What is a Homeowners Association (HOA)?

A homeowner’s association (HOA) will exist in many planned communities and subdivisions, and the association will usually expect dues to be paid from all residents in a community.

They will have a board of directors, usually, who make it their business to help maintain the quality of the neighborhood by making sure common areas are taken care of and that residents are complying with the community rules. A HOA may have rules in place that make a place unpleasant to live in for some people.

That is kind of the idea, though: they want only the type of people that see eye-to-eye with them to live in their neighborhood. The rules could range from approved colors for houses, or that all members would have to ask the board for approval if they wish to change the color of their house, to rules regarding the use of the common areas and parking.

Some HOAs will maintain a pool, tennis and basketball courts, or another amenities, using the dues paid by members in the neighborhood to pay the groundskeepers or lifeguards and so on. Ultimately they hope to be able to not only keep people that they can get along with around, but to also ensure that their property value remains at least as high as it was when they bought the property.

It can also make family life more fun in the neighborhood by designating that all homeowners must decorate for holidays. The HOA, because it has received your signature and dues, has the power to levy fines on you for non-compliance.

If these go unpaid, they can be added to your property tax bill and can ultimately result in a foreclosure on your home.