What is a Home Owners Association (HOA)?
In the US, a Home Owners Association is that which maintains a property. When a property consists of several houses with different owners, or when it is a new building with many houses yet to be handed over, there would be a Home Owners Association in the picture. The developer forms the HOA for handling the marketing, sale, and management of the property. All those who own one or more houses on that property would be members of the HOA.
The HOA would be governed by certain rules which should abide by the state legislations. There might also be certain additional rules drafted at the time of the association formation. All owners and the residents of the property would sign a contract and agree to follow those rules. A copy of the list of rules in that particular HOA would be given to each homeowner as the “covenants, conditions and restrictions” CC&R’s.
The benefits of having an HOA:
1. Maintenance of the property:
One of the major reasons for forming an HOA is to develop a single body that would take up the responsibility of the maintenance of the property. The HOA rules would also lay down certain requirements and restrictions for the homeowners and residents. The HOA would handle all the basic maintenance and repair work required on the property and the common areas.
2. Added amenities:
You would be paying a periodic HOA fee. In return, you get to enjoy added benefits and amenities with your property. Different HOAs decide and offer different amenities. These amenities could include clubs, swimming pools, parks, play areas, basketball courts, gyms, security and lots more. The HOA also takes care of the maintenance of these amenities.
3. Maintaining decorum:
The HOA and the rules are mainly to help preserve decorum on the property. When there is a group of homeowners owning houses in the same property there needs to be a body to govern the uniformity and unbiased grants of permits to the homeowners. This is where the HOA takes charge. The HOA rules are also for the residents in the rented houses. These rules would ensure the maintenance of peace among the neighbors. It would also restrict and grant permissions regarding the use of the common areas and other common facilities which are to be uniform for the homeowners.
4. Maintenance of common funds:
A financially well managed HOA can manage and reserve funds. These can be used for any sudden repairs and updates needed on the property or in the common areas. For all big expenses done, all the members of the HOA would discuss and unanimously make a decision.
Having an HOA has its own pros and cons. The benefits outweigh the limitations in most cases, though. Few things that might discourage some people from buying a property with an HOA are the HOA fees to be paid periodically, stringent HOA rules etc. Some HOAs might implement rules about the exterior appearance of their house, owning of pets, and several other aspects which might not suit few homeowners.