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Different Types of HOAs

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Homebuying comes with a long list of considerations, and it can get tricky if your new home is part of a homeowners association, or HOA.

You may assume that after buying your home, you can do almost anything you want with it, from painting it purple inside and out, to putting in solar panels or swapping grass for a mini-basketball court. Don’t grab the paintbrush just yet.

A homeowners association creates bylaws and covenants for your home, whether you live in a stand-alone home in a gated community, a townhouse (townhome owners association), or a condo in an apartment building (condominium association)  Together, homeowners associations are often referred to as community associations. In exchange for the oversight, homeowners typically pay a fee (see below) and agree to abide by certain rules in whichever planned community they live.

Homeowners associations are becoming increasingly common, according to the Community Association Institute (CAI), a membership group that provides advocacy and legislative support for community associations worldwide. According to the non-profit Foundation for Community Association Research, which helps support CAI initiatives, about a quarter of Americans — or 70 million — lived in some sort of a community association in 2017, the most recent research available.

“An HOA can offer amenities to a person or to a family that they probably couldn’t afford to realistically have—a health club, a golf course, even its own equestrian center,” said Thomas M. Skiba, chief executive officer at CAI. “There’s a community for everyone in the sense that if you have a particular interest or amenities in mind, you can find those.”

By the foundation’s count, there were 344,500 community associations in the U.S. that year, up from 10,000 in 1970.

What is an HOA?

Think of an HOA as a small government; homeowners within the community vote for board members, who, in turn, are given authority to decide how a small community should look and operate. This can include deciding on matters like whether a building’s roof needs to be repaired, or how common areas (like lobbies), street lighting, and landscaping should look. It can also include deciding where homeowners are allowed to park their cars, what types of pets they can have, the exterior color of their home, and even what color and style of curtains are permitted inside.

To newcomers, having to get approval from a homeowners’ association for a significant architectural change (like an add-on) may make sense, but conflicts sometimes erupt over seemingly trite decisions, like paint or curtain color. Still, it’s often the job of HOAs to make sure any proposed changes will not be disruptive, or cause a community to lose its uniform look. Even with paint and curtain colors, HOAs often adhere to standard white.

Like any well-meaning government, HOAs ultimately want to help everyone within their community live together successfully, and without friction. Here is what you need to know before moving into this kind of community.


If you live in a building or community with an HOA, you are required to follow its rules. Before moving in, ask for a copy of the bylaws and covenants, or rule book, that the HOA has created to make sure they are acceptable to you. These rules are usually spelled out in a manual that may also be available online.

In some cases, an HOA may not follow its own rules, say, for keeping lawns moved or a pool maintained properly. Or perhaps an HOA is putting one person’s interest before the interests of the community. In some cases, a homeowner may also feel that a certain board member needs to be removed, perhaps because they are not doing their job, or have a conflict of interest.

In situations like these, know that you have the right to meet with your HOA board to discuss the issue, and if it applies, ask for a timetable to correct the situation. Also know that you typically have the right to ask that a board member be removed.

If you are the one who is not following HOA rules, you can expect a letter asking you to resolve the situation. The letter should give you a time frame, and it should be the same as what is in your association’s bylaws. If you don’t agree with a rule or a complaint, ask to speak with the HOA directly to state your case.

Be aware that an HOA typically has certain legal powers. It can, for example, insist that the inside of your home be checked to see if you are breaking a rule, or require you to take down those purple curtains. It can also suspend your right to use common areas, for example, by not letting you use the pool until you’re paid up on fees, and possibly also fines.

In a worst-case scenario, an HOA may take you to court or ask that you be evicted, they can ask the banks to foreclose (if you owe fees) and you might be held responsible for attorney fees should you lose. An HOA can also legally place a lien on your property if you owe enough in fines. If any of these situations come up, you may have to hire a lawyer to argue for your rights. Community associations need to comply with state laws that determine how they are created and managed. To see the laws and regulations that may apply to HOAs in your state, check the CAI website.


An HOA isn’t all about rules. Typically, an HOA also help sets budgets and provides amenities and much-needed services. While services vary by community, according to the CAI, they may include providing fitness clubs and pools, street paving and lighting, landscaping, trash pickup and snowstorm clean-up.

