Like living by the rules? Then a home in a community governed by a homeowners association (HOA) could be the place for you. If you’re not a fan of being told what you can and can’t do with your residence, an HOA is probably not going to suit your style.

There are lots of pros and cons regarding HOAs. So it’s important to know what you’d be getting into if you’re interested in an HOA community, whether it’s a condo, townhouse, multiunit, or single-family-home neighborhood. Over-55 and golf course/country club communities are also typically governed by an HOA, which often employs a property-management firm to oversee day-to-day operations.

What are CC&Rs? 

First and foremost, all HOAs are governed by what’s known as its covenants, conditions, and restrictions (CC&Rs). These cover pretty much everything that is required of homeowners, down to the color of roof tiles, exterior paint, mailboxes, window coverings, front-yard landscaping, and patio-wall decorations. Deviate from any of the rules and you could be subject to warnings, fines, and possibly lawsuits. You might not be allowed to park vehicles in front of your home overnight, or work on your car in the driveway. And you’ll probably be expected, if you’re in a single-family-home community, to keep your front yard looking tidy and trimmed at all times.

It helps to remember that an HOA’s goal is to keep the neighborhood looking pleasant so all homes retain their value. Click To Tweet

A lot depends on how strict the current HOA board is. Board members are elected by residents who are interested enough to vote them in, so it pays to research the candidates before casting your ballot (term limits vary from HOA to HOA). Your real estate agent should be able to obtain a copy of the CC&Rs for you and explain anything you don’t understand. If you do move in, keep a copy on hand and refer to it frequently so you’ll always know what to expect. It helps to remember that an HOA’s goal is to keep the neighborhood looking pleasant so all homes retain their value. Everyone should want it to stay desirable so potential homebuyers will be attracted to become new residents.

Common areas are a perk

One of the main functions of an HOA is to maintain the community’s so-called common areas. This can include upkeep and repair of landscaping, sidewalks, swimming pools, clubhouses, and tennis courts. It’s one of the perks of living in an HOA, but you pay for it, of course, through a monthly, quarterly, or annual fee. Sometimes the fee even includes cable TV service, water bills, and gate-guarded 24-hour security.

The HOA fee itself depends on many factors, such as the size of the community, types of amenities, location, age of structures, and number of homeowners. Click To Tweet

What does my HOA fee cover?

Do your due diligence to find out in advance what the fee covers. The HOA fee itself depends on many factors, such as the size of the community, types of amenities, location, age of structures, and number of homeowners. Sprawling developments such as over-55 communities might keep the fee as low as $100 to attract senior residents, while urban high-rises can charge well into the thousands of dollars because of the desirable location.

Don’t forget about assessments

If your community is hit with extreme maintenance expenses like retaining walls cracking or water ponding in common areas, homeowners insurance will cover some of it. Whatever’s left will have to be paid by your HOA. In these and others cases, the HOA usually will tap its reserve fund, which could become depleted as a result. So, your HOA board might require you and every other homeowner in the community to pay a special assessment bill above and beyond your monthly HOA fee. Fortunately, these assessments are typically temporary until the reserve is back up to a comfortable level.

Modifications aren’t that easy to make

Want to add a second story to your home? It might not be possible. All exterior modifications–even a relatively small one like a window awning to keep the sun out–have to be approved by the HOA. You’ll need to submit plans describing the height, colors, location, shape, and materials to the HOA board for approval. This can really slow down the process or limit the type of work you can do–and it might not even get approved.

An HOA can solve conflicts

On the plus side, the HOA can help resolve conflicts among neighbors. If someone hasn’t mowed their lawn for a while, or constantly works in their noisy wood shop with the garage door open, you don’t have to confront them because the HOA will. When anyone is engaged in activity that violates the CC&Rs, the HOA first sends a friendly notice and then follows up with a stern warning. This can sometimes get messy, but in most cases, the HOA prevails.

The HOA can help resolve conflicts among neighbors so you don't have to confront them yourself. Click To Tweet

Know the laws about HOAs

In addition to individual CC&Rs amendments, state and federal laws can be modified without necessarily notifying homeowners. Here are highlights of some changes enacted as of 2016. Again, your real estate agent is your best resource for informing you about a particular HOA’s pros, cons, and CC&Rs.

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