Are you considering your next property investment but confused about terms like ‘HOA’ and ‘POA’? Let’s clear that up together! HOA stands for Homeowners Association, and POA stands for Property Owners Association. While they might sound similar, there are key differences that can impact your experience and responsibilities as a property owner.
In this article, we’ll use our expertise as experienced HOA managers in Philadelphia to help you discover the differences of a HOA vs. POA. We’ll explore what each one means, how they operate, and the roles they play. If you’re a first-time homebuyer or a current property owner, this guide is for you.
What is An HOA?
To get you started, HOA stands for Homeowners Association. It’s an organization that manages a community of houses or condos. Typically, they have rules in place to maintain the look and feel of the neighborhood, and residents who buy property there automatically become members of the HOA and are obliged to follow the rules.
What is A POA?
A Property Owners Association (POA) acts like a community council for a broader range of property owners. It is a group that looks out for the interests of homeowners, business owners, and investors in a particular area. Their main goal is to advocate for the community’s well-being and plan for its success, rather than enforcing strict rules like an HOA. They might manage some shared areas but focus less on maintenance compared to HOAs.
6 Key Differences Between HOA and POA
Now that you’re aware of the definition of each term, it’s time for us to discuss the key differences between an HOA and a POA. Each section shows you the clear differences between each different category:
Categories |
HOA |
POA |
Purpose |
HOAs are focused on ruling and regulating the community to ensure safety, cleanliness, and maintenance. |
POA concentrates on the general maintenance of common areas and facilities. |
Scope | HOAs typically have a broad scope of control, from architectural standards to landscaping and aesthetics. | Unlike HOA, POA focuses on property rights and less on lifestyle regulations. |
Restrictions & Rules |
HOAs are known for being restrictive, with detailed rules and regulations about property modifications and use. Therefore, due diligence is recommended to ensure an HOA is aligned with your personal preferences. |
POA offers more freedom in the design and use of property, with fewer restrictions. We encourage you to ask questions about specific rules like pets and modifications. |
Membership |
In HOAs, membership is mandatory for all residents within the community. There are usually rules you have to follow and fees you have to pay to cover things. |
Being part of a POA is usually mandatory for property owners in the area, but it feels more like being part of a team. They focus more on everyone’s rights and working together to improve the community, rather than having strict regulations. |
Fees & Financial Aspects |
Fees on HOAs can include transfer fees, annual assessment fees for amenities upkeep, and significant monthly dues typically ranging from $200-$300+. Budgets cover monthly assessments, reserves, and amenities maintenance. |
Generally charges a smaller annual fee (usually under $100 to $200) for the upkeep of common areas. Special assessments may apply. However, POAs have lower overall fees compared to HOAs. |
Influence & Community Feedback |
Their rules can affect what you can do with your property. This can have a big impact on your day-to-day life and even the value of your house. That’s why it’s a good idea to do some research online, chat with realtors, and talk to your neighbors to get a feel for the HOA before you buy in. |
With a POA, things are a bit more relaxed. Their focus is on keeping the shared spaces, like parks or boat ramps, in good shape and maybe even improving them over time. Their decisions are less likely to directly affect how you use your property. |
Community Type |
Since everyone shares things like pools or playgrounds, HOAs make sure everyone follows the rules to keep things looking good and running smoothly. |
POA covers larger areas, sometimes with a mix of houses, businesses, or even vacant lots. It’s less about matching paint colors and more about keeping the whole area thriving. |
4 Benefits of HOAs
Now that you know the key differences between HOAs and POAs, you might be wondering how both can benefit you differently. Here is how you can benefit from HOAs:
- Resale Value: Homes within HOAs can often have higher resale values. The maintenance standards implemented by your HOA can make the community more attractive to potential buyers.
- Dispute Resolution: HOAs often provide processes for resolving disputes between neighbors, such as issues related to property boundaries, noise complaints, or shared resources, which can create a more harmonious living environment.
- Community Engagement: HOAs frequently organize social events, clubs, and activities that can help residents meet each other and build a sense of community.
- Enhanced Amenities: Beyond basic amenities, some HOAs offer premium facilities like fitness centers, spas, golf courses, and private parks, which might not be feasible for an individual homeowner to have access.
4 Benefits of POAs
While Homeowners Associations (HOAs) often come with stricter regulations, Property Owners Associations (POAs) offer their own set of advantages. Here are the benefits of POAs:
- Flexibility in Property Use: Without the strict controls typical of HOAs, property owners in a POA enjoy greater freedom to use and modify their property.
- Lower Cost of Living: With lower annual fees and fewer assessments, living within a POA can result in a lower overall cost of living.
- Community Improvements: POAs often focus on improvements and maintenance that benefit the broader area. This includes roads, parks, and community facilities, which can enhance the overall living experience for all residents.
- Community Engagement and Representation: POAs serve as a platform for residents to participate in decision-making processes that affect the community. Members can attend meetings, vote on important issues, and serve on the board or committees.
How to Find Out If Your Home Is Governed by an HOA or POA
Let’s break it down into simple tips to find out if your home is governed by a Homeowners Association (HOA) or a Property Owners Association (POA).
Review Your Property Documents
When you bought your home, you should have received a bunch of documents, including the deed, the title, and potentially a pile of other papers detailing everything about your property. Look through these documents for any mention of an HOA or POA. This is usually mentioned in the deed or a separate covenant or agreement document.
Note: Do not even buy a home without knowing if what you bought belongs to an HOA or a POA.
Check Your Mail
If your home is governed by an HOA or POA, you will receive periodic mail from them, such as newsletters, dues notices, or meeting announcements. If you have anything like that, it is a good clue that there’s an HOA or POA in place.
Talk to People, Ask the Neighborhood
Sometimes, the quickest way to find out is by asking your neighbors. Whether your community belongs to an HOA or POA, they will know about it. This can also be a great way to get a feel for how active or strict the HOA or POA is.
Be Resourceful: Search Online
Both HOAs and POAs have websites where they post information, meeting minutes, rules, and more. Try searching for your community’s name along with “HOA” or “POA” to see if anything comes up.
Contact Your Local Property Records or Tax Office
This is best when you have the time to go physically. Your local property records or tax office should have information on whether your property is in an HOA or POA. These offices keep detailed records of properties and any restrictions attached to them.
Look for Signs Around the Neighborhood
Sometimes, there are physical signs at the entrances of neighborhoods indicating that the area is governed by an HOA or POA. This method isn’t guaranteed to perfectly work every time, but it’s worth investigating or considering.
Ask Your Lawyer or Property Owner
If you worked with a real estate agent or a lawyer when you bought your home, they should know if your property is in an HOA or POA. They can provide you with the necessary documents or information.
How Bay Property Management Group Can Help
If you are a homeowner, property owner, or a real estate agent, understanding the difference between a Homeowners Association (HOA) and a Property Owners Association (POA) is crucial. For property owners like you, getting involved in an HOA community can make it difficult for you to navigate the rules and regulations of any given homeowners association. It is crucial to ask for professional help.
This is where Bay Property Management Group steps in. We focus on making this process easier, providing knowledgeable advice to make sure your rental property meets all requirements set by the Homeowners Association (HOA). Our rental management services enable landlords to focus on other important aspects of their business.
If you’re in Baltimore, Philadelphia, Northern Virginia, or Washington DC, facing challenges with Homeowners Association (HOA) matters, or want to improve your rental management approach, BMG can assist you. Contact us today to explore how our tailored services can enhance your property management experience.