What Is an HOA?

A community with an HOA has property that every owner shares: common areas, and in a condo parts of the building such as the roof. The association owns or looks after that property and charges every owner a share of the cost. A board of directors, elected by the owners, runs the association between meetings, and Florida and Texas both require an annual meeting of the owners.

The association's powers come from its governing documents (the declaration or CC&Rs, the bylaws and the rules) and from state law. State law also gives owners rights: open board meetings in Florida and Texas, records they can inspect within a set number of days, notice before a fine, and caps on some fees.

The California Department of Real Estate says the most common form is "the nonprofit mutual benefit corporation", and that membership "is automatic". In Florida an HOA must be a Florida corporation (s. 720.303(1)). Texas Chapter 209 applies to subdivisions where the declaration lets the association collect assessments on all or most of the property, and to associations with mandatory membership.

The Foundation for Community Association Research uses "community association" for condominiums, cooperatives and planned communities, "with the latter sometimes referred to as HOAs". By its 2025 estimates, HOAs are 58 to 63 percent of US associations, condominiums 35 to 40 percent and cooperatives 2 to 4 percent.

The difference matters because states write separate rules. Florida requires a condo budget to include reserves for items such as the roof and painting (s. 718.112(2)(f)), while an HOA budget "may include reserve accounts" (s. 720.303(6)). Texas sets a condo property insurance minimum of 80 percent of replacement cost or actual cash value (82.111), and Chapter 209 has no section on HOA insurance.

Every owner pays assessments, also called HOA fees or dues, based on the budget. In Florida each owner's share is "the member's proportional share of expenses as described in the governing document" (s. 720.308). Special assessments pay for costs outside the budget.

Late payment brings interest and fees. Florida sets 18 percent simple interest a year if the documents name no rate, and a late fee of no more than $25 or 5 percent of the installment, whichever is greater (s. 720.3085(3)). Unpaid assessments can lead to a lien and, under each state's rules, foreclosure. The HOA fees guide covers each step, and the tax guide covers what the IRS lets you deduct.

A two-unit building can have an association. The California Department of Real Estate says common interest developments "range in size from a simple two-unit development to a large complex having thousands of homes". Some state rules change with size. Florida's license rule for paid managers starts above 10 units or a $100,000 budget (s. 468.431). Florida's structural integrity reserve study and milestone inspection rules do not apply to "single-family, two-family, three-family, or four-family" dwellings of three or fewer habitable stories. In Texas, payment plan guidelines are required only in HOAs of more than 14 lots (209.0062).

The self-managed HOA guide explains how a small association runs without a management company.