Many homes are part of a community that’s governed by a homeowners association, or HOA. It’s responsible for enforcing the community’s rules and regulations, which are spelled out in the restrictive covenants. Each homeowner becomes a member of the HOA when once they buy property in the community.

HOAs have several benefits. They define changes that can be made to homes and set standards for the community for things such as outside decorations, permitted noise level and fences. In theory, maintaining uniformity or at least limiting choices helps keep values higher. Also, HOAs charge dues and use them to provide amenities such as pools, tennis courts and professional maintenance of the common areas that homeowners might not be able to afford on their own. Many community residents are not even aware of their HOA and just pay their dues and enjoy the benefits.

However, some find that being governed by a HOA has disadvantages. HOA rules can sometimes be excessively restrictive. Also, the HOA also has the legal right to collect assessments beyond the regular dues for large repairs or improvements. These assessments can often be quite high. They can even levy a lien against a homeowner who has made a serious breach of the rules or not paid their dues or assessments. A lien complicates and can even prevent the sale of a home.

There is no independent oversight organization for homeowner associations and laws covering HOAs vary widely from state-to-state. North Carolina has a law titled The North Carolina Planned Community Act that requires the association hold a due process hearing before any property owner can be fined for a rules violation. And it also puts a cap on the amount of the fine. 

A HOA can be a friend and a foe, depending on the homeowner and the community. Be sure to carefully research the HOA and the restrictive covenants for the community you are interested in before you buy.