Quick Answer
A homeowners association (HOA) is a nonprofit organization that every owner in a community belongs to automatically. Owners elect a volunteer board, the board sets a budget, owners pay assessments (dues) to fund shared costs, and the association enforces the community's recorded rules. Many boards hire a management company to handle the day-to-day work.
How an HOA Gets Created
A developer usually creates the HOA before selling the first home. The developer records a set of governing documents against the land, so every buyer takes the property subject to them. The recorded declaration (often called CC&Rs) sets the rules and the assessment obligation, the bylaws set how the board and meetings work, and the articles of incorporation form the association as a nonprofit corporation. Because these are recorded, you agree to them when you buy, whether or not you read them.
Who Runs the HOA
- Owners (members). Every owner is a member and can vote on the matters the documents and state law reserve to members, including electing directors.
- The board of directors. Volunteer owners elected by the members. The board adopts the budget, hires vendors, enforces the rules and manages the association's finances.
- Officers. Typically a president, secretary and treasurer chosen by the board.
- A management company (optional). A professional manager carries out the board's decisions, but the board stays responsible for the association. See our guide to what community association management is.
Where the Money Goes
Owners pay regular assessments, and the board can levy a special assessment when the documents allow it. Typical costs include landscaping, snow removal in cold climates, insurance, utilities for common areas, management fees, legal and accounting costs, and contributions to a reserve fund for big future repairs such as roads, roofs or pools. Our guide to what HOA fees cover breaks these down.
What the HOA Can and Cannot Do
An HOA can enforce only the powers its documents and state law give it. In general:
- It can collect assessments, maintain common areas, adopt reasonable rules, review exterior changes and enforce the recorded covenants through notices, hearings and, where the documents allow, fines.
- It cannot ignore its own documents, enforce rules selectively without a basis, or take actions that state law forbids, such as discriminating against protected groups.
Collection powers differ by state and community type. In Michigan, a condominium association has a statutory lien for unpaid assessments under <a href="https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-559-208" target="_blank" rel="noopener noreferrer">MCL 559.208</a>. A non-condominium Michigan HOA generally relies on what its recorded declaration provides. In California, the Davis-Stirling Act limits foreclosure for small debts: an association generally cannot foreclose on assessments under $1,800 unless they are more than 12 months delinquent (<a href="https://california.public.law/codes/civil_code_section_5720" target="_blank" rel="noopener noreferrer">Civil Code section 5720</a>). Always check your own documents and ask the association's attorney.
Your Rights as a Homeowner
- Vote in director elections and on matters reserved to owners.
- Attend board meetings, subject to the limits in your documents and state law.
- Review the budget, financial statements and association records, following your state's procedures.
- Receive notice and a chance to respond before the association fines or penalizes you, where the documents or state law require it.
- Run for the board.
See our posts on HOA board elections and California board meeting rules.
Pros and Cons of Living in an HOA
Pros: maintained common areas, consistent appearance that helps protect property values, shared amenities and a structured way to resolve neighbor disputes.
Cons: recurring dues, rules that limit what you can do with your property, the possibility of special assessments, and a board that is only as good as its volunteers.
Questions to Ask Before You Buy
- What are the dues, and what do they cover?
- How much is in the reserve fund, and is there a recent reserve study?
- Are any special assessments planned or pending?
- What are the rules on rentals, pets, parking and exterior changes?
- Is the association involved in any lawsuit?
- Can I review the meeting minutes and the last two years of budgets?
Frequently Asked Questions
Do I have to join the HOA?
If your home is in an HOA community, membership comes with ownership and cannot be declined.
Can the HOA raise my dues?
Yes, within the limits of the documents and state law. California, for example, restricts large increases without owner approval unless procedures are followed.
Can the HOA foreclose on my home?
Only in the situations the documents and state law allow, and usually after notices and a delinquency period. Rules vary widely by state, so ask your association's attorney.
What is the difference between an HOA and a condo association?
In an HOA you usually own your home and lot, while in a condominium you own a unit and share ownership of the building. See HOA vs. condo association and HOA vs. POA vs. COA.
Who do I call with a problem?
Start with your community manager or board, in writing, and keep a copy.
How APM Helps
APM manages community associations in Michigan and California, from budgets and dues collection to vendor oversight and board meetings. See our association management services, pricing, or request a free proposal.
This article is general information, not legal advice. Laws and documents vary by community; ask your association's attorney about your situation. Last verified October 24, 2026.
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