What Is an HOA? How a Homeowners Association Works

"HOA" is short for homeowners association: the organization that owns or maintains the shared parts of a planned community, collects dues from the owners, and enforces the community's recorded rules. Depending on the state and the documents, it may also be called a property owners association (POA) or a community association.

This guide covers what an HOA is in legal terms, how membership works, the documents behind it, who runs it, and which laws govern it, with links to deeper guides. State laws and community documents differ, so for your specific situation a licensed attorney in your state is the right resource. This is general information, not legal advice.

What is an HOA, in plain terms?

An HOA is a membership organization made up of the owners of homes in a particular development. It is usually set up by the developer, who records a declaration against the land before the lots are sold. From then on, whoever owns a lot is a member, and the association handles what the owners share: common areas, a budget, and the community's rules.

State statutes define it in similar ways. Florida's homeowners' association law, Fla. Stat. § 720.301(9), describes it as:

"a Florida corporation responsible for the operation of a community or a mobile home subdivision in which the voting membership is made up of parcel owners or their agents, or a combination thereof, and in which membership is a mandatory condition of parcel ownership, and which is authorized to impose assessments that, if unpaid, may become a lien on the parcel."

California's version is shorter: an association "means a nonprofit corporation or unincorporated association created for the purpose of managing a common interest development" (Cal. Civ. Code § 4080). Texas uses the term property owners' association, for an association whose membership is primarily the owners and that "manages or regulates the residential subdivision for the benefit of the owners of property in the residential subdivision" (Tex. Prop. Code § 209.002(7)).

The common threads: the owners are the members, the association manages shared property or regulates the community, and it can charge assessments. The label matters less than the substance.

Is HOA membership mandatory?

In most planned communities, yes, for as long as you own the property. Florida's definition makes membership "a mandatory condition of parcel ownership," and Texas's HOA chapter applies to associations that require "mandatory membership in the association for all or a majority of the owners" (Tex. Prop. Code § 209.003(b)). Because the obligation comes from recorded covenants that run with the land, it passes to each new owner.

A voluntary civic club or neighborhood association that owners can choose to join is a different thing; the statutes quoted here are written around mandatory membership. For why membership is usually tied to the deed and what options exist, see Can I Leave My HOA?

What does an HOA do?

Some HOAs maintain little more than an entrance sign; others run pools, gates, and private roads. Most do three things:

• Maintain common areas. Florida defines common area as "all real property within a community which is owned or leased by an association or dedicated for use or maintenance by the association or its members" (Fla. Stat. § 720.301(2)).
• Collect assessments. Dues pay for maintenance, insurance, reserves, and administration. In California's definition of a planned development, the association "maintains the common area with the power to levy assessments that may become a lien upon the separate interests" (Cal. Civ. Code § 4175(b)).
• Enforce the covenants and rules. This can include architectural approval, use restrictions, and fines.

The governing documents

An HOA's authority comes from a set of documents, often called its governing documents. Florida's definition of that term covers the recorded declaration, the articles of incorporation, and the bylaws (Fla. Stat. § 720.301(8)):

• The declaration (often called the CC&Rs). Florida defines it as "a recorded written instrument or instruments in the nature of covenants running with the land which subject the land comprising the community to the jurisdiction and control of an association" (Fla. Stat. § 720.301(4)). More in What Are CC&Rs and Are They Legally Binding?
• Articles of incorporation. The filing that creates the association as a corporation.
• Bylaws. Internal operations: elections, meetings, officers, and voting.
• Rules and regulations. Day-to-day rules the board adopts. Texas includes "properly adopted rules and regulations of the property owners' association" among an HOA's governing instruments (Tex. Prop. Code § 209.002(4)).

These documents sit beneath state and federal law, and a rule that conflicts with a statute or with the declaration may be open to challenge.

Who runs an HOA: the board and the members

The owners elect a board of directors, which Texas defines as "the governing body of a property owners' association" (Tex. Prop. Code § 209.002(2)). The board adopts the budget, hires vendors (often including a management company), adopts rules within the limits of the documents, and makes most day-to-day decisions.

Members typically keep the power to elect the board and to vote on matters the documents or statute reserve to them, such as amending the declaration. Florida defines "voting interest" as "the voting rights distributed to the members of the homeowners' association, pursuant to the governing documents" (Fla. Stat. § 720.301(13)). In a new community, the developer often holds control first; Texas recognizes a "development period" stated in a declaration during which the declarant (usually the developer) reserves rights over the development, construction, and marketing of the subdivision (Tex. Prop. Code § 209.002(4-a)).

