Homeowner's Association: Pros and Cons

If you’re new to home buying and just started to browse through homes, you would most likely be encountering the term Homeowner’s Association or HOA. This pertains to an organization governing a particular community, typically managed by volunteer resident homeowners who are elected to a board. 

The main purpose of an HOA is to maintain the entire neighborhood, mostly its common areas, through fee collection and enforcement of a collective set of rules and bylaws, which varies among associations. 

It is important to understand what an HOA is before you opt to purchase a home in a community governed by one. And one of its crucial aspects to consider is, of course, its pros and cons. Here’s a list of what you should weigh to help you in your decision. 

Pros

1. Reduced Responsibilities - Your community will be cleaned and well-maintained, with minimal effort on your end, since some services are handled by the association. 
2. Exclusive Amenities - You typically enjoy access to amenities such as a swimming pool, tennis court, clubhouse, gym, and/or on-site security.
3. Maintains Property Values - Maintenance and appearance of homes are typically part of the rules enforced by an HOA, which helps in stabilizing your property value. 

Cons

1. Too Many Restrictions - HOA has a lot of power over the community which can limit your decisions over your home like rentals, design schemes, or even the type of pets you want to own. 
2. Indeterminate Fees - HOA fees tend to vary drastically every month depending on the needs of the community. This can stretch an already costly monthly housing budget. 
3. Liens/Foreclosure Risk - One of the repercussions of defaulting on your HOA fees payment is a lien or your home or even foreclosure. Though this is only allowed in some areas and is only seen as a last resort, it is still something crucial to know before buying your home in a community governed by HOA.

Homeowner’s Association is just one of the aspects to be thought about when purchasing a home. When a plan to buy a home from a community governed by one is considered, it is part of the decision-making process to understand the above trade-offs. Weigh them carefully before you decide whether it’s right for you.