Definition of HOA

A homeowner association (abbrev. HOA) is an organization created by a real estate developer for the purpose of controlling the appearance and managing any common-area assets during the marketing, managing, and selling of homes and sites in a residential subdivision. It grants the developer privileged voting rights in governing the association, while allowing the developer to exit financial and legal responsibility of the organization, typically by transferring ownership of the association to the homeowners after selling off a predetermined number of lots. It allows a civil municipality to increase its tax base, but without requiring it to provide equal services to all of its citizens. Membership in the homeowners association by a residential buyer is typically a condition of purchase; a buyer isn't given an option to reject it. Some homeowner associations hire and retain property management companies. The board of directors is responsible for the retention of these companies.

Benefits of HOA

An HOA provides people with shared neighborhood values, an opportunity to enforce regulations, consistent with overarching statutory constraints, to achieve a community representative of such values. In doing so, an HOA inherently restricts the rights that would otherwise exist for its members based on municipal codes. For instance, a degree of conformity is often required in exterior appearance of single family homes and there are often time limits and/or restrictions to activities generating noise.

Homeowners Associations generally have meetings for the entire board and membership. These meetings are generally monthly or sometimes quarterly, and focus on handling the Homeowners Association's business.

Many homeowners' associations include management of a development's recreational amenities, maintained for exclusive use of its members. This can allow an individual homeowner access to a  clubhouse, Play grounds, basketball courts, tennis court or walking trail that they may not be able to otherwise afford to maintain on their own.

Each member of a homeowners' association pays assessments that are used to cover the expenses of the development. Some examples are landscaping for the common areas, maintenance and upkeep of the subdivision's amenities, insurance for commonly owned structures and areas, mailing costs for newsletters and other correspondence, employment of a management company or on-site manager, security personnel and gate maintenance, and any other item delineated in the governing documents or agreed to by the board of directors.