There are a lot of factors to consider when choosing where to buy a house. How are the schools? What is the commute to and from your work? How bad is the traffic? Is it part of an HOA, POA or COA?
That last part sounds like a minor detail, but it’s a critical question to ask. Not only can community organizations like HOAs and COAs have a big impact on your quality of life in a home, but they also have a financial impact, too.
“These associations usually maintain a standard that boosts resale values and preserves community aesthetics,” says Eric Bramlett, a real estate agent and owner of Bramlett Residential in Austin, Texas. “However, they might seem restrictive to homeowners who cherish their freedom.”
What exactly are HOAs, POAs and COAs, and what could they mean for your life in a home? Here’s what you need to know.
[Condo vs. Townhouse vs. Co-Op: Which Is Right for You?]
HOAs
An HOA is a homeowners association, and as Bramlett puts it, “These guys manage rules for residential communities. They function much like a local government for your neighborhood.”
Often, HOAs are created by the original developer of a community, while in other instances, neighbors come together to form the organization. Either way, most HOAs are nonprofits and are run by a board of elected volunteers to represent the community.
As for duties, HOAs have many. They maintain common areas, handle area landscaping and keep up pools and other amenities. Their primary job, though, is to set and enforce rules that maintain the overall quality of the community, experts say.
“They set regulations and rules for the community, such as architectural guidelines, maintenance standards and noise restrictions,” says Adie Kriegstein, a real estate agent with Compass in New York. “They also have the authority to govern and maintain common areas, like parks, playgrounds and swimming pools.”
For homeowners, the upside of HOAs is that they help keep property values high, which is good when it’s time to sell your home. The downside, though, is that their rules can often be stifling. HOAs may limit what colors you can paint your home, where you can park your car and even what pets you can keep on your property. They also come with a fee and, if you violate any rules, potential fines and penalties as well.
“HOA fees can depend on the amenities available to the residents and are typically charged annually,” says Nathan Garrett, owner of Garretts Realty in Oldham County, Kentucky. “Subdivisions with pools, clubhouse, tennis courts, etc., can expect to pay more a year.”
[Read: What Is an HOA? Your Guide to Homeowners Associations]
COAs
COAs are condominium owners associations. They work much like HOAs do, only for specific condo buildings and communities — not entire neighborhoods.
“COAs are responsible for the maintenance, repairs and insurance of common elements within the building or complex,” Kriegstein says. “Homeowners can expect the COA to manage these aspects, including building exteriors, hallways, roofs and shared amenities.”
The rules under COAs can often be stricter than other community associations, real estate pros say, since much of the property is shared in condo buildings. There may be rules pertaining to noise, waste disposal, decor, bike storage, parking, pets and more.
Cost-wise, COA fees depend on the needs of the property and the exact amenities that need to be maintained, but usually, they’re more expensive than HOA and POA fees are.
“COAs generally cost more,” Garrett says. “They’re servicing and maintaining more of the property.”
[What Should You Consider When Deciding Between a Condo vs. House?]
POAs
A POA, or property owners association, is a larger-scale organization. They might oversee a specific district in an area, several communities or neighborhoods, or an entire city.
“It can encompass COAs, HOAs and also handle many different types of properties and businesses within including commercial, office, retail and more,” says Doug Weinstein, senior vice president of operations for national property management firm AKAM.
POA duties run the gamut. They may handle zoning and land use planning for an area, maintain common areas and utilities, help with economic development or even provide legislative support and lobbying for the HOAs and COAs under its umbrella. Some also coordinate with government agencies or host and plan community events, pros say.
And like HOAs and COAs, POAs also come with fees.
“POA fees are typically established by the POA itself, with different levels of membership’ dictating their fee structures spanning various categories,” Weinstein says. “For instance, there could be a distinct fee for individuals joining the POA that also have additional levels of involvement in the community, like owning a retail store.”
Do Your Research
HOAs, POAs and COAs are pretty common. In fact, according to the Foundation for Community Association Research, nearly a third of all Americans live somewhere with a community organization.
Still, that doesn’t mean they’re right for everyone. If you’re considering a home, make sure to research whether it’s subject to an HOA, POA or COA, and if it is, read up on the rules and fees you’ll be responsible for if you purchase the property.
“Due diligence is key,” Bramlett says. “These organizations influence the questions to ask, the lifestyle to expect, and, inevitably, the budgeting. Engage with board members, converse with residents, and gather as much information as possible before making your decision.”
More from U.S. News
The Guide to Buying and Living in a Co-Op
Types of Roads That Can Have a Big Impact on Home Sales
How Much Does a New Construction House Cost in 2023?
HOA, POA, COA: What?s the Difference in These Homeowner Associations? originally appeared on usnews.com
