A Homeowner Association (HOA) and a Property Owners’ Association (POA) sound similar and they are alike in many ways. Both group together real estate owners to manage properties in a neighborhood or area.
However, these terms should not be used interchangeably since there are significant differences between them. The focus of an HOA is solely residential, uniting residential property owners in a particular community, while a POA can govern both residential and business property – and even an entire town. Therefore, the two associations can function very differently depending on the situation.
What Is an HOA?
HOAs are typically comprised of a group of similar homes or residences in the same area that conform to a set of rules and regulations. An HOA community can be a grouping of condominiums, a subdivision of single-family homes or a "gated community." Membership in the homeowners association is mandated for these residences.
The owners of the properties are assessed monthly fees, which are used by the association for management expenses as well as maintenance. The HOA regulates common areas, such as pools, paths, golf courses and gardens, which are shared by the community.
HOA Sets Mandatory Rules for Properties
HOA rules and regulations can control a variety of different aspects of life in a community. They can dictate everything from the colors that owners can paint their houses to the number and types of pets that owners can keep on the premises.
Note that HOA rules are not the same. Every HOA has its own set of rules that governs a particular community and that residents agree to uphold. Anyone purchasing a home within a community with an HOA should be sure she understands the rules and fees involved before signing on the dotted line.
The purpose of the HOA is to make the community safe and attractive in a way that will increase the desirability of the area and raise property values. The monthly fees paid by members of the HOA community are used to cover maintenance of the property, landscaping the grounds, security matters and upkeep of a pool or other recreational features.
HOA for Condominiums
A homeowners association can include condominium owners. However, if it is made up entirely of condominium owners, it is often called a COA, or condominium owners' association. A COA operates in the same way as a HOA, but governs only condos.
Owners of condominiums share the ownership of the grounds and the building with other condominium owners. Like HOA members, COA members usually have to pay fees to pay for the upkeep and repairs on the building and common areas.
What Is a POA?
A property owners association, or POA, includes more expansive real estate holdings than an HOA, which is limited to a residential community of similar homes. A POA is not limited to the type of building or property owner that it governs, but usually includes a mix of single-family residences and businesses. POAs are interested in matters like implementing zoning restrictions, sponsoring development projects and making community areas more welcoming and attractive.
Put succinctly, POA goals are usually focused on the larger community and longer-term development intentions than an HOA. That's because they represent more than just the homeowners. In fact, a POA can include an entire town or several towns.
The goals of a POA are less oriented toward micromanaging the appearance of the structures and more toward improve local areas, development projects and even local zoning regulations. The focus of POAs is not limited to property values and community aesthetics, but looks to the long-term development of business and community.