Definition
An HOA is your neighborhood's management company. Think of it as a built-in property manager collecting fees to maintain common areas and enforce community standards. HOAs can be well-run or problematic—that difference affects your quality of life and property value.
Where you’ll meet it
How do I make shared living work for me?
See it in Buying a condo or townhome · Step 6About this term
HOAs maintain common areas, enforce community standards, and manage shared finances. Monthly fees fund operations. HOAs have power to levy special assessments and enforce rules.
Pro Tip
Before buying in an HOA community, review the financial statements and reserve funds. Underfunded HOAs eventually hit owners with surprise special assessments that can be thousands. Also review the rules—some HOAs are very restrictive about what you can do with your property.
Example
A 200-home HOA collecting $300/month from each owner for community maintenance.