The Pros and Cons of an HOA

Mon May 23 2022

Members of an HOA sit in the lobby of their condominium and vote on a proposal.

As a homebuyer, one of the hundred decisions you have to make is whether or not you want to buy where there’s a homeowners association (HOA), but that’s hard to do if you’ve never lived with an HOA’s rules and regulations before. We take a closer look at the pros and cons of an HOA to help you make the right choice for you and your family.

What Is a Homeowners Association?

A homeowners association is an organization that works to protect property values of its members. It does this by enforcing rules and bylaws and collecting HOA fees that it then uses to pay for the community’s upkeep and amenities. For instance, an HOA might pay for:

  • Garbage pickup.
  • Lawn care.
  • Swimming pool maintenance.
  • Professional security.

HOAs are often run by volunteer homeowners from the community. However, you may find some hire professionals for specific positions, such as financial managers.

The Benefits of an HOA

There are definitely some pluses to buying a home or condo where there’s an HOA. For example, you might find your HOA:

  • Offers fun amenities. Communities with HOAs often come with some very nice extras that homeowners may not be able to afford on their own, like pools and recreation centers. Some may offer party areas that you can reserve for family gatherings, barbecues, and parties.
  • Takes care of maintenance and repairs. Your HOA fees typically go to community upkeep for common areas, which can mean routine maintenance, like landscaping, or sudden repairs, like replacing the shingles to a clubhouse after a storm.
  • Covers the community’s utilities and city services. Depending on your situation, your HOA fees may also go towards some of the community’s utility bills, including gas, electricity, and water. City services, like snow removal, can also be covered.
  • Protects your property’s value. Most HOAs have rules that encourage homeowners to keep their property looking nice, like requiring homeowners to keep their lawns mowed and their homes in good repair. These rules generally help keep property values up because they make the area attractive to potential buyers.
  • Helps with conflicts. Sometimes the rules are enough to minimize conflict in the community. But when they aren’t, HOAs usually have a system for mediating disputes between neighbors.

Your HOA usually takes care of insuring all the common areas. However, you still need homeowners insurance or condo insurance for your home or unit.

Cons of an HOA

For some, the benefits of an HOA are outweighed by the drawbacks. The cons of living with an HOA include the:

  • Cost. Being part of an HOA does add to your monthly bills. Some HOA fees are minimal, maybe costing you an extra $50 per month, but others might cost several hundred dollars.
  • Rules. Joining an HOA means you agree to follow the rules, which can range anywhere from the color you can paint your front door to the number of people who can live in your house. You might find these rules frustrating, but ignoring them may result in fines.
  • Politics. Your HOA is likely run by neighbors who’ve been elected to its board of directors. While that can mean the people in charge have a good handle on what the community needs, it can also cause problems when the board has to weigh what’s best for the neighborhood against an individual’s preferences.

Question to Ask Before Joining an HOA

Before you buy in a community with an HOA, you want to make sure that you understand what you’re getting into. You need to know how much you’ll pay in HOA fees and what sort of services and amenities you get for that extra cost. Plus, you want to get an idea of whether or not the community is a good fit. Some key questions to ask include:

  • Can I have a copy of the HOA’s bylaws?
  • How much are the HOA fees and what do they cover?
  • When was the last time the board increased the HOA fee?
  • How often are there special assessments?
  • What was the most recent special assessment for?
  • Is the board planning any major projects in the near future?
  • How much does the HOA hold in reserve?
  • What isn’t covered under the HOA’s insurance policy?
  • Do the amenities fit my lifestyle? Will I get my money’s worth?
  • Is the property a good investment?
  • Do the rules restrict the type or number of pets I can have?
  • Can I rent the property to others?
  • Is this an age restricted community?
  • What are the rules regarding solar panels, satellite dishes, flags, fences, and patios?

This is not a complete list of all the questions to ask when buying a house, but it should give you a good idea of issues you need to cover before you join an HOA.

Can You Refuse to Join a Homeowners Association?

HOAs are almost always mandatory. Otherwise, they’d have no way to enforce their rules and regulations. So the only way to avoid joining an HOA is to buy a home where there isn’t one.