Some condos, townhouses, and neighborhoods have a homeowners association that manages services and sets rules for the community. An HOA can offer some nice perks — but the tradeoffs might not be a good fit for all buyers. Here’s a closer look at whether buying a home with an HOA is worthwhile for you.
Key Takeaways:
- A homeowners association is typically in charge of maintaining common areas, streets, and sidewalks for its community.
- HOA members pay fees to cover the cost of the amenities and services provided by the HOA.
- Being part of an HOA can help keep the neighborhood a nice place to live, but it comes with restrictions on how you can use your home.
What Is an HOA?
A homeowners association is formed by the real estate developer when a building or neighborhood is built. Usually taking the form of a nonprofit corporation, an HOA manages amenities and services common to the building or neighborhood. It also establishes rules designed to preserve the community’s character and improve the member homes’ property values.
Over the last 54 years, HOAs have grown in popularity. The number of HOAs in the United States has grown from about 10,000 in 1970 to 365,000 in 2023, and about 30% of the population lives in a home with an HOA, according to the Foundation for Community Association Research.
If you buy a home in a neighborhood or a building with an HOA, you’re required to join — there’s usually no way to opt out.
Who runs an HOA?
HOAs typically are run by a board comprised of homeowners elected to the role by the membership. HOA boards hold regular meetings and enforce the HOA’s rules.
What are HOA rules like?
HOA rules are more formally known as covenants, conditions, and restrictions — or CC&Rs. A restrictive covenant is a rule established by the HOA that limits how you can use your property.
“HOA rules can vary a lot, but they often include guidelines on how you can decorate your home exterior, the types of fences you can have, and even when to put out your trash,” says Yancy Forsythe, owner and founder of Missouri Valley Homes, a real estate investment company in Carrollton, Missouri.
Some common examples of HOA rules include:
- What colors you can paint the exterior of your home.
- How you must maintain your home’s exterior.
- Landscaping requirements.
- What types of pets you can keep.
- Whether you can rent out or lease your home.
- Whether you can operate a home business.
- Construction or additions to your home’s exterior.
- The number and types of vehicles you can keep on your property.
- Restrictions on noises and smells.
- The type of fencing you can install.
If you violate HOA rules, the punishment can range from fines, suspension from services or amenities, and liens, to lawsuits or foreclosure to recoup the fees from the sale of the home.
Covenants can be changed with a majority vote from the membership.
You can request a copy of the HOA rules before you agree to buy the home. Some of them have websites where they are posted for easy review. You may want to ask a lawyer to review the document and explain the rules and your legal obligations.
What Do HOA Fees Pay For?
HOA members pay fees or dues to cover the costs of the services and amenities the HOA provides. Some examples:
- Landscaping for common outdoor areas.
- Trash pickup.
- Maintenance and repairs to common areas or the exterior of the building.
- The cost of operating and maintaining amenities such as a swimming pool, spa, fitness center, or tennis court.
- A reserve fund that can be tapped to cover emergency expenses or to save up for long-term improvement projects or repairs.
How Much Are HOA Fees?
HOA fees vary greatly depending on the size of your property, where you live, and which amenities and services are covered. Typical HOA fees for a single-family home are around $200 to $300 per month. As a general rule, the larger your home, the higher your HOA fees will be.
Can HOA Fees Change?
Your HOA membership may vote to raise HOA fees to keep up with inflation or to add services. While nobody wants to pay more in HOA fees than they have to, additional HOA services or amenities may end up having a positive effect on property values.
What If You Don’t Pay Your HOA Fees?
The HOA can penalize you if you fall behind on your HOA fees. At first, you likely will be charged a late fee. If you continue not paying your HOA fees, you could face a lawsuit, a lien, or even foreclosure. If you have trouble affording your HOA fees, communicate with your HOA board before you miss a payment.
Pros and Cons of Joining an HOA
Here’s a rundown of the perks and downsides of joining a homeowners association:
Pros and Cons of HOAs
| Advantages | Disadvantages |
| Services like landscaping, security, and trash pickup. | Monthly dues. |
| Community standards that help maintain property values. | HOA fees can increase over time. |
| Amenities like swimming pools, common green areas, or fitness centers. | Restrictions on what you can do with your home and property. |
| HOAs can mediate conflicts between neighbors. | Fines and other consequences for breaking HOA rules. |
| Maintenance and repairs for shared spaces are covered. | Membership isn’t optional. |
How To Decide if an HOA is Right for You
Some folks appreciate how HOAs manage and protect the community — and property values — and enjoy having access to the amenities they pay for. Others prefer having more autonomy to do what they want with their home. Weigh the pros and cons of joining an HOA with your priorities and needs to determine whether an HOA is right for you.
FAQ: Is Joining an HOA Right for You?
Here are answers to some frequently asked questions about whether joining an HOA is right for you.
No. “If you buy a home in an area with an HOA, you’re automatically a member and must comply with their rules and fees,” Forsythe says. “There’s no option to refuse joining.”
The rules and regulations imposed by your HOA may seem too restrictive. However, leaving your HOA isn’t as simple as opting out. Selling your home is the most straightforward way to get out of an HOA.
If you break an HOA rule, you can expect penalties in the form of fines, liens on your property, or other consequences.
The Bottom Line on Joining an HOA
Being part of an HOA can be worthwhile for some people, while it might not be the right fit for others. If a home you buy belongs to a homeowner’s association, you must join that HOA and pay dues. You’ll get access to the services and amenities offered by that HOA, but you’ll also have to abide by the rules.
