No two individuals have the same exact vision of the American Dream of homeownership and while some may fancy living in McMansions, others prefer the built in community feel and ease of living in either a condominium or cooperative environment. Those who prefer communal living should know that a homeowners association (HOA) is part of the package.

Mortgage Marvel defines an HOA as "A nonprofit association that manages the common areas of a condominium project or planned unit development (PUD). In a condominium development, the association has no ownership interest in the common elements. In a PUD, it holds title to the common elements of the project." Simply put, the HOA is the governing board that manages the buildings resources, plans for repairs and improvement process and is also responsible for making sure that all residents in a project follow the rules and laws to ensure peace and civility throughout the planned communities.

Advantages of Living with an HOA

Regardless of the type of property in question, the ultimate goal of an HOA is to ensure consistency in a living arrangement while leaning towards protecting property values. By doing so, the association is responsible for collecting HOA dues and laying down the local law of the land. It is because of this arrangement that many consumers have developed a love hate relationship with their HOA.

For individuals who believe that there is safety in numbers, do not want to invest the time or energy to deal with home maintenance issues and prefer planting roots in an established community, a homeowners association can provide a beacon of light. Some pros to an HOA include:

• Luxury on a Budget: HOAs are responsible for maintaining common areas and depending on the property that may include assets like swimming pools, gyms and the grounds at large.
• Cleanliness: Part of the HOA dues paid by those living in a communal arrangement are dedicated to general property maintenance and cleanliness such as maintaining building facades, cleaning common areas and snow removal.
• Peace Makers: Each type of communal living arrangement comes with its' own set of bylaws and an HOA is in charge of ensuring that all residents follow the rules. Individuals who notice violations within their community simply need to let the HOA know and they will do the dirty work.
• Property Values: While the rules implemented by the HOA may be strict, the laws can keep a property in top shape and increase the odds of keeping a property at fair market value.

Disadvantages of Living with an HOA

HOAs certainly can streamline the home owning process for many, but to do so there are many restrictive behaviors they may rely on. Some cons associated with living under an HOA include:

• Rules: Bylaws can help keep order in a community, but those who break them will certainly feel the wrath of an HOA in the form of fines and penalties. Some common bylaws of HOA managed properties include home decor (limiting color options and decorative choices), requiring certain obligations of residents (in relationship to maintaining lawn health, types of pets allowed or putting time limit on guest stays) and everything in between.
• Can Limit Renting: HOAs can limit homeowners' flexibility in terms to subletting properties. Homeowners who long to be landlords may need to have their potential tenants screened by board members plus, the association can put time limits and financial caps on the agreement.
• Homeowner Dues: Dues are monthly payment amounts that are a non-negotiable expense that is part of the living arrangement. If the payments are not paid on time or in full, legally an HOA can place a lien on the property, and if not paid, they can foreclose on a home.

How to Deal With HOAs

Prospective home buyers interested in moving into a community governed by an HOA need to conduct their due diligence on the local lay of the land before fully committing to the real estate transaction. That process involves a thorough review of the bylaws, prior to signing on the dotted line and making the personal choice to follow them to a "T" in order to avoid any complications. Additionally, if there are certain rules that seem to go against the greater good, individuals may opt to get involved in the homeowners association by attending meetings or even running for the board.