If you’re here at this site, you most likely either own a home, are in search of one or maybe even both.  Recently, I had the opportunity to answer a question regarding the differences in dreaded HOA’s.  This term is of no importance until you become a homeowner.  Then it can become very important as I will talk about below. 

First things first, The acronym HOA stands for Home Owner’s Association.  HOA’s in a perfect world work very well.  This association was created to accomplish the task of keeping your neighborhood looking sharp and presentable.  It also is there for planing group events like a July 4th cookout, etc.  Most of the time, everything runs like a finely tuned machine regarding the HOA and the neigborhood.  But, it’s not a perfect world and there are other times HOA’s have been known to overstep their bounds in enforcing the rules.

Now that we know roughly what an HOA is and why it exists, I’m going to explain the three different versions you can subscribe to.

No HOA -  This is a neighborhood that has no HOA in place.  This means that the neighborhood can not force you to cut your lawn if it gets to high or tell you that you can’t paint your house purple with yellow polka dots if you desire.  Most neighborhoods built before 1980 don’t have Home Owner’s Assocations as this didn’t come to materialize until around this time.    Remember though, don’t blame them when your home sells for less because of the funny colors!

Voluntary HOA – This means that there is an HOA for the neighborhood, but you are not forced to have to pay dues.  Like it reads, you can participate if you want to.  I grew up in a voluntary HOA subdivison named Pitman Creek Estates in Plano.    About 50% of home owners pay their dues while the other half our slackers.  Just kidding!  It is nice though to have an organization of like minded neighbors who are looking out for the best interest of the neighborhood.  Remember, the more consistent your neighborhood is in its presentation and the better it looks, the higher the price will be when you go to sell.  The majority of neighborhoods in Plano and Frisco are voluntary.

Mandatory HOA – For the people who have a strongly negative opinion of HOA’s, this is usually why.  Mandatory means that you don’t have a choice.  By being a home owner, you have to pay your monthly dues which can be in the $100′s of dollars depending on the neighborhood.  Beyond that, if you have something that goes against the by-laws of the neighborhood like a fence that is too high or the wrong type of plants in your yard, you will be contacted.  What happens if you don’t fix it and just ignore the complaints?  Did you know they can actually foreclose on you!?  That’s not likely and rarely happens, but it shows the importance of staying in contact with the HOA should something be out of place.

My preference happens to be a voluntary HOA, because they usually do a pretty good job of showing neighborhood pride, but one or two bad apples in the bunch don’t have too much authority to make it no fun for everyone else.  Remember though, with 2/3′s of the vote, any voluntary HOA can be turned into a mandatory one.  So, wherever you are planning to move.  It would be wise to find out the long term plan of any HOA that you will be moving into.