Homeowners’ Associations (HOAs) are a common feature in many residential communities, yet their rules, responsibilities, and benefits are often misunderstood.

Approximately 74 million Americans, or 53% of all U.S. homeowners, live in HOA neighborhoods, underscoring their widespread influence on residential life. Those aspiring to purchase a newly built home are more likely to live in an HOA community, as 67% of new single-family homes completed in 2024 were built in HOA communities, according to US Census data.

With the number of HOAs forecasted to total 373,000 by the end of 2025, increasing by 3,000–4,000 new associations—according to The Foundation for Community Association Research—the sector’s unabated expansion demands our attention. Whether you’re considering buying a home in an HOA-governed neighborhood or already live in one, it’s crucial to understand how these organizations operate and what they mean for your rights and responsibilities as a homeowner, as they are not going away.

This guide breaks down the essentials of HOAs—how they work, what they can regulate, and what you need to know to avoid surprises and make informed decisions.

Throughout our primer, we have included expert advice from the founder of The CASA Alliance, Vicki MacHale, a 30+ year veteran of the community association industry.

Table of Contents

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What are HOAs?

HOAs (Homeowners Associations) are organizations formed by a community of property owners, typically in residential areas, to manage and oversee the shared responsibilities of the neighborhood. These responsibilities may include maintaining common areas (parks, swimming pools, streets, walkways, etc.), enforcing rules and regulations, and enhancing property values by upholding quality standards.

Aerial view of a gated townhome HOA community

Aerial view of a gated townhome HOA community

HOAs serve to maintain the integrity and cohesiveness of a community by enforcing rules, managing common spaces, and ensuring consistency. However, they come with costs, limitations on personal freedom, and potential disputes.

HOAs are typically formed for planned communities, condominiums, and townhouses. They are governed by a set of rules called Covenants, Conditions, and Restrictions (CC&Rs) that all homeowners within the association must adhere to as part of the community.

Key aspects of HOAs to understand include:

 

The Purpose and Structure of HOAs

The purpose of an HOA is to maintain the overall quality and harmony of a community. With the following responsibilities:

  • Maintaining Community Standards: HOAs help ensure that a neighborhood or community maintains its aesthetic value and overall appearance. This can include rules about landscaping, the exterior of homes, and parking.
  • Managing Common Areas: HOAs manage common areas, such as parks, pools, clubhouses, and streets. They ensure these spaces are well-maintained and accessible to residents.
  • Conflict Resolution: They often mediate disputes between neighbors, particularly those related to community guidelines or property upkeep.
  • Enhancing Property Value: By maintaining consistency and addressing issues quickly, HOAs can help maintain or even increase property values in the area.

Suburban HOA neighborhood street

The structure of an HOA provides for the overall governance of the community and typically includes the following:

  • Board of Directors: Typically elected by homeowners, this governing body manages the day-to-day operations of the HOA, enforces rules, and makes decisions on behalf of the community.
  • Property Manager (optional): Larger communities might hire a professional property management company to handle administrative tasks, like organizing meetings, handling finances, and managing maintenance.
  • Committees: Some HOAs have committees (e.g. architectural review, landscaping) that focus on specific areas of the community.

 

Cost of HOAs and Payment Options

HOA fees are a recurring cost for residents living in communities governed by an HOA, typically paid either monthly or annually. The amount of these fees varies based on factors such as the size of the community, the range of amenities, and the services provided. In general, fees can range from as low as $50 per month to several hundred dollars. In upscale or luxury communities with extensive amenities, fees can easily exceed $1,000 per month. These payments help fund the maintenance of common areas, management services, and community improvements.

A state-of-the-art community center being built in Orange County, California

A state-of-the-art community center being built in Orange County, California

What Do HOA Fees Cover?

HOA fees cover a variety of essential services and expenses that help maintain and enhance the community’s shared spaces and overall quality of life. These fees typically fund the upkeep of common areas such as lawns, streets, sidewalks, and parks, as well as security measures like gated access and patrols. Additionally, they pay for utilities used in common spaces, including lighting and water features, and provide insurance coverage for these areas. HOA fees also support repairs and upgrades to shared amenities like pools, tennis courts, and clubhouses, while contributing to reserve funds set aside for long-term maintenance and unexpected emergencies.

