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A homeowners association (HOA) is an organization that manages a residential community. HOAs establish rules, collect fees, maintain common areas, and enforce community standards. Buying in an HOA community means agreeing to follow its rules and pay its fees. Understanding HOA structure helps buyers make informed decisions.

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How HOAs Work

HOAs operate under several documents:
  • CC&Rs (Covenants, Conditions & Restrictions): Rules governing property use, recorded with county, bind all owners
  • Bylaws: Internal operating procedures, elections, meetings, board duties
  • Rules and regulations: Detailed community rules, can be changed more easily than CC&Rs
  • Articles of incorporation: Creates HOA as legal entity
Elected homeowners who govern the HOA. Typically 3-7 members serving staggered terms.Board sets budgets, enforces rules, hires vendors, and makes community decisions.
Many HOAs hire professional management companies to handle day-to-day operations: collecting dues, coordinating maintenance, responding to complaints.Smaller HOAs may be self-managed by volunteers.
Homeowners can:
  • Vote in elections
  • Attend board meetings
  • Review financial records
  • Run for board positions
  • Propose rule changes
Rights are defined in bylaws and state law.

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HOA Fees

Monthly or quarterly dues covering operating expenses: landscaping, insurance, utilities, management, reserves.Typical range: $100 - $500+ per month. High-rise condos or amenity-rich communities charge more.
One-time charges for major expenses not covered by reserves: roof replacement, elevator repair, unexpected repairs.Can be significant (thousands of dollars). Check HOA financials for planned or recent special assessments.
Common expenses:
  • Common area maintenance
  • Landscaping
  • Amenities (pool, gym, clubhouse)
  • Insurance for common areas
  • Management company fees
  • Reserve fund contributions
  • Utilities for common areas
HOAs can raise fees, typically with board vote. Some states require member approval for increases above certain percentages.Review historical fee increases when buying.

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Common Rules

HOAs regulate property use and appearance. Rules vary but commonly address:
  • Paint colors (often pre-approved list)
  • Landscaping requirements
  • Fence styles and heights
  • Holiday decorations
  • Exterior storage
  • Satellite dishes and antennas
  • Rental restrictions (minimum lease terms, approval requirements)
  • Home business limitations
  • Vehicle restrictions (RVs, commercial vehicles, boats)
  • Noise and nuisance rules
  • Trash and recycling procedures
Most changes to exterior require architectural review committee approval:
  • Additions or structures
  • Roof changes
  • Window replacements
  • Landscaping changes
  • Fences and walls
Unapproved changes may need to be removed.
  • Breed or size restrictions
  • Number of pets allowed
  • Leash requirements
  • Waste cleanup rules
  • Registration requirements
Many HOAs restrict rentals:
  • Minimum lease term (often 6-12 months)
  • Percentage of units that can be rented
  • Tenant approval or registration
  • Some prohibit rentals entirely
Important for investors. Verify rental rules before buying.
CC&Rs were created when the community was developed and can be difficult to change (often requiring supermajority vote). Rules and regulations can typically be changed by board action.

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HOA Financials

Healthy HOA finances protect property values. Underfunded associations face special assessments or deferred maintenance.
Savings for major repairs and replacements (roofs, roads, pools). Should be funded based on reserve study projecting future costs.Well-funded reserves: 70%+ of projected needs. Underfunded reserves signal risk of special assessments.
Annual budget for day-to-day expenses. Compare budgeted vs actual spending. Consistent shortfalls indicate problems.
Percentage of owners behind on dues. High delinquency rates (over 10%) strain finances and may indicate community problems.
Lawsuits against the HOA can result in special assessments or insurance increases. Review any pending legal matters.
Request and review HOA financial documents before buying. Budget, reserve study, and meeting minutes reveal financial health and planned expenses. Underfunded reserves often lead to special assessments.

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Enforcement and Violations

Typical enforcement steps:
  1. Written notice of violation
  2. Opportunity to cure (fix the issue)
  3. Hearing before board if disputed
  4. Fines if not resolved
  5. Lien if fines unpaid
  6. Potential foreclosure for significant unpaid amounts
HOAs can fine owners for violations. Amounts and procedures must follow governing documents and state law.Fines can accumulate quickly. Unpaid fines become liens.
Owners can typically:
  • Respond in writing
  • Request hearing before board
  • Appeal through internal process
  • Challenge in court if process wasn’t followed
Review bylaws for dispute procedures.
HOAs must enforce rules consistently. Selective enforcement against specific owners can be challenged.Document instances where others weren’t cited for same violations.

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HOA Liens and Foreclosure

Unpaid HOA dues become liens against property.
HOA can record lien for unpaid assessments, fines, and fees. Lien attaches to property and must be satisfied to sell.
Some states give HOA liens priority over mortgages for limited amounts (often 6 months of dues). This “super-lien” can result in HOA foreclosure even with mortgage in place.
HOAs can foreclose for unpaid assessments in most states. Process varies. Some require court action; others allow non-judicial foreclosure.Foreclosure amounts can be relatively small compared to property value.

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Buying in an HOA

Sellers must provide HOA documents to buyers (state law varies on specifics). Typically includes:
  • CC&Rs, bylaws, rules
  • Current budget and financial statements
  • Reserve study
  • Meeting minutes (recent)
  • Pending special assessments
  • Pending litigation
Many states give buyers review period (often 3-5 days) after receiving HOA documents. Buyer can cancel if documents are unacceptable.
  • What are current and projected fees?
  • Are any special assessments planned?
  • How well-funded are reserves?
  • What are rental restrictions?
  • What major projects are planned?
  • Is there pending litigation?
  • What’s the delinquency rate?
Red flags when buying in an HOA:
  • Reserves under 50% funded
  • Recent or planned special assessments
  • High delinquency rate
  • Pending litigation
  • History of frequent fee increases
  • Contentious board or owner disputes

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Common Disputes

HOA denies requested modification. Options: revise request, appeal decision, request variance, or accept denial.
Owner disagrees with violation or fine amount. Follow internal appeal process. Document everything.
Disagreement over whether HOA or owner is responsible for repair. Review CC&Rs for responsibility boundaries.
Concerns about board decisions, spending, or transparency. Attend meetings, request records, or run for board.

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Getting Involved

Participating in HOA governance protects your interests.
  • Attend meetings: Stay informed about community issues and decisions
  • Vote: Elections and major decisions require member participation
  • Serve on committees: Architectural review, social, landscaping
  • Run for board: Direct influence on community management
  • Review financials: Understand where money goes

Next: Zoning and Land Use

Regulations controlling property use

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