What Is the Difference Between an HOA and a POA?

Discover the differences between an HOA and a POA

If you’ve searched for homes or other real estate properties, you’ve probably heard about a Homeowner’s Association (HOA) and Property Owner’s Association (POA).

There are over 350,000 HOAs in the country. Although the terms HOA and POA are often used interchangeably, the two organizations have very different functions.

What Is a Homeowner’s Association (HOA)?

Generally, a homeowner’s association is a collection of similar houses or residences in the same geographical area, conforming to the same rules and regulations. The association is responsible for drawing up and enforcing guidelines for the properties under its jurisdiction. It gives structure to the neighborhood and a sense of community to the area.

HOAs are common in housing developments and other areas where residents share amenities or common spaces like the following:

  • Gated communities.
  • Condominiums.
  • Subdivisions.
  • Private/planned neighborhoods.

Condominium buildings also have associations among unit owners. Some condos refer to their associations as a Condo Owner’s Association (COA), although some use the more common HOA. Nevertheless, COA and HOA are essentially the same.

What Are the Functions of HOAs?

Homeowner’s associations are mainly involved with enforcing rules and regulations, managing the community, and providing services such as:

  • Amenities: Some communities include a swimming pool, clubhouse, or fitness area for members.
  • Maintenance services: Services like trash removal, landscaping, and lawn care in common areas are usually part of the HOA’s functions. While each HOA may differ, fence repairs, community streets, and the condo building’s roof (in the case of COAs) are typically within the association’s purview.
  • Insurance policies: Some HOAs include insurance to cover any liabilities and repairs for public spaces.
  • Enforcement of community rules: By joining an HOA, owners are legally bound to obey its rules, provided those rules align with city ordinances.

Rules that HOAs enforce include the following:

  1. Regulations of holiday and other lawn decorations.
  2. Policies on noise control.
  3. Limits on the number of home or unit occupants.
  4. Guidelines on parking.
  5. Restrictions on short-term rentals.
  6. Standards on property maintenance.
  7. Rules on keeping pets (size, quantity limits, etc.).

Members pay a monthly or annual fee for the HOA to function and enforce its rules. According to the U.S. Census Bureau’s American Housing Survey estimates, the average monthly HOA fee across the country is $170. Many homeowners in HOAs pay less than $50 a month; however, in some luxury or high-end communities, HOAs may charge up to thousands in monthly fees.

There isn’t a standard fee for HOAs, and they can vary depending on these factors:

  • Operating expenses.
  • Location.
  • Type of property.
  • Amenities.
  • Number of properties.

If you’re in the market for a house or condo unit, it is good to know the HOA’s bylaws, financial records, covenants, conditions, & restrictions (CC&Rs).

What Is a Property Owner’s Association (POA)?

While HOAs’ functions can include rules like how many pets you can have at your house or condo unit, POAs’ functions focus more on matters affecting the whole community, like parks, businesses, clubs, events, and others. Like an HOA, members of a POA pay membership dues.

POA members can be owners of various types of properties:

  • Condos.
  • Single-family homes.
  • Townhouses.
  • Duplexes.
  • Commercial properties.
  • Other residential properties.

A POA’s areas of concern include businesses and residential properties and aren’t limited to homes. Neighborhoods and whole towns can fall under a POA’s jurisdiction. However, some POAs may focus only on a particular area, like a valley, a waterfront, or a historical place. Some may cover a golf course.

A POA can have a more extensive area of responsibility, and some HOAs may be part of its authority.

What Are the Functions of a POA?

POAs, unlike HOAs, aren’t just focused on maintaining the values of properties. They also implement the following within their jurisdiction:

  • Long-term development projects.
  • Zoning restrictions.
  • Improvement and maintenance of the aesthetic appeal of community areas.

A POA’s goal is to encourage the long-term development of a more extensive area. It represents not just the homeowners but developers as well. Unlike an HOA or COA, members don’t have to own a property in the community.

An HOA and POA’s goals may sometimes overlap, but a POA’s primary goal is to encourage the growth of businesses and industries in the area. Consequently, they may offer members and owners networking events, community education, and legal assistance.

Conclusion

HOAs and POAs are sometimes used interchangeably, but they perform different functions. For example, an HOA focuses more on aesthetics and protecting members’ properties from depreciation. Conversely, a POA encompasses a larger area and is not limited to residential properties. While some functions overlap with an HOA, a POA focuses more on long-term development, encouraging the development of businesses and industries in its jurisdiction and improving community areas.

 

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Michelle_Bellagamba

Michelle Bellagamba

Florida West Coast Real Estate

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