Examples of What HOAs Fees Cover:

  • Maintenance of Common Areas (lawns, streets, sidewalks, parks, etc.)
  • Security Services (gates, patrols)
  • Utilities for Common Spaces (lighting, water features)
  • Insurance for Common Areas
  • Repairs and Upgrades to Shared Amenities (pools, tennis courts, clubhouses)
  • Reserve Funds (for long-term maintenance or unexpected emergencies)

Payment Options for HOA Fees:

  • Automatic Payments: Many HOAs offer automatic deduction options to make it easier for homeowners to stay current on payments.
  • Online Payment Portals: Some associations provide a secure website where owners can pay fees using credit cards or bank transfers.
  • Checks or Money Orders: Some HOAs still accept traditional payments by check or money order.
  • Late Fees: If homeowners fail to pay their fees on time, they may incur late fees, and in severe cases, liens may be placed on the property.

 

Benefits and Drawbacks of HOAs

HOAs offer a mix of benefits and drawbacks that can significantly impact residents’ experiences. On the positive side, HOAs help maintain a well-kept community, provide shared amenities, assist with conflict resolution, and often contribute to increased property values.

Model home in a new HOA community in Southern California

Model home in a new HOA community in Southern California

However, these advantages come with potential downsides, including the financial burden of fees, restrictions on homeowner control, the possibility of overly strict rule enforcement, and the chance that the HOA itself may become a source of disputes.

Before moving into an HOA-governed area, it’s important to consider the balance between the benefits of a well-maintained neighborhood and the potential downsides of additional fees and restrictions.

Benefits of HOAs:

  • Well-Maintained Community: HOAs ensure that the community is well-kept, helping to maintain property values. They enforce uniformity in home aesthetics, which can make the neighborhood more visually appealing.
  • Shared Amenities: Many communities with HOAs offer amenities like pools, fitness centers, and walking trails that may not be affordable or accessible in non-HOA neighborhoods.
  • Conflict Resolution: HOAs can mediate disputes, helping to maintain peace among neighbors and address issues like noise complaints, parking violations, or property maintenance concerns.
  • Increased Property Value: A well-managed HOA often contributes to higher property values since potential buyers appreciate well-kept communities with consistent standards.

Drawbacks of HOAs:

  • Cost: HOA fees can be a significant financial burden, especially in larger or upscale communities. Homeowners are also required to pay fees whether they use the amenities or not.
  • Limited Control: Homeowners may feel restricted by the HOA’s rules, especially if they have to adhere to strict guidelines about things like paint colors, landscaping, or exterior changes to their homes.
  • Potential for Overreach: Some HOAs can be overzealous in enforcing rules, leading to conflicts or disputes over minor issues. A rigid or inflexible board can sometimes make life unpleasant for residents.
  • Additional Disputes: While the HOA exists to resolve conflicts, it can also become a source of tension, especially if board members are perceived as overstepping their authority or acting unfairly.

Aerial view of an older HOA community in Scottsdale, Arizona

Aerial view of an older HOA community in Scottsdale, Arizona

 

HOA Due Diligence Before Buying a Home

Before buying a home in a community governed by an HOA, it’s crucial to perform due diligence to ensure you understand the responsibilities, costs, and rules associated with the HOA.

Outdoor seating area in a new HOA community

Outdoor seating area in a new HOA community

A well-managed HOA can make living in a community enjoyable, while a poorly managed one can lead to frustration and financial strain.

This section shows how to assess the potential risks and rewards of buying a home in an HOA-governed neighborhood. Touring the community is just the first step, as reviewing budgets, reserve studies, disclosures, and meeting minutes is imperative to get an informative overview of the association.

MacHale recommends starting your due diligence by doing the following:

Take time to walk through the community to see if you like the feel, over and above the home you are considering. Is the neighborhood very clean and sterile—no kids, no trashcans, no cars? This might appeal to some, but it can also be a sign that the board is overly restrictive. If you can, talk to people living in the association and see what they have to say.

Here are additional items to look for when accessing an HOA community:

 

Traits of Lower-Risk HOA Communities

Some properties are inherently lower risk when it comes to HOAs, as they are part of well-established, well-run communities. These are typically easier to manage and may offer a better overall living experience.

