What is an HOA?

An HOA is an abbreviated real estate term that stands for Homeowners Association.

Typically, newer single-family neighborhoods, townhouse, and condominium developments are governed by an HOA to enforce the CC&R's (Covenants, Conditions & Restrictions) set forth by the developer in the initial development phase of a subdivision. It's the HOA's (Homeowners Association's) responsibility to ensure that each homeowner is abiding by the CC&R's set forth by the developer to help ensure that the neighborhood is maintained to a higher standard and uniformity than a neighborhood that doesn't have an HOA to enforce the CC&R's.

An example of an HOA responsibility would be the following.  Let's say your subdivision has a strip of landscaping between your property and the street. Within this strip of landscaping, let's assume there's a grassy area with trees planted sporadically throughout. This common area would be managed by the HOA and the HOA's oversight would include maintaining the trees, watering the grass, cutting the grass, etc. Simply put, the HOA would oversee the regular landscaping maintenance of this area ensuring that the job is being done right, on a regular basis, and at a competitive price. Depending upon where you live, parking lot striping, snow removal, dumpster / trash pickup, building maintenance, and the likes can also be included in the scope of what's covered under HOA CC&R's and Bylaws.

An HOA (Homeowners Associations) can be extremely beneficial in preserving a neighborhood and ensuring, regardless of who moves in and out over time, that the surrounding grounds of your housing complex are maintained to a high standard. Additionally, since there's usually a substantial amount of work involved with maintaining a complex, superior contractor pricing can usually be obtained to provide added value to each homeowner and the HOA fees each homeowner is obligated to pay.

If your subdivision and surrounding neighborhood is kept up to this higher standard, it can go a long ways towards improving the future value of your home, especially in today's housing market conditions where foreclosures and REO's abound.

For as nice as it may be to not see boats, RV's, semi-trucks, and the likes strewn on your neighborhood streets, HOA enforcement of the CC&R's can also be frustrating if you have a boat or RV that you need to park on the street. Likewise, if you want to paint your house pink, you may be out of luck!

If your HOA is mismanaged, your neighborhood won't be maintained to the degree that it should be, you won't receive the added benefit that comes with future home value increases, but you will still be responsible (stuck!) for paying your monthly HOA dues.

Additionally, as contracting and maintenance costs increase with inflation over time, so will most likely your HOA fees. Unfortunately, this leaves many people uncomfortable since the HOA fees are often not a fixed cost and, as with most things, the HOA dues usually escalate in cost as opposed to dropping.

What are HOA CC&R's and Bylaws?

As noted above, an HOA is meant to enforce the CC&R's (Covenants, Conditions & Restrictions) set forth by the developer. The CC&R's are the neighborhood rules that homeowners, collectively referred to as Association members, are supposed to adhere to.

The Bylaws refer to the rules and regulations by which the HOA operates. In other words, the Bylaws are essentially the operating agreement by which the HOA must adhere to while enforcing the CC&R's that govern the Association.

Typically, HOA's will have an annual (at minimum) Association meeting to discuss the current affairs and issues at hand being dealt with by the HOA. This meeting is usually hosted by the HOA's Board of Directors and many HOA's adopt the Robert's Rules to provide the procedural guidelines for which the Association meeting is conducted.