According to the Community Associations Institute, many residents in communities governed by HOAs like the results.

In a November 2018 survey, the association found that 85 percent of residents rated their overall community association experience as positive or neutral (63 percent as positive and 22 percent as neutral). Eighty-four percent said members of their elected governing board served the best interests of their communities. And nine in 10 respondents said their associations’ rules either protected and enhanced property values (62 percent) or had a neutral effect (28 percent).

On its website, the CAI says its 2018 survey was the seventh conducted on its behalf since 2005 that has shown Americans living in HOAs and condominiums are “overwhelmingly satisfied in their communities.”

What powers does an HOA have?


If you are thinking about moving into any kind of homeowners association,you need to consider potential fees. Most HOAs have the right to raise monthly fees to meet the needs of annual budgets; they also have the right to levy any special assessment that might be needed for costly repairs. If you don’t pay any special fees or assessments, the HOA could eventually place a lien on your property, and this might eventually lead to foreclosure. The repercussions of this should be outlined in your bylaws.

HOA dues are mandatory and can range greatly from just a few hundred dollars to a thousand or more monthly, according to the federal Consumer Financial Protection Bureau. So add these dues to your monthly output before purchasing your home. The size of the fee depends on the size of your home or building unit, and the number of services provided. A single-family home may cost about $200 per month, while a larger home will cost more, as they’re expected to house a larger family who will probably use more common areas and homeowner services.

Where does that money go? Most goes for paying monthly expenses, but an HOA will also typically put a portion into an emergency savings fund to handle last-minute repairs, like fixing a collapsed porch, roof leak or broken elevator.

If a repair is very expensive — or an HOA has run out of money or insurance coverage — homeowners can also expect to receive a special assessment fee. This is an additional mandatory fee that might cover a large project like replacing a building’s entire brickwork, repairing a significant portion of the pool, or rebuilding the balconies for every unit.

Not happy with the special assessment? Check your HOA’s governing documents, which should specify the procedure your association must follow before levying a special assessment.

Be aware that before you sell your building unit or home, you’ll be required to pay any special assessment that might have been levied. Again, this should all be outlined in your governing documents.

Different types of HOAs

HOAs vary depending on the type of building or home you live it. Here are some of the terms you might see:

  • Homeowners association HOAs are autonomous and make their own rules and regulations, but may also be subject to state law to ensure they have the community’s best interest in mind. The HOA board is usually made up of volunteers within the building or community (rarely are they paid), and they’re elected by the homeowners. Fees collected by the HOA pay for common areas and also for improvements and repairs.
  • Condominium association This is the elected board that governs the maintenance and servicing of the condominium where you live. The board sets and enforces certain rules, maintains common areas, and determines condominium fees (usually paid monthly).
  • Townhome owners association Townhome owners typically pay for most of the upkeep of their homes, even for roof repair. Still, some townhouse developments have associations that oversee services like trash collection. Fees for these associations tend to be lower than for condominium associations, but not for associations representing single-family homes.
  • Master association This type of association oversees a larger area of residential space that may include a collection of neighborhoods or sub-divisions that are connected with amenities like community streets and recreational areas. A master association typically requires residents to comply with governing documents as well as pay fees for amenities like roads.
  • Civic association Like an HOA, a civic association includes like-minded community members who want to care for a building or community, but who are organized in a more casual way. They don’t enforce rules or dues, and the fees they set are optional.
  • Housing cooperative If you live in a housing co-op (as many New York City residents do), your unit is the portion, or share, of the building that you own, and you are required to help pay the building’s operating expenses. Nearly all co-ops charge residents a monthly maintenance fee that covers their share, according to the size of their unit.

The bottom line

Before buying your home, make sure you understand exactly what types of services you’ll be getting with an HOA, as well fees and rules. You’ll need to understand your obligations too, as a potential member of that community. An HOA could be a good move if you’d like to maintain the look and servicing of your new community. If you feel an HOA might be too restrictive, consider looking elsewhere. These guidelines from the Community Associations Institute can help you decide.


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