Understanding the Basics of Entering an HOA


When buying a home there are multiple things to consider. What kind of mortgage are you going to get? Do you want to remodel? However, one of the most important things to think about that many don’t know is whether your neighborhood has a homeowners association (HOA). In this guide we’ll answer all your questions surrounding HOAs like how much they cost, who controls them, and if you can opt-out.

What is an HOA?

An HOA is a group of homeowners that runs your community so it can function properly. They also control many amenities such as clubhouses, pools, tennis courts, and parking garages. These shared common areas are under the jurisdiction of the HOA. They also have rules on things such as pets, yard maintenance, the color you can paint your home, and noise restrictions. According to a study in 2018 from the Foundation for Community Association Research, it was found that 25% to 27% of Americans belong to an HOA. The likelihood of your next home being in an HOA is much higher than you might think.

Who Controls them?

Members on the HOA board control the rules and regulations the homeowners in the neighborhood have to follow. They are similar to a landlord, but are not paid to be in their position and do not need any qualifications to be on the board except for being a homeowner. The members of the board are elected by their fellow neighbors.

How much do HOAs cost?

HOA fees are usually on a monthly basis, but the range can vary depending on community. Many sources claim for a single family home the low end is around $200 per month and the high end can go somewhere between $500 and $700 per month.

What do you get from them?

Depending on the type of community you live in, you could get perks such as yard maintenance, amenities like pools, gyms, and tennis courts taken care of for you, and help repair your home to ensure the neighborhood stays at a certain value. Basically, they help elevate responsibilities you would’ve had to take care of yourself. By paying money each month you pay to not have to stress about community problems because you have elected people to do this work for you.

Can I opt out of them? Are there repercussions?

Unfortunately, many HOAs will not let you opt out. Once you buy a home in their area of jurisdiction then you become a part of the HOA. This does not mean you are on the board unless you want to run for a position and be elected to become a member of the board. However, it does mean you have to follow whatever rules and regulations they have put in place in the neighborhood and pay their monthly fee.

If you break a rule there may be penalties in the form of reversing the violation, legal action, or paying a fee. Since you enter into a contract with the HOA, which is basically a corporation, there could be legal action taken against you if you violate the contract. The most common method of fixing the mistake is paying a fine. You might also have to pay for special assessments for projects deemed necessary and emergent such as painting each house a specific color before winter. You can try to appeal this to the board and ask if these funds are actually necessary.

If you want to learn about the Pros and Cons of HOAs make sure to check out our next blog or feel free to contact one of our Loan Advisors to discuss your options.