Homeowner Association - Benefits

Benefits

A HOA(Homeowners Association) provides people with shared neighborhood values, an opportunity to enforce regulations, consistent with overarching statutory constraints, to achieve a community representative of such values. In doing so, an HOA inherently restricts the rights that would otherwise exist for its members based on municipal codes. For instance, a degree of conformity is often required in exterior appearance of single family homes and there are often time limits and/or restrictions to activities generating noise.

These bylaws can be limited in various degrees by state laws, with some overriding federal judicial or statutory limits. Board members or officers are elected by the homeowners, with the ability in some states for the membership to remove board members, with some difficulty, even during term.

Homeowners Associations generally have meetings for the entire board and membership. These meetings are generally monthly or sometimes quarterly, and focus on handling the Homeowners Association's business. In some states, the meeting's minutes must by law be made available for viewing 24 hours a day online, requiring the HOA to launch or purchase a website.

Many homeowners' associations include management of a development's recreational amenities, maintained for exclusive use of its members. This can allow an individual homeowner access to a maintained pool, clubhouse, gym, tennis court or walking trail that they may not be able to otherwise afford to maintain on their own.

Each member of a homeowners' association pays assessments that are used to cover the expenses of the development. Some examples are landscaping for the common areas, maintenance and upkeep of the subdivision's amenities, insurance for commonly owned structures and areas, mailing costs for newsletters and other correspondence, employment of a management company or on-site manager, security personnel and gate maintenance, and any other item delineated in the governing documents or agreed to by the board of directors.

Some residents rate their overall experience living in a common interest development as good. A survey of 709 people by Zogby International, sponsored by the Foundation for Community Association Research, an organization created by the Community Associations Institute trade association, showed that for every homeowner who rated the overall experience of living in a homeowner association as negative, seven saw it as positive.

But another survey, conducted by a home improvement trade organization vendor, of over 3,000 people found that two-thirds found their HOAs were "annoying" or worse. 25% of those who responded had never lived in an HOA, 19% had been in a "war" with their HOA, and the remaining 56% had never had a conflict or resolved it quickly / considered it no big deal. 54% of the respondents said they would rather live with a sloppy neighbor than deal with an HOA. 24% responded positively about an HOA, and 45% responded positively or felt the HOA was a minor nuisance.

Advocates often maintain that people choose to live in HOAs, but some note that "choice" is misleading. HOAs have been mandated by municipalities for decades either directly or indirectly. This is often accomplished by conditioning plat or other approval on the creation of amenities such as roads, open areas, greenbelts, retention basins, etc. and an obligation to maintain them. In towns where such regulations exist, people who wish to purchase a home often have no choice but to live in an HOA. Whether non-HOA neighborhoods that were built in the last several decades exist depends on the location.

The imposition of an HOA accomplishes several benefits for the municipality. First, these amenities may be burdened with property taxes which would not be the case if the amenities were owned by the municipality. Thus the mandated private amenities are cash generators for the municipalities. Second, the municipalities bear no obligation to maintain the amenities given that they are owned by the HOA. On the other hand, HOA communities are exempt from taxes on certain services provided by the municipality, if the HOA is providing them instead.

In The Voluntary City, published by the libertarian Independent Institute, Donald J. Boudreaux and Randall G. Holcombe argue not in universal favor of homeowners associations, opining that they do not necessarily have advantages over traditional governments. These include the fact that the association's creator, e.g. a developer, has an incentive to set up a government structured in such a way as to maximize profits and thus increasing the selling price of the property. If a certain decision would increase the selling price of certain parcels and decrease the selling price of others, the developer will choose the option with the highest net income to itself. This will sometimes result in suboptimal outcomes for the homeowners. Jim Fedako has argued that homeowners associations are better than other forms of government, because their powers are limited by contract.