Homeowners Association (HOA)
An organization that governs a residential community by enforcing rules, maintaining common areas, and collecting regular fees from property owners.
What is HOA?
A homeowners association (HOA) is a private organization established to manage and govern a planned residential community—such as a condominium complex, townhome development, or gated subdivision. When purchasing a property within an HOA-governed community, buyers automatically become members and agree to abide by the HOA's governing documents: the Declaration of Covenants, Conditions, and Restrictions (CC&Rs), bylaws, and rules and regulations. HOAs collect monthly or annual dues (HOA fees) from members to fund community maintenance (landscaping, pools, clubhouses), reserve funds for major repairs, and administrative costs. HOA fees nationally average $200–$400 per month for single-family home communities, with condo HOAs often higher. HOAs can enforce rules through fines, restrict exterior modifications, and in extreme cases, place liens on properties for unpaid dues. Prospective buyers must review HOA documents and review reserve fund adequacy—an underfunded HOA may levy special assessments for large unplanned expenses.
Example
A buyer purchasing a townhome in a 200-unit HOA-governed community pays $350/month in HOA dues covering exterior building maintenance, landscaping, community pool, and insurance on common areas. When a major roof replacement project is needed and the reserve fund is insufficient, the HOA board votes a $4,000 special assessment per unit. Property owners who fail to pay special assessments face liens that must be cleared before selling. The buyer should have reviewed the HOA's reserve study and financial statements before closing to identify this underfunded liability.