Scenic Colorado HOA neighborhood with mature trees

Scenic Colorado HOA neighborhood with mature trees

Key Characteristics of Lower-Risk HOA Properties:

  • Established Communities: Older, well-established neighborhoods with stable HOA boards often have clear processes in place, and rules that are enforced consistently. These communities are less likely to have financial problems or sudden, unpredictable changes in fees.
  • Stable Financials: A well-managed HOA should have a solid financial foundation, with sufficient reserves for repairs and emergencies. Properties in communities with regular financial audits and transparent budgets are usually lower risk.
  • Strong Property Values: Communities where homes are well-maintained and property values are stable often signal that the HOA is doing its job of maintaining common areas and enforcing regulations.
  • Professional Management: HOAs that use a professional property management company tend to be more organized and responsive. They usually have better systems in place for communication, maintenance, and conflict resolution.
  • Active Community Participation: An HOA with active, engaged homeowners and a diverse board is more likely to make balanced decisions and act in the best interest of the entire community.
  • Large Communities: Shared maintenance expenses—such as for community pools which have similar cost structures no matter the size of the community—are lower per homeowner, as they can be spread across a greater number of residences

MacHale adds:

Single family homes are the safest in terms of assessments as your home is not attached to the common areas. The larger the community, the more economy to scale you have in the maintenance of the community—it costs the same amount of money to clean a 25 X 40 foot pool with 10 homes as it does 1000 homes.

 

Signs of Well-Managed Communities

When evaluating an HOA and its community, look for these indicators of good management:

Model homes in a new HOA community in Southern California

 

Financial Transparency and Stability

  • Reserves Fund: A well-managed HOA should have an adequate reserve fund to cover large-scale repairs and unexpected expenses, such as roof replacement or road maintenance. Ask to see their most recent budget and reserve study.
  • Timely Fee Payments: Check if the HOA consistently collects fees on time. If there are frequent delays or collection issues, it could be a sign of poor management.
  • Regular Audits: A transparent HOA will undergo regular financial audits and provide the results to homeowners. This ensures accountability and proper allocation of funds.

 

Clear and Reasonable Rules

  • Comprehensive CC&Rs: The community’s Covenants, Conditions, and Restrictions (CC&Rs) should be clear, consistent, and reasonable. They should cover essential topics like property maintenance, architectural guidelines, noise restrictions, and parking regulations.
  • No Overbearing Restrictions: A well-run HOA doesn’t impose unreasonable restrictions (e.g. banning all pets, or imposing extreme landscaping rules). Homeowners should feel they have some freedom over their property while maintaining community standards.
  • Enforcement Consistency: A good HOA enforces rules consistently, but also fairly. They should give homeowners a chance to resolve issues before taking action, like issuing fines.

 

Effective Communication

  • Responsive Board and Management: A well-run HOA will be responsive to homeowner concerns and maintain clear lines of communication. They should have regular meetings, newsletters, and online portals for updates.
  • Regular Meetings: HOAs that hold monthly or quarterly meetings allow homeowners to stay informed and voice concerns. Check if meeting minutes are posted publicly and whether board members are accessible.
  • Clear Conflict Resolution: Effective conflict resolution processes should be in place, both for disputes between neighbors and between homeowners and the board.

 

Maintenance of Common Areas

  • Regular Upkeep: The community should be visibly well-maintained. Well-kept streets, parks, and common areas indicate a responsible HOA that prioritizes the neighborhood’s appearance and functionality.
  • Timely Repairs: A good HOA will address maintenance issues, such as broken fences, damaged roads, or malfunctioning streetlights, promptly.
  • Landscaping and Aesthetic Consistency: Proper landscaping management and consistent enforcement of exterior home maintenance will preserve the community’s aesthetic and property values.

Well-kept HOA community pool

MacHale recommends checking for these additional items:

  • No lawsuits or special assessments
  • A reserve funding level at or above at least 70%
  • Steady, but reasonable increases in the annual budget
  • Newsletters that are inviting
  • Community functions have strong, consistent attendance
  • Well-maintained common areas and amenities: clubhouse, pool, furniture, flooring, carpeting
  • Neighbors love where they live.

