What is a Homeowners Association (HOA)?
A Homeowners’ Association (HOA) is a legal entity created by a real estate developer for the purpose of developing, managing and selling a community of homes. It is given the authority to enforce the covenants, conditions & restrictions (CC&Rs) and to manage the common amenities of the development. It allows a developer to end their responsibility over the community, typically by transferring ownership of the association to the homeowners after selling. Generally accepted as a voluntary association of homeowners gathered together to protect their property values and to improve the neighborhood, a large percentage of U.S neighborhoods where free standing homes exist have an HOA. Most homeowners’ associations are non-profit organizations and are subject to state statutes that govern non-profit corporations and homeowners’ associations.
What is an Community Association?
A community association is a nongovernmental association of participating members of a community, such as a neighborhood, village, condominium, cooperative, or group of homeowners or property owners in a delineated geographic area. Participation may be voluntary, require a specific residency, or require participation in an intentional community. Community associations may serve as social clubs, community promotional groups, service organizations, or quasi-governmental groups.
What is a Neighborhood Association?
A Neighborhood Association (NA) is a group of residents or property owners who advocate for or organize activities within a neighborhood. An association may have elected leaders and voluntary dues. Some neighborhood associations in the United States are incorporated, may be recognized by the Internal Revenue Service as 501(c)(4) nonprofit organization, and may enjoy freedom from taxation from their home state.
What is the difference between a Homeowners Association and a Neighborhood Association?
The term neighborhood association is sometimes incorrectly used instead of homeowners association (HOA). Some key differences include:
HOA membership is mandatory generally through rules tied to the ownership of property like deed restrictions. Neighborhood association membership is voluntary or informal.
HOAs often own and maintain common property, such as recreational facilities, parks, and roads, whereas neighborhood associations are focused on general advocacy and community events.
The rules for formation of a neighborhood association in the United States are sometimes regulated at the city or state level. Neighborhood associations are more likely to be formed in older, established neighborhoods, whereas HOAs are generally established at the time a residential neighborhood is built and sold. In some cases, neighborhood associations exist simultaneously with HOAs, and each may not encompass identical boundaries.