Homeowners associations, commonly referred to as HOAs, govern communities like townhouses, condominiums and subdivisions. They collect dues, maintain common areas and enforce rules such as quiet hours or consistency in home appearance. HOAs outline their rules in a covenant, which all homeowners sign onto. However, you cannot be forced to join an HOA if you bought your home before one formed in your neighborhood.
Pre-existing HOA
If you purchase a home in a neighborhood or a condo in a building overseen by an existing homeowners association, you must join. This requirement is a condition of your purchase, and there's no way around it. When your sale closes, you will start paying monthly, quarterly or annual HOA dues. These dues will help cover the costs of maintaining or repairing common areas and shared spaces, like yards, sidewalks, green spaces, swimming pools and playgrounds.
New HOAs
Occasionally a subdivision or planned development organizes an HOA retroactively, rather than creating one from the neighborhood's inception. Homeowners might want to enforce rules on existing properties or band together to create and maintain shared playgrounds or green spaces. In this case, if you bought your home before the HOA formed, you cannot be forced to join. An HOA must exist before you purchase for require membership.
Pros of HOAs
There are many benefits to creating and joining an HOA. Though they vary by the type of community, services like landscaping, recycling and garbage pickup, and repair of common property will be shared among homeowners. This can reduce your individual financial burden for both inexpensive and big-ticket items. Associations may also pay for amenities like recreation rooms, party rooms, pools, playgrounds and tennis courts that you could not otherwise afford on your own.
Cons of HOAs
But an HOA can have its drawbacks, too. You'll be forced to pay dues on a set basis, and they can sometimes amount to several hundred dollars in addition to what you're already paying for your mortgage and property taxes. If you lose your job or your finances take a hit and you miss dues payments, you may be penalized. And because HOA covenants are legally binding, you must abide by all the rules or be fined or taken to court. You might disagree with the rules and regulations set forth by the association, such as restrictions on yard ornamentation, exterior paint colors and fence height.
