How do you explain HOA rules and dues to first-time home buyers?

If you are a first-time home buyer, you may have heard of homeowners associations (HOAs) and their rules and dues. But what are they, and how do they affect your home ownership experience? In this article, we will explain what HOAs are, how they work, and what you need to know before buying a home in an HOA community.

1 What are HOAs?

HOAs are organizations that manage and maintain common areas and amenities in a residential development, such as pools, parks, landscaping, security, and roads. HOAs are typically run by a board of directors elected by the homeowners, who set and enforce the rules and regulations for the community. These rules may cover things like exterior paint colors, landscaping, parking, noise, pets, and rentals.

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Debbie Peterson

Author, Speaker, Businesswoman, Former Mayor
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HOAs are actually quasi-governmental organizations with strict rules about transparency. Just like local government, it's important to show up to meetings and provide your input so you can be well represented and be sure that the board is acting in the best interest of the owners and not themselves.

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2 What are HOA dues?

HOA dues are monthly or annual fees that homeowners pay to the HOA to cover the costs of maintaining and improving the common areas and amenities. HOA dues vary depending on the size, location, and features of the community, as well as the services and utilities included. HOA dues can range from a few dollars to hundreds or even thousands of dollars per month.

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3 What are the benefits of HOAs?

HOAs can provide numerous advantages for homeowners, from enhancing the neighborhood’s appearance and value to providing access to amenities like pools, gyms, and playgrounds. HOAs also reduce individual maintenance and repair responsibilities by taking care of common areas and shared infrastructure. Additionally, HOAs can promote a sense of community and security by encouraging social interactions and cooperation between neighbors.

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Lee Clouse (LION™)

Executive Vice President at PMI Meridian
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One of the primary benefits can also be considered one of the drawbacks--rules enforcement. HOAs establish and enforce rules and regulations designed to promote a harmonious living environment and protect property values. By enforcing these rules, HOAs help maintain a well-maintained, cohesive community and prevent conflicts between neighbors. This consistency provides an owners with a set of expectations that can be easily understood.

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4 What are the drawbacks of HOAs?

HOAs can also have some drawbacks for homeowners, such as limiting personal freedom and choice by imposing rules and restrictions, increasing financial obligations and risks, exposing them to potential conflicts and disputes, and reducing their control and influence over the HOA's decisions. Homeowners may also be required to pay regular dues and assessments, which may increase over time or vary depending on the HOA's budget and needs. Furthermore, they could be subject to fines, liens, or lawsuits if they violate any rules.

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Debbie Peterson

Author, Speaker, Businesswoman, Former Mayor
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If you're the type that doesn't like being told what to do and how to do it HOAs aren't for you, UNLESS you can tamp down those instincts!

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Neci Hamilton, CMCA

Realtor®/Community Management Professional
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Dues increases, rule creation and enforcement —none of it stems from a desire to control or punish. HOAs simply aim to protect the property values homeowners invested in. Trash bins left out, lawns going brown, overgrown landscaping —on their own these seem trivial. But collectively they can undermine curb appeal and market price fast.

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5 How do you find out about HOA rules and dues?

Prior to purchasing a home in an HOA community, it is important to research the HOA's rules and dues. Request a copy of the HOA's governing documents, such as the declaration, bylaws, covenants, conditions, and restrictions (CC&Rs), and budget from your real estate agent. Carefully read through these documents and look for anything that may impact your lifestyle or plans for your home. Additionally, talk to the HOA board or manager to learn more about the HOA's operations, finances, policies, and procedures. Finally, take a visit to the community and talk to some of the current homeowners to get their feedback on the HOA's performance, benefits, and challenges.

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Neci Hamilton, CMCA

Realtor®/Community Management Professional
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When considering a home purchase, it is very important to check to see if the property is part of a HOA. I work for a HOA and it is surprising how so many residents move in without knowing their home was in a HOA community.

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6 How do you decide if an HOA is right for you?

Ultimately, deciding whether to buy a home in an HOA community depends on your personal goals, needs, and preferences. You need to weigh the pros and cons of living in an HOA and determine if the benefits outweigh the costs and trade-offs. You also need to consider your budget and affordability, as well as your willingness and ability to comply with and participate in the HOA. Buying a home in an HOA community is not just a financial decision, but also a lifestyle choice.

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Neci Hamilton, CMCA

Realtor®/Community Management Professional
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If you prize independence and want total authority over your property, HOAs do trade liberty for uniformity. Really, it’s about knowing yourself, and what you want out of your home.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Debbie Peterson

Author, Speaker, Businesswoman, Former Mayor
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HOAs can be wonderful collectives that save money for everyone. For instance, one board I was on negotiated a bulk rate for cable services and saved owners up to $200 a month every month for cable service. Your board can also negotiate things like a group rate for solar panels, or for services or repairs that are not covered by your HOA dues.

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How do you explain HOA rules and dues to first-time home buyers?

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1 What are HOAs?

2 What are HOA dues?

3 What are the benefits of HOAs?

4 What are the drawbacks of HOAs?

5 How do you find out about HOA rules and dues?

6 How do you decide if an HOA is right for you?

7 Here’s what else to consider

Working with First-Time Home Buyers

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