What is an HOA, and what can it actually do?

A homeowners association (HOA) is a private organization, usually a nonprofit corporation, that manages a residential community's shared property and enforces its rules. If your home is in one, membership isn't optional. It comes with the deed.

How common are they?

The Foundation for Community Association Research estimates there are about 373,000 community associations in the United States, home to 78.1 million residents. In 1970, by its count, there were about 10,000 associations with roughly 2.1 million residents. The category includes single-family HOAs, condominium associations, and housing cooperatives.

Where an HOA's power comes from

An HOA's authority comes from two places.

1. The governing documents. The developer records a declaration (often called CC&Rs, for covenants, conditions, and restrictions) against every lot before homes are sold. It creates the association, sets out what it maintains, gives it the power to charge assessments, and lists use restrictions. Bylaws cover how the association is run. Rules adopted by the board fill in details.
2. State law. Most states have a statute for HOAs or planned communities, and a separate one for condominiums. Florida's chapter 720, California's Davis-Stirling Act (Civil Code § 4000 and following), and Texas Property Code chapter 209 are examples. These laws give associations powers, but they also set limits and give owners rights, such as access to records and a hearing before fines.

What HOAs typically do

• Maintain common areas such as roads, landscaping, pools, clubhouses, and, in condos, the building structure.
• Collect regular assessments (dues) and, when needed, special assessments.
• Keep reserves for future major repairs.
• Enforce the declaration and rules, including architectural standards and use restrictions.
• Buy insurance for common property.
• Hold meetings and elections.

Where the power stops

An HOA can only do what its documents and state law allow. It generally can't:

• enforce a rule that conflicts with the declaration or state law;
• skip procedures the law requires, such as notice and a hearing before a fine in states that require one (see how to fight an HOA fine);
• refuse owners access to records the law makes available (see how to request HOA records);
• override federal law, such as fair housing protections.

Who runs it

Owners elect a board of directors, usually volunteers who live in the community. Many boards hire a professional management company to handle day-to-day work, but the board remains responsible for decisions. See HOA board meetings and elections.

Why it matters to you

Your HOA decides how much you pay each month, what you can do with the outside of your home, and how shared property is kept up. Understanding your documents and your state's law is the best way to make it work for you. Start with reading your HOA documents.