What Do Homeowners Associations Do?
A homeowners association (HOA) is an organization within a condominium or gated community that is responsible for creating and enforcing rules for residents and properties. HOAs also typically charge fees for living in a community. Regulations and restrictions about what can be done with homes often vary from one neighborhood to the next.
The Foundation for Community Association Research recently reported that approximately 22-24% of the United States population resides in private communities governed by some type of HOA. IPropertyManagement.com also estimated that by the end of 2018, there were 347,000 HOAs in the U.S., comprising 26.6 million households.
Here is a guide to homeowners associations in 2020.
What Governs Homeowners Associations?
An HOA typically has a board of governors or directors who are residents of the community and who are elected to oversee and enforce all regulations. Rules are ordinarily outlined in a document known as the Declaration of Covenants, Conditions, and Restrictions (CC&Rs). These conditions can dictate structural limitations, such as the kinds of landscapes and fences permitted, or more minor choices like the type of paint used for a property. The Declaration of CC&Rs also often explains what types of penalties are assessed for violations (e.g. fees, forced compliance, and litigation).
HOAs are also often subject to federal and/or state laws. One federal law that is most relevant to HOAs is the Fair Housing Act (FHA) of 1968, which sought to curb discriminatory practices in real estate. There’s also the Americans with Disabilities Act of 1990, which forbids discrimination against disabled individuals and that affects the operations of HOAs with common elements that are open to the public.
Virginia, for example, has its own Fair Housing Law, which has discrimination protections similar to those provided by the FHA. Housing Discrimination victims are allowed to file a complaint through the state’s Department of Occupational and Regulation or HUD within one year from the date of the discriminatory action, or a private lawsuit within two years of the action in question.
Pros and Cons of HOAs
Like virtually any governing body, a homeowners association can have both benefits and disadvantages. Here are some of the pros of HOAs:
- Enforcing community rules: Without rules, chaos can easily arise.
- Protect property values: a home’s value can be significantly changed by ensuring no part of it is damaged, especially during any type of renovation.
- Offer amenities, services, and facilities: HOAs do not only enforce rules but also often provide amenities such as landscaping and swimming pool and tennis court maintenance.
Conversely, HOAs can hold many disadvantages such as:
- Fees, dues, and assessments: According to iPropertyManagement.com, approximately $95.6 billion in fees is collected annually by HOAs in the US as of 2018. Fees also increased by 32.4% between 2005 and 2015.
- Strict regulations
- Inefficient operations/management style
How to Join a Homeowners Association
In many cases, HOA members are decided via elections among community residents. However, it’s important for you to remain involved in your neighborhood, even if you do not officially sit on the board of directors. You should regularly speak out about any concerns you may have, especially if you fear your community is likely to be hit by a natural disaster such as a flood or an earthquake. You could suggest purchasing catastrophe insurance for situations such as these. Certain HOAs may offer additional coverage as a perk for ownership, in addition to snow removal, for example.
Speak with a Real Estate Expert
Reach out to the real estate professionals at the Katie Zarpas Group in Virginia Beach for more information about HOAs and how they operate.
Before entering the luxury real estate industry in 2005, Katie Zarpas worked as an assistant film director and thus acquired many valuable connections in the entertainment business.
Katie has since earned several accolades, including the Hampton Roads Realtors Association’s prestigious Gold, Platinum, and Diamond awards. She has also been ranked as one of the top realtors in the country.
At the Katie Zarpas Group, we help clients obtain key information about listings in Virginia Beach and the surrounding areas, including Norfolk, Chesapeake, Portsmouth, and Suffolk. We strive to constantly track local real estate market trends, which means we can help you estimate your desired home’s value.