While investigating any HOA association, MacHale stresses the importance of keeping the following in mind throughout the process:

First and foremost, know what you’re buying into—an HOA is a private corporation with their own set of rules, regulations, and operations. Though it is not a government entity—it operates in the spirit of a privatized government, and many of the rights you have as a citizen are not necessarily afforded to you in an HOA.

MacHale also calls out these two key areas of HOA policies that warrant thorough review:

  1. The Actual Rules: She states:

    “Check the rules and regulations to make sure they are ones that you can live with. Don’t just read the CC&R’s, read the actual rules and regulations, as CC&R’s often give the Board a lot of leeway in deciding R&R’s. Do not make a purchase thinking you can change the system, or the board’s mind, once you’re there.”

  2. Architectural Guidelines: check the Architectural Guidelines to determine if they are overly restrictive. MacHale comments:

    “Some communities actually require an application and approval to change seasonal flowers, or to place a pot on your patio, where others are more lax. If you’ve always dreamed of that large children’s play structure, or an outdoor pizza kitchen, make sure the documents allow for these types of things.”

Well-landscaped side yard of a zero lot line home in an HOA community

A well-landscaped side yard of a zero lot line home in a new HOA community in Southern California

 

5 Types of Red Flags to Watch Out For

Even if a property seems ideal, there are still red flags to look out for that could indicate that the HOA is poorly-managed, or that the community is experiencing underlying problems. Being thorough in your research can help you avoid unpleasant surprises after you move in.

MacHale explains why newer communities can also be challenging to spot red flags:

Some red flags are easy to see—community amenities in a state of disrepair, old/outdated amenities, houses/condos that look unkept and tired. That’s the low hanging fruit, but there are other warning signs that may be less easy to spot, especially if a person is purchasing into a newer community where the cracks have not begun to show.

Here are five types of red flags to watch out for when considering an HOA community:

  1. Visual Red Flags
  2. Financial Red Flags
  3. Communication Red Flags
  4. Dispute and Litigation Red Flags
  5. Inconsistent Rule Enforcement

 

1. Visual Red Flags

  • Neglected Landscaping: Overgrown weeds, untrimmed bushes, or patchy lawns in parks or medians.
  • Poor Drainage: Lingering puddles in paths or amenities post-rain.
  • Deferred Building Maintenance: Cracks, mold, peeling paint, or stains on clubhouses or entryways.
  • Worn Amenities: Broken railings, fencing holes, leaks, or outdated/non-functional pools or gyms.
  • Trash Buildup: Overflowing bins or litter in streets and parking areas.
  • Faulty Lighting or Signage: Flickering lights, burned-out bulbs, or faded signs in walkways. Be sure to visit the neighborhood at different times of the day and week (e.g. dark evening hours to see lighting; weekend hours to see changes in parking areas).
  • Inconsistent Upkeep & Vacancies: Varying yard care levels per property, or a noticeable number of “For Sale” units.

 

2. Financial Red Flags

  • High Fees with No Clear Benefit: If the HOA fees are high but the community doesn’t appear well-maintained, there may be financial mismanagement or funds being misallocated.
  • Frequent Special Assessments: Special assessments are one-time fees levied on homeowners for significant repairs or emergencies. While they can occasionally be necessary, frequent special assessments may signal poor financial planning or neglect of necessary maintenance.
  • Reserve Studies: An HOA without a reserve fund is at high risk for financial instability, which could lead to unexpected assessments or fee increases. A reserve study should have been conducted within the last few years. Older condominiums are

On the topic of Budgets, MacHale provides the following context:

Most states require the disclosure of the annual budget, which is great, but it only gives you the current assessment and perhaps last year’s assessment. It does not give you historical data. Have assessments remained the same year after year? This is a red flag. Have assessments had sharp increases? This may, or may not, be a red flag, but it is important to know.

On the topic of Reserve Studies, MacHale adds:

The problem with reserve studies is that most potential purchasers don’t really know what they are looking at, as laws vary from state to state. Even those with strict reserve disclosures don’t necessarily provide you with a clear picture. As an example, in California, boards are required to have reserve studies every three years, but there is no requirement to actually fund the reserves – AND, a board has the right to change the numbers within the study. Therefore the funding levels may look better than they actually are. So it takes a trained eye to be able to catch these issues.

