The Power of Homeowners Associations | Blue Ridge Risk Partners

Written by Admin | Apr 8, 2026 6:52:04 PM

You’ve already considered a long list of things when buying a home. But have you researched your homeowners' association (HOA)? Your dream home can quickly become a nightmare if your HOA encroaches on your lifestyle.

Learn how HOAs work so you know what to look out for.

HOAs are Becoming More Common

According to a 2022 iPropertyManagement report:

83% of homes sold in 2021 were part of HOA communities.
53% of all homeowners live in HOA communities.
The average monthly fee for a single-family home in an HOA community is $250.
HOAs collect $103.2 billion a year from homeowners.

HOA communities are on an upward trend. They are often lucrative for real estate developers who package them as common interest communities, like vacation attractions, retirement communities or planned housing developments.

The Parts of an HOA community

An HOA consists of a few elements:

Covenants, conditions and restrictions

The covenants, conditions and restrictions (CCRs) set the HOA community’s rules and are usually enforceable in court. They describe the ownership requirements and restraints of what you can do with or on your property. CCRs intend to protect, preserve and enhance property values. They can also cause strife and anxiety if they impose strict limitations on your life.

Bylaws

The bylaws govern how the HOA operates, explaining how to run the HOA as a business. HOAs can be nonprofit or for profit. Bylaws include information ranging from board elections and responsibilities to operational procedures.

HOA

The HOA is a board tasked with representing the community’s interests and enforcing the community rules (the CCRs). Anyone can manage an HOA, but boards are usually made up of volunteer homeowners or third-party investment corporations. Who handles your HOA can make a big difference in management style and change processes.

HOA assessments

HOA assessments are monthly or annual fees homeowners must pay to the community. These are in addition to city and local taxes. Assessments go toward things like:

Pools and spas
Clubhouse use
Recreation and leisure programs
Parks and playgrounds
Sidewalks and paths
Yard waste and trash pickup
Landscaping and environmental programs
Long-term development projects
School and college district access
Staff retirement funds
Management salaries

Assessments are budgeted annually. They may increase or decrease, but they usually rise every year. Budget for HOA fees with incremental increases in mind.

Assessments are not optional; your HOA can terminate services or foreclose on your property for failure to pay.

Additionally, special assessments can be issued if they are needed to fund large repairs or improvements (such as replacing a clubhouse roof or hurricane-damaged landscaping). These are in addition to regular monthly or annual assessments.

The Power of HOAs

An HOA has the authority to enforce the rules and regulations of the community using the community rules, or “bylaws and covenants.” These rules are considered “agreed upon” since homeowners approve them through board-elected representatives.

CCRs exist apart from and in addition to local or city ordinances. CCRs and bylaws cannot discriminate against federally protected classes of people, but outside of that, they are typically self-regulated rules that can hold up in court.

CCRs provide the backdrop for a host of restrictions applied to your house and surrounding property, like:

The color of your house and roof
The type of building materials you can use (e.g., only cement board siding, shingle roofing or casement windows)
Speed limits on community-owned roads
Where you can park and for how long
Whether you can rent out your home
The number of people living in your home
Whether you can build additions to your house, including rooms and decks
Visitors and party restrictions
Noise and nuisance regulations
Moving reservations and oversized delivery notifications
The types and number of vehicles you can park or store on your property
Home business operations
Specific insurance types and policy minimums
The types of foliage, trees, edible gardens and flowers used in your landscaping
The number and types of outbuildings and structures you can have on your property
The colors of outward-facing window treatments (e.g., white only)
The number and types of pets you can have
The types of decorations and functional items you can have (e.g., mailboxes, clotheslines, outdoor lighting, seasonal decorations, satellite dishes or solar panels)
Whether you can use a grill and what type (e.g., wood, electric, gas, coal or propane)
Whether you can install hot tubs, playsets, basketball hoops or other leisure equipment

Your HOA can penalize you for not following the rules. For example, it can:

Issue tickets and fines for rule infractions
Deny or restrict your ability to appeal infractions
Sue you for breaches of contract
Foreclose on your property for failure to pay outstanding fines
Prevent the sale of your home

HOAs cannot discriminate against protected classes of people

Some HOAs require board approval of prospective buyers or tenants (something to keep in mind if you intend to rent your property). The screening process must be objective, documentable and neutral. An HOA cannot discriminate against protected classes of people or make decisions or rules based on:

Race
Color
National origin
Religion
Sex (including gender identity and sexual orientation)
Familial status
Disability
Age (with the exception of some senior living communities)

If you have experienced discrimination during the buying process, report it to the U.S. Department of Housing and Urban Development.

If you’ve experienced an unfair housing appraisal, get help from the Interagency Task Force on Property Appraisal and Valuation Equity.

Scrutinize your HOA and its parts before you buy

Buyers often forget to vet their HOAs, resulting in unfortunate consequences. Even if you’re in love with your potential home, evaluate the HOA, including:

Areas to evaluate	Questions to ask
Bylaws	What are the rules for running the HOA as a business? Is there a routine and transparent auditing process?
Cash reserves	HOAs should have a minimum balance in their accounts to handle unexpected, sizeable maintenance issues. If not, special assessments are collected from homeowners in addition to regular fees: Do they have enough cash to manage sizeable maintenance issues without issuing special assessments? Does a reputable company oversee its accounts?
Covenants, conditions and restrictions	What laws must all homeowners abide by? What’s the process to appeal infractions or change established rules?
Financial statements and goals	Who manages the money homeowners pay to the HOA? How is the cash distributed?
HOA board	How often are board elections held? What is the election process?
HOA management	Is it operated by owners or an outside management company or investment firm? Is there a fraud or complaint hotline?
Homeowners meetings	How often are meetings held? Are meetings easily accessible to all owners?
Insurance	Homeowners might end up footing the bill for a lawsuit if insurance coverage is lacking: Does the HOA have property and liability coverage for public areas? Does the HOA management and board have directors and officers insurance?

Stay informed

Review the laws and regulations before you buy. You might want to pass on the property if they seem overly restrictive or difficult to understand. If you’ve already purchased a home governed by an HOA, familiarize yourself with the various laws. Participate in homeowners meetings, stay informed about board elections and research ways to change regulations if you’re unhappy with them.

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