated on April 28, 2022