Tools and Education

Homeowners Associations

Homeowners Associations (HOA's) in Arizona

What is an HOA?

An HOA is a legally formed entity representing the community of homeowners, with the goal of maintaining common areas and enforcing deed restrictions. Covenants, Condition & Restrictions (CC&R's) are the "rules" by which the HOA maintains the quality and value of the overall community. There are opponents as well as proponents to living in an area with an HOA. Pro-HOA residents will tell you the neighborhood association helps to keep up their overall home value by limiting outliers from doing things like painting their homes pink with green trim (a real-life example), while others say they do not like being forced to live by rules that can seem arbitrary or impractical.

What do they do?

Homeowners pay mandatory monthly or quarterly fees to the HOA organization for the services they provide, which usually include:
  • Maintaining common area landscaping and recreational facilities (pools, tennis or sport courts, gyms, water features in the community, etc.)
  • Maintaining community meeting space for events or functions
  • Maintaining streets or gates for gated subdivisions
  • Maintaining the exterior of buildings in Condo or Town home complexes including re-painting, re-roofing and exterior building up-keep
  • Controlling deed restrictions (such as no commercial use of property)
  • Larger communities' HOA's often manage a schedule of weekly or monthly events such as festivals, teen activities, community clubs, volunteer groups, bridge, book clubs, organized sports, etc.

Examples of the CC&R's (rules) most HOA's will actively enforce:
  • No overnight parking on the street
  • Keeping landscape plants within community guidelines
  • Keeping the number of rentals within a community to a set % of overall total ownership (this % effects a potential homeowner's ability to finance a home in the community)
  • Enforcement of community architectural standards regarding the building of home additions, remodeling, alterations, etc.
  • Managing the duration of rental contracts within the community (specifying the length of a rental term to 30-days, 90-days, 6 months or longer, etc.)
  • Age-restrictions which may be part of the Deed Restrictions (i.e. Active Adult 55+ communities).

What you should do before buying into a community with an HOA?

Investigate the HOA just like you would the home you want to buy and talk to the president of the association if at all possible. The foreclosure crisis has hit HOA's particularly hard; keep in mind that if owners are not paying their mortgages, they're probably not paying their HOA dues either, which limits the overall ability of the HOA to do the work for which it was created.

  • You'll get a copy of the CC&R's (community rules) as part of your home's escrow process - Read them and make sure you're ok with their conditions and restrictions
  • Ask for a copy of the HOA budget and reserve
  • Ask what upcoming assessments they foresee such as new roofs for the entire condo complex, remodeling the recreational facilities, repainting projects
  • Ask what % of homeowners are in default with the HOA, and are they able to proceed with planned expenditures at their current budget levels
  • Ask if there is any pending litigation with the HOA
  • Ask for a history of dues increases