What Is a Homeowners Association?

A homeowners association (HOA) is an organization of residents from a community seeking to keep common areas in order and maintain a certain quality of living.

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A homeowners association (aka HOA) is an organization of residents from a community seeking to keep common areas in order and maintain a certain quality of living.

HOA Definition

First things first: A homeowners association, or HOA, is a group that makes and enforces the community rules that govern a building or neighborhood.

Now that we’ve got that covered, let’s consider some of the most important factors about HOAs:

How does an HOA work?

An HOA oversees a real estate development with multiple owners, such as condominiums, co-ops, townhouses, or single-family homes in a planned community.

An HOA can be run by an external HOA management company or a group of volunteers who are residents of the community. They collect monthly HOA fees that cover the maintenance and upkeep of common areas in the community.

HOAs create and enforce a residential community’s regulations and bylaws. They also handle property management issues, such as making decisions on and undertaking renovations or repairs.

What do HOA fees cover?

When you purchase a property in an HOA community, you have to pay the dues or association fees. HOA dues vary, but the national average for an HOA fee is more than $300 per month. These payments are mandatory, and residents who refuse to pay them in a timely manner can face late fees or even potential foreclosure.

HOA fees cover the maintenance of common areas such as lobbies, swimming pools, tennis courts, playgrounds, elevators, and parking lots. It can also pay for services like trash pickup, pest control, repairs, and security fees.

HOAs usually maintain a reserve fund to cover unexpected repairs and special assessments in case of a natural disaster or major improvement project.

In most cases, each resident of the community must pay the same amount in HOA fees, unless they have access to an exclusive service or amenity like a reserved parking spot.

What are HOA rules?

When you sign an HOA membership form, you agree to uphold the homeowners association rules that cover your homeownership rights and obligations. These rules are clearly outlined in the HOA’s community bylaws and CC&Rs, or Covenants, Conditions, and Restrictions. CC&Rs are officially recorded and filed with your state, which makes them legally binding.

HOA bylaws cover how the community and the association function. They outline how often meetings take place, how they are conducted, and how HOA board members are appointed.

CC&Rs can dictate things like the height of your fence and the paint color you choose for the outside of your home. They may also set rules on pet ownership, occupancy limits, handling noisy neighbors, and whether you can sublet your home to renters.

You should have received a copy of your HOA rules and governing documents during the home buying process. If you’re not sure where to find them, ask one of the board members, check with your real estate agent, or visit the association’s website.

What are the pros and cons of HOAs?

Some people love living in an HOA-governed community, while others can find the rules restrictive.


There are definite perks of living in an HOA community. Here are some of them:

  • HOA communities are often more aesthetically pleasing because the HOA enforces (or even manages) regular upkeep. Living in one takes the headache out of tasks like landscaping and snow shoveling.
  • HOAs protect property values and maintain a uniform neighborhood appearance many people enjoy.
  • HOA dwellers can enjoy shared amenities and develop a stronger sense of community at HOA-sponsored events.
  • HOAs enforce community rules and can help mediate property-related disputes between neighbors.


The HOA life isn’t for everyone – here are some downsides.

  • HOA fees mean an additional cost to your housing expenses.
  • HOAs can restrict your individuality.
  • Living in an HOA community can create unpleasant neighborhood drama when rules are violated by you or others.
  • Not all HOAs are run efficiently or managed properly. Be sure to do your homework and inquire before you buy.

HOAs, POAs, and Community Associations

These three terms are sometimes used interchangeably, but there are important distinctions between them.

A community association is a broad term that covers HOAs, condominium communities, and co-op boards. Unlike the latter two, HOAs are incorporated, which makes them subject to state laws.

Property Owners’ Associations, or POAs, also include members who aren’t necessarily homeowners in the community, such as business owners or property managers. They have an interest in bettering the community and maintaining its property values but may not currently reside in it. POAs are less regulated than HOAs.

HOAs and insurance coverage

By law, an HOA has to have a master policy, which is an insurance policy that covers common areas like a clubhouse or swimming pool. Be aware that the master policy typically won’t cover anything inside your home, including the walls and your belongings. That’s what your homeowners insurance policy is for.

HOA master policies fall under 3 categories:

A bare walls coverage master policy covers your building’s basic structure.

Here’s what it doesn’t cover:

  • Fixtures and furnishings used by all residents of your building
  • Upgrades or improvements done by your unit’s previous owner
  • Your personal property
  • Anything that’s for your use only, like counters, cabinets, and sinks

A single-entity coverage master policy protects your building’s structure, common areas, and any original (legacy) fixtures in your unit.

It doesn’t cover your personal property or any improvements made by you or a previous owner.

An all-in or all-inclusive coverage master policy covers your building’s structure, plus fixtures in your unit made by you or a previous owner. This type of policy also includes full restoration of your unit to its condition immediately prior to a covered loss. Your personal property is not covered.

The bottom line

Are HOAs good or bad? It depends on what you’re looking for in a community. If you don’t mind handling major issues yourself and prefer not to have to follow strict regulations, you may not want to live in an HOA community.

However, if you like the idea of living in a well-maintained neighborhood where you don’t have to deal with most maintenance and repairs, an HOA community could be a good fit for you.

And who knows? You may even find yourself serving on the HOA board one day, at which point you’ll see firsthand just how much hard work goes into maintaining your community and making sure it’s a pleasant place to live for everyone.

Whether you ultimately choose to buy a home in an HOA community or not, be sure to protect your property and belongings with homeowners insurance.

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Please note: Lemonade articles and other editorial content are meant for educational purposes only, and should not be relied upon instead of professional legal, insurance or financial advice. The content of these educational articles does not alter the terms, conditions, exclusions, or limitations of policies issued by Lemonade, which differ according to your state of residence. While we regularly review previously published content to ensure it is accurate and up-to-date, there may be instances in which legal conditions or policy details have changed since publication. Any hypothetical examples used in Lemonade editorial content are purely expositional. Hypothetical examples do not alter or bind Lemonade to any application of your insurance policy to the particular facts and circumstances of any actual claim.