Homeowners Association (HOA) Definition

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on June 08, 2023

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A homeowners association, or HOA, is an organization in a neighborhood, condominium, or other jurisdiction that creates and enforces rules for the residents and their properties.

Certain jurisdictions may require homeowners to become a member of the HOA and require dues, called HOA fees, typically collected monthly or annually.

The HOA uses the funds to benefit members of the HOA, such as facility upkeep of common areas.

What Does an HOA Do?

An HOA consists of a board of directors who are elected to enforce their established rules and regulations.

The "Declaration of Covenants, Conditions, and Restrictions"(CC&Rs) outlines the stipulations homeowners are expected to uphold. Examples in CC&Rs include:

  • Lawn Requirement
  • Parking Restrictions
  • Pet Regulations
  • Visitor Expectations
  • Other Maintenance Requirements (such as color of mailbox or required home upkeep)

The document of CC&Rs also outlines the penalties for violations of the rules, which may include fees, forced compliance, or litigation.

HOA Benefits

The pros of an HOA include:

  • Self-governance in case of conflict
  • Services resulting in a well-kept neighborhood or common areas
  • Upheld property values

HOA Cons

The cons of an HOA include:

  • Fees (required to run HOA)
  • Imposing of restrictive rules or inconvenient assessments
  • Poor volunteer management and inefficient spending of HOA fees

Homeowners Association (HOA) FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.

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