What is a Homeowners Association (HOA)?

California Homeowners Association (HOA)A Home Owners Association (HOA) is a collection of homeowners who, in addition to owning their own home, also have a common interest in community property. The most common examples of an HOA is in a condominium. Each member of the HOA, or home owner, owns their condo space in its entirety and an equal but undivided share of the common areas such as the pool, fitness center, streets, business center, club house, or other complex amenities.

An HOA can also be referred to as a Condo Owners Association (COA) or a Property Owners Association (POA), typically for a master plan community with large single family homes.

HOAs are governed by documents which are recorded in the county in which the property is located. These documents consist of but are not limited to the Covenants, Conditions, & Restrictions (CC&Rs), Bylaws, Articles of Incorporation, Rules and Regulations, homeowner handbook, etc.

Common examples of HOA rules and regulations are:

  • No dogs bigger than 10lbs
  • No eating in the common areas
  • Speed limit on streets within association
  • Quiet hours or restrictions on number of guests
  • No hanging lights or decorations on balconies or doors
  • No hardwood floors on upper-level condos
  • No renting your unit (or only a certain percentage of condos can be rented at once, so there is a waiting list)

Violations of certain covenants, conditions, and restrictions could result in fines or even loss of your property.

HOAs are managed by a Board of Directors which are elected by the homeowners. Typically a board of directors will oversee a management company, but some associations choose to self-manage.

Read all the condominium documents thoroughly to be sure of what you’re getting yourself into. Ask for a copy of the two most recent fiscal years and an independent third-party reserve study. Find out what the dues are and how much they can increase year to year. California only allows a 20% increase per year without a vote.

Aside from an increase in dues, an HOA can also stick special assessments on you (like for a new roof or an emergency repair). If you get into an HOA that doesn’t budget accordingly for long term expenses, you are more likely to be in a situation where you will be special assessed.

If you’re in the market for a house or condo, contact us today at 1-800-287-1808 to speak to one of our expert real estate agents. We will help you review the HOA to ensure you are making an intelligent, educated home purchase.

Ever come across some crazy off-the-wall HOA restrictions? Tell us about it in the comments section below!

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