What is a homeowners association? If you're buying a condo, townhouse, or free-standing home in a neighborhood with shared common areas and amenities—such as swimming pools, tennis courts, parking garages, or even just the security gates and sidewalks in front of each residence—odds are high these areas are maintained by a homeowners association, or HOA.
What is a homeowners association, and how will it affect your life?
Homeowners associations help ensure that your community looks its best and functions smoothly, says David Reiss, research director at the Center for Urban Business Entrepreneurship at Brooklyn Law School.
For instance, if the pump in the community swimming pool stops working, someone has to take care of it before the water turns green and toxic, right? Rather than expect any one homeowner in the neighborhood to volunteer his time and money to fix the problem, homeowners associations are responsible for getting the job done. Think of it as similar to real estate property taxes that a homeowner pays for city and state services, except these fees go to pay for amenities and maintenance in your own planned community or condo building.