What Is an HOA? How Homeowners Associations Work

Homeowners associations (HOAs) are private groups that create legally enforceable rules about what you and your neighbors can and can’t do with your property.

Despite their portrayal in pop culture, HOAs aren’t always a nitpicky suburban hive mind.

HOA fees pay for neighborhood maintenance and amenities, such as landscaping and parks. And most Americans living in community arrangements (including HOAs) are satisfied with them, according to a 2022 study by the Foundation for Community Association Research. Eighty-nine percent of residents rated their overall experience as good, very good or neutral, and 68% said the community rules protected and enhanced property values.

If you've only heard about HOAs through sitcoms and memes, it's time to put down your pitchforks. (After all, they might be against the landscaping policy.)

Here's how HOAs really work — and what to ask before you buy in an HOA community.

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An HOA is a group that governs a neighborhood or multi-unit building, primarily by making and enforcing rules to follow if you live there. HOAs are run by boards of directors, made up of — and elected by — neighborhood residents.

Sound like a drag? Not necessarily. When everyone knows what’s allowed, you have support if you have a conflict with a neighbor — such as a noise complaint, an issue with a pet or a passive-aggressive battle over a parking space.

HOAs are funded by resident-paid fees. They are common in housing developments where people share common space or amenities, such as:

• Planned or private neighborhoods.

• Subdivisions.

• Gated communities.

• Condominiums.

• Townhome complexes.

Some apartment buildings have HOAs as well.

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Do you have to join an HOA?

Not always. HOAs can be voluntary.

• Voluntary HOAs are optional to join, but members can access shared amenities, like a clubhouse or pool. If you don’t join, you don’t get the perks.

• Mandatory HOAs are just what they sound like: You have to join if you want to live in the community. That means paying fees and following the bylaws, too.

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HOA fees are dues that members pay to access the services and amenities managed by the association. HOA fees are usually charged monthly, but quarterly fees are also common.

Each association determines the specific services it provides to the community, as well as how much residents will pay.

How much are HOA fees?

HOA fees can range from less than $50 to more than $500 per month, depending on the style of housing and amenities offered. The most common range reported by residents was $101 to $300, according to the 2022 Foundation for Community Association Research survey.

A resident of a New York high-rise with concierge service and a spa-style fitness center will probably pay higher fees than a resident of a suburban Wisconsin tract house with minimal amenities. And within a given community, owners of a two-bedroom condo generally pay more than owners of a one-bedroom condo.

Be aware that fees can go up. In a Foundation for Community Association Research survey released in March, 91% of association professionals, board members and consultants said they saw an unexpected increase in expenses due to inflation, and 73% said they planned to increase assessments.

What do HOA fees cover?

Generally, HOA fees pay for the upkeep of common areas and amenities, such as:

• Walkways.

• Parks.

• Lighting.

• Elevators.

• Pools.

• Clubhouses.

• Gyms or fitness centers.

HOA fees can also fund services for the community, such as:

• Lawn care and landscaping.

• Maintenance and repairs.

• Snow removal.

• Trash pickup.

• Security.

• Pest control.

• Insurance for common areas.

• Social events, such as cookouts or holiday parties.

Often, part of your monthly HOA dues goes toward your HOA’s reserve fund. This fund pays for known upcoming maintenance or big projects, as well as emergency repairs for shared spaces. If your HOA doesn’t have enough in reserves to pay for a project, it can issue “special assessments” — aka, extra bills. HOAs can also raise fees at any time with board approval.

Do you have to pay HOA fees?

Short answer: Yes, just like any other bill.

If you forget a payment or fall on hard times, there’s usually a grace period. After that, expect to get a warning and possibly a late fee.

The HOA board also has the authority to cut off access to shared amenities for members who are behind on their payments.

What happens if you don’t pay HOA fees?

If you’re issued a warning and still don’t pay your dues, the HOA board can take more serious action. This can include:

• Collections: If your HOA sends your past-due account to collections, it can damage your credit score.

• Liens: If your HOA puts a lien on your property, that can come up in a title search and make it difficult to sell your house.

• Lawsuits: The HOA can sue you for unpaid dues in some states. This may result in wage garnishment or a levy against your bank account.

• Foreclosure: In some cases, your HOA may be able to foreclose on your property based on its covenants and state law.

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