On the topic of Reserve Studies and Condos, MacHale reveals this candid advice:

Unless you really know what to look for when purchasing a condo, I always tell my friends and family—stay away, unless it is a newer condo, and then pay attention and make a plan to get out by year 15–20, at the latest, because that’s when the cracks begin to widen. Understand that this is not the case for all condos, but we have a very real situation within CIDs (Common Interest Developments) where over 70% of associations are underfunded in their reserves, so when money is low, and emergencies happen, the homeowners are often the funding mechanism.

 

3. Communication Red Flags

  • No Online Presence: In today’s world, a reputable HOA should have an easy-to-access online portal or website where homeowners can view important documents, pay fees, and receive updates. A lack of this indicates outdated management practices.
  • Lack of Transparency: If the HOA isn’t providing clear communication (e.g. no public board meeting minutes, no responses to homeowner inquiries), it may be a sign of disorganization or unaccountability.

MacHale adds:

Reading through the minutes with a critical eye can give you a good perspective of the overall operations. Does it appear that good business decisions are being made? Do you see patterns of voting blocks where it seems it’s always 3/2 votes? This can be indicative of board dysfunction. Do agenda items seem to get tabled month after month, with no decisions being made? Again, another red flag. Try to get copies of a few newsletters—the Board Briefs often give you insights. Likewise, does the newsletter have well rounded content, or are people just being yelled at for not putting away their trashcans, or not picking up after their dogs?

 

4. Dispute and Litigation Red Flags

  • Divided Board: A HOA board that frequently disagrees or shows a lack of cooperation can lead to a lack of progress on important decisions, like budgeting, maintenance, or enforcing rules.
  • Overly Aggressive Enforcement: An HOA that issues fines or enforces rules aggressively without warning, or clear cause, can create an adversarial environment. Make sure the HOA works to resolve issues diplomatically.
  • Frequent Complaints or Litigation: If current residents are frequently unhappy with the HOA (e.g. filing complaints about unreasonable enforcement of rules, ignoring maintenance requests, or treating residents unfairly), you may be walking into a dysfunctional environment.

MacHale adds:

Regarding litigation, an association typically must disclose any potential or current litigation. But this type of disclosure will not show if there is a history of litigation. Also, because of construction defect laws, purchasing into a brand new vertical development or condominium—at least in California, for example—pretty much guarantees construction defect litigation within the first few years. This is a tricky issue, as it can both help and harm an association.

 

5. Inconsistent Rule Enforcement

  • Selective Enforcement: If the HOA selectively enforces rules (e.g. ignoring violations of certain homeowners, while strictly enforcing them with others), it can create tensions and reduce trust in the HOA’s leadership.
  • Unclear Rules: If the rules aren’t clearly stated, or are excessively vague, it could be difficult to comply with them, or resolve disputes when they arise. Avoid properties in communities where the rules feel more like a moving target.

 

Final Considerations

Besides walking a prospective community at different times of the day and week, and speaking with potential neighbors, we strongly recommending keeping these three points in mind as you investigate your future HOA home:

  • Get an HOA Disclosures Package: When buying a property in an HOA community, always request the HOA Disclosure Package—also known as a resale package—which will provide crucial information such as CC&Rs, financials, meeting minutes, and any ongoing litigation or issues within the HOA.
  • Review the HOA’s Rules and Regulations: Review the CC&Rs and other governing documents carefully to ensure you’re comfortable with the rules.
  • Know Your Homeowner’s Rights: Understand the rights and responsibilities you will have as a homeowner in an HOA community. While you may be required to follow rules and pay fees, you should also have the right to fair treatment and transparency.

MacHale leaves these words of advice for anyone considering living in an HOA community:

Everything has both benefits and potential drawbacks that’s why it is so important for homeowners to pay attention and not assume that they will be taken care of if they simply pay their HOA fee each month. 

Aerial view of an HOA community in Las Vegas, Nevada

Aerial view of an HOA community in Las Vegas, Nevada

 

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