If you’ve never lived in a housing community, the term “HOA” may be foreign to you. An HOA, short for “Homeowners Association,” is a community organization that manages the neighborhood’s affairs. Usually, the community residents make up the board with a third-party organization managing the community’s day-to-day business.
When you buy a house in an HOA managed community, you’ll pay an initiation or transfer fee and then either monthly, quarterly, or annual dues. The dues help pay for community expenses such as landscaping, pool maintenance, community events, and more.
An HOA also ensures the community’s homes adhere to specific design and aesthetics rules called “CC&Rs,” or “Covenants, Conditions, and Restrictions.” Homeowners who want to make modifications to their home have to submit plans to the ACC (Architectural Control Committee), a committee that’s part of the HOA board for approval. Moving forward with additions without the committee’s written consent can be costly, especially if the group makes modifications or adjustments to the homeowner’s plans or denies them outright.
When moving into an HOA controlled community, homeowners agree to be bound by the CC&Rs, or else the HOA can fine them for violating the policies. And paying dues to the HOA is compulsory. Being delinquent with dues can lead to legal issues and loss of privileges within the community (e.g., being locked out of the pool).
There are pros and cons to moving into a community that is managed by an HOA. Knowing what you’re comfortable with and what you desire in a neighborhood are important considerations when deciding where to move. If you want to make unfettered changes to your home or property, an HOA may not be for you. However, if you prefer a master-planned community, an HOA may be the way to go.