A Homeowners Association (HOA) is a non-profit association of homeowners organized under governing, regulated, and enforced rules regarding what can and cannot occur in common-interest developments such as condominiums, townhouses, and some single-family subdivisions. It is typically created by a real estate developer and transferred to the homeowners of the real estate project once a certain number of units have been sold.
When a person buys a home in a community with a Homeowners Association, he/she becomes a member of that particular HOA and is responsible for monthly membership dues. These dues are collected to pay for several services to be covered for the homeowners such as:
- Exterior building maintenance
- Cable TV
- Parking areas and driveways
- Exterior lighting
- Liability insurance
A “board” of directors is elected to advocate the rules called “Covenants” for the neighborhood. HOAs may help keep property values high because homes and landscaping are vital for the improvement, upkeep, and governance of the community’s appearance. This is particularly important for the advertising of and selling within a residential subdivision.
Remember to include HOA fees as a part of your monthly housing expense along with your mortgage payments. The Homeowners Association and its fees are things you’ll want to consider when you are purchasing your property. Be sure you fully understand the details of a Homeowners Association before making a decision.