People complain about homeowners associations, but the number of people who live in them continues to grow. According to the CAI (Community Association Institute), in the 1970s, 2.1 million lived in HOAs. That number took an enormous jump to now 77.1 million people living in HOAs. In this blog, we’re going to explore what HOA means, HOA fees and what the benefits are.
Table of Contents
Important Definitions
Let’s start with the basics. HOA stands for Homeowners Association. In an HOA, the residents own their own house and the plot of land on which it stands. However, the common areas are owned and managed by the HOA’s Board of Directors, often with the help of a Property Manager.
Basic Duties and Fees
As previously established, HOAs own and manage the common areas of the community. So, where does all the money from the homeowners associations fees go? For the most part, the money goes to maintaining the aforementioned common areas.
If the HOA has grounds, then they spend a lot to keep them trimmed and aesthetically pleasing. If there’s a pool in the association, then some of the money goes into keeping the pool clean and safe for swimming. The same goes for any other amenities (tennis courts, a clubhouse, a conference room) that require maintenance.
If the HOA has a Property Manager, who is instrumental in keeping everything running smoothly, they need to be paid for their services. If the community has a management software, like Neigbrs by Vinteum, they must pay the software company. All these things add up, and the HOA fees cover them.
Benefits of Having an HOA
We’ve discussed what the fees are for, but what do you get in return?
- The first thing is that you get nice amenities to enjoy, like beautiful grounds and smooth roads, which increase the value of your property.
- Another factor that increases your property value is HOA rules. These rules ensure that your property value can’t plummet because an individual or group started leaving dog mess everywhere, or drawing graffiti all over the playground, or impacting the neighborhood negatively in any way.
- An HOA or condo also fosters a stronger sense of community and pride in the community. Your HOA board can organize events and activities to bring people together and create that sense of closeness.
- HOA and condos can mediate if there are ever conflicts between neighbors about late-night noise or property lines.
- Often, basic maintenance is included, so snow removal is organized by the board, which means you don’t have to worry about it.
Drawbacks of Having an HOA
For all the benefits that homeowners associations bring, there are always drawbacks.
We’ve explained what HOA fees are for, and 99% of the time, they’re justified and worth paying for. But, occasionally, HOAs can impose some extra fees that might be higher than you’re willing to pay. If your HOA is well managed, then this shouldn’t happen, but it could.
To have a well-maintained community, you need to have rules for the association as a whole, Board Members and residents alike, as a way to avoid frustration and resentment.
While HOAs mediate disputes, they can cause them as well. A neighbor may claim you’re not following the rules properly or be annoyed that you called him out about something.
Living in an HOA can be a great way to enjoy amenities and activities, while reducing stress about maintenance. Homeowners associations do a lot for residents, and the drawbacks are often so that you can have even more benefits.
FAQ
What is the primary purpose of the HOA?
An HOA’s primary role is to manage the community’s shared areas, handle the property maintenance and ensure the community’s pre-established rules are being followed. By doing so, the HOA helps to preserve quality of life for residents while also protecting property values.
What are the disadvantages of having an HOA?
The disadvantages of having an HOA are often related to the required fees, strict regulations, risks of poor management, and reduced privacy.
Do HOAs hurt home value?
The effect of HOAs on property values can go either way. On the positive side, they help preserve home values by ensuring regular maintenance and enforcing community standards. On the other hand, steep fees, overly strict regulations, or unresolved conflicts can hurt values.
Are HOA fees a waste of money?
HOA fees shouldn’t automatically be seen as wasted money. Although they can represent a considerable expense, these contributions usually fund important services and amenities that improve the neighborhood and help sustain property values.
Wrapping up the discussion
An HOA is a homeowners association managed by a group of volunteers who handle the finances and the upkeep of the common areas of a community. HOA residents pay fees to keep the homeowners association running. They have many benefits, including access to well-taken-care-of amenities, more stable property values, and maintenance organized by the board.
Having a management software that helps Board Members communicate with residents and improve the community as a whole, can be really beneficial. To learn more, read this article on HOA software and schedule a free demo today to see how Neigbrs can be your partner on the path to success.