How dues and rule enforcement work

Regular assessments are set through the budget. Special assessments cover extra costs; Texas lists, among other uses, "any construction or reconstruction, unexpected repair, or replacement of a capital improvement in common areas" (Tex. Prop. Code § 209.002(12)). Limits on increases vary by state and document; see How Much Can My HOA Raise Dues?

Florida's definition of an assessment notes that it, "if not paid by the owner of a parcel, can result in a lien against the parcel" (Fla. Stat. § 720.301(1)). In many states a lien can lead to foreclosure, subject to state-specific limits covered in Can My HOA Foreclose on My Home?

Fines for rule violations are a separate track and are often more restricted. Whether a fine is valid can depend on the rule itself, any notice and hearing the law or documents require, and state caps. See Do I Have to Pay My HOA Fine?

HOA vs. condo association vs. co-op

People use "HOA" loosely for all three, but the law often treats them differently. California lists four kinds of common interest development: "(a) A community apartment project. (b) A condominium project. (c) A planned development. (d) A stock cooperative" (Cal. Civ. Code § 4100).

• Planned development (the typical HOA). Owners usually own their lot and home, and the association owns or maintains common area (Cal. Civ. Code § 4175).
• Condominium. Each owner holds "an undivided interest in common in a portion of real property coupled with a separate interest in space called a unit" (Cal. Civ. Code § 4125(b)).
• Cooperative. A corporation holds title, and shareholders receive "a right of exclusive occupancy in a portion of the real property" (Cal. Civ. Code § 4190(a)).

Some states keep these under separate laws. Florida's HOA chapter "does not apply to any association that is subject to regulation under chapter 718, chapter 719, or chapter 721" (Fla. Stat. § 720.302(4)); chapters 718 and 719 are Florida's condominium and cooperative laws. Texas's chapter 209 "does not apply to a condominium" (Tex. Prop. Code § 209.003(d)). Which law applies turns on how the community was legally created, not the name on the entrance sign.

Which laws govern an HOA?

No single law does. An HOA operates under several layers at once:

• The state's main HOA or planned-community statute, such as Florida's Chapter 720, Part 5 of Division 4 of California's Civil Code (Common Interest Developments), or the Texas Residential Property Owners Protection Act (Tex. Prop. Code ch. 209).
• State corporation law. Florida HOAs are "governed by and subject to" the state's corporation act they were incorporated under, as well as the HOA chapter (Fla. Stat. § 720.302(5)). Most HOAs are nonprofit corporations, so nonprofit corporation law usually applies.
• Federal law, in specific areas. The Fair Housing Act makes it unlawful to discriminate on protected grounds "in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith" (42 U.S.C. § 3604(b)).
• The governing documents, so long as they are consistent with the law.

For how these layers fit together, see Which Laws Govern Your HOA? and Who Regulates HOAs? State statutes are collected in HOA Laws by State, with state guides for Florida, California, Texas, and more. Agencies, mediation programs, and other places homeowners turn are listed in HOA Help Resources.

Frequently asked questions

What does HOA stand for?

HOA stands for homeowners association. Texas law uses "property owners' association," and many documents say "community association" or POA. Texas applies its HOA chapter "regardless of whether the entity is designated as a 'homeowners' association,' 'community association,' or similar designation" (Tex. Prop. Code § 209.003(c)).

Is an HOA part of the government?

No. An HOA is a private organization, typically a nonprofit corporation or an unincorporated association (Cal. Civ. Code § 4080). Florida's definition expressly excludes "a community development district or other similar special taxing district created pursuant to statute" (Fla. Stat. § 720.301(9)). For how oversight works, see Who Regulates HOAs?

Can I opt out of my HOA?

In most planned communities, membership is a mandatory condition of owning the property, so it generally cannot be resigned while you own the home. The details depend on how the community was created and on state law; see Can I Leave My HOA?

What is the difference between HOA dues and HOA fines?

Dues (assessments) are each owner's share of the association's costs, and unpaid assessments can generally become a lien on the property. Fines are penalties for rule violations and often face more limits, such as notice requirements or restrictions on whether they can become a lien. The rules vary by state and document.

Sources

• Florida Statutes § 720.301 — Definitions
• Florida Statutes § 720.302 — Purposes, scope, and application
• California Civil Code § 4080 — "Association"
• California Civil Code § 4100 — "Common interest development"
• California Civil Code § 4125 — "Condominium project"
• California Civil Code § 4175 — "Planned development"
• California Civil Code § 4190 — "Stock cooperative"
• Texas Property Code § 209.002 — Definitions
• Texas Property Code § 209.003 — Applicability of chapter
• 42 U.S.C. § 3604 — Fair Housing Act, discrimination in housing