Understanding a Home Owners Association

Many people have heard the term home owners association (HOA), but not all people understand what all an HOA does or why having one can be an important role within a neighborhood.

An HOA is run by a board of individuals selected/voted upon within a certain community or neighborhood. These individuals work together to oversee the upkeep and maintenance of common areas of the neighborhood including shared roads, clubhouses, pools, and neighborhood entrances. The board of directors in the HOA also manage the neighborhood finances, set and enforce neighborhood bylaws (rules), and ensure that a neighborhood is a safe and pleasant place to call home.

Let’s break those down a little further.


  1. Determine, approve, and enforce the covenants, rules, and bylaws of the neighborhood as laid out in the neighborhood association documents.

  2. Review and resolve any complaints made against fellow neighborhood residents.

  3. Appoint committees of the neighborhood (neighborhood watch, landscape planters, neighborhood cookout committees) and delegate tasks to said committees.

Meetings: Majority of HOAs hold bi-annual or annual meetings.

  1. The HOA holds meetings for the neighborhood residents to get together and vote on important neighborhood matters, issues, and proposals (i.e. do we get a pool, are fences allowed, etc.)

  2. The HOA also holds meetings just for the board of directors within the HOA. This allows the board to discuss topical issues, complaints and how to address them, etc. prior to bringing about solutions and resolutions to the neighborhood occupants.

Finances: Living in a neighborhood that operates outside of public roads means that there will need to be finances involved since the neighborhood maintains itself internally.

  1. The HOA works on setting a budget each year using input from the neighborhood residents.

  2. Financial records are kept showing what has been spent where and how much money is left for possible upgrades along with further maintenance for the year.

  3. With an HOA usually comes yearly or monthly dues that are paid to the home owners association. These dues contribute to the maintenance and utilities of the neighborhood. If you live in a condominium, many times these dues will cover the cost of some of your personal home utilities like trash, water, and/or electric.

  4. Sometimes neighborhoods need to consult with a professional attorney, accountant, or other business professional. HOAs exist to facilitate this communication along with allocate funds to pay for these services.


  1. As previously discussed, the HOA takes fees to pay for maintenance. These are then budgeted for general maintenance along with repairs of any communal neighborhood spaces.

  2. The HOA will also respond to any neighborhood emergencies that occur within shared spaces.

  3. If repairs are needed, the HOA will collect bids from contractors and choose one to fix something in need of repair or general maintenance throughout the year.

Now that we understand some of the duties and need for a neighborhood to have a home owners association, what are the pros and cons of having an HOA?


  1. They keep the neighborhood clean, safe, and help to preserve property value and safeguard investments.

  2. The money collected is used to improve the neighborhood, maintain the wellbeing of the neighborhood, and add more amenities to the neighborhood.

  3. The rules, covenants, bylaws, restrictions, and conditions determined by the HOA help to maintain property value, create a safe place to live, and increase the curb appeal in a neighborhood for potential buyers (i.e. a homeowner cannot just collect junk on their front lawn).


  1. Some HOAs propose strict rules and restrictions. If you live in a community with rules, you are expected to follow them; otherwise, there can be a penalty you must face for breaking them. These penalties can range from a warning, to a fine, or even foreclosure if a homeowner refuses to pay his or her HOA dues. However, these things are easily preventable by reading your association paperwork prior to purchasing a home to ensure you agree with the laid out rules, restrictions, covenants, and bylaws of a neighborhood prior to becoming a resident.

As long as you as a resident understand and follow the rules and pay your dues in a timely manner, your experience with living in a neighborhood with an HOA will be nothing short of splendid!


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