POA vs HOA: What’s the Difference?

In the United States, property ownership comes with some form of community management. Two of the most common types are Property Owners Associations (POAs) and Homeowners Associations (HOAs).

In this article, we’ll discuss the main differences between POA vs HOA, so you can understand how both influence your experience in a community.

Keep in mind that the information in this article is for general informational purposes only and does not constitute legal, financial, or real estate advice.

Key Points

• Scope and purpose: POAs manage larger, mixed-use communities including both residential and commercial properties, focusing on infrastructure and long-term planning, while HOAs primarily govern residential neighborhoods, maintaining aesthetics, amenities, and community standards.
• Membership and fees: HOA membership is usually automatic and mandatory for homeowners, with fees funding shared residential amenities, whereas POA membership can be optional and fees cover broader community infrastructure, often resulting in lower costs for individual owners.
• Governance and impact: HOAs have strong enforcement powers over individual properties to maintain uniformity and property values, while POAs have limited enforcement over individual homes but manage community-wide systems and business development, offering more freedom to property owners.

What Is a POA?

POA stands for Property Owners Association. It is a governing body designed to cover a wider geographic area, managing neighborhood amenities, infrastructure, and also large-scale community features. Therefore, POAs manage both residential and commercial land (e.g., residential apartment complexes and coffee shops in the neighborhood). This means that not only homeowners are part of a POA; business owners can also join it.

POAs usually oversee essential residential community systems and long-term planning and are responsible for how an entire community functions as a cohesive unit.

For example, they might be responsible for the coordination between different property types or oversee the development of commercial or mixed-use areas within a community. Because of this, POAs have more complex administrative structures than HOAs. In large-scale developments, a POA might even function as the umbrella organization that governs multiple HOAs and even COAs (which are associations designed for condominium complexes).

What Is an HOA?

HOA stands for Homeowners Associations. HOAs manage and uphold the standards of suburban neighborhoods and planned communities. They handle maintenance and financial management, enforce neighborhood standards, and collect dues from residents to fund ongoing operations.

The HOA fees are used for the upkeep of shared spaces like parks, playgrounds, fitness centers, community pools, landscaping, or even private security patrols. But that’s not all. HOAs can also restrict what you can and cannot do with your property. For example, if you want to change your home’s exterior color, you might have to confirm with your HOA if the paint color you’ve chosen complies with architectural guidelines. The same goes for fencing or lawn maintenance.

While all these specific rules and regulations can prevent the neighborhood from deteriorating and becoming inconsistent in appearance, they can also lead to disagreements because many homeowners see these regulations as an intrusion on personal preferences and freedom.

HOA vs POA: Key Differences

We’ve briefly defined both associations above. Now, let’s outline the main differences between them, so you can have a better understanding of how they influence your community experience. Why? Because over the past few decades, more communities have been developed under structured associations. Millions of Americans now live in HOA- or POA-governed neighborhoods. So, if you understand the responsibilities of each and what part they play in your life, you'll be equipped with the necessary knowledge to resolve disputes, for example.

As such, here’s a quick breakdown of the main differences between POA vs HOA, which we’ll discuss below:

Aspect

POA

HOA

Scope

Covers a broader area that can include both residential and commercial properties

Focuses on a residential neighborhood

Membership

Includes various types of property owners

Automatic for homeowners within the community

Primary Purpose

Oversees community-wide infrastructure and long-term planning

Maintains neighborhood appearance and amenities and protects property values

Governance

Often includes a more diverse board representing different property types

Managed by a resident-elected board

Fees and Assessments

Used for larger-scale services like private roads or utilities

Used for residential amenities, landscaping, and maintenance of shared spaces

Infrastructure Management

Manages major systems such as drainage and roads

Limited to small-scale amenities like pools and sidewalks

Scope and Responsibilities

Property Owners Associations oversee broader community development. Their reach extends to essential services like land use planning, infrastructure maintenance, and collaboration with developers or municipalities. They don’t care that much about individual home aesthetics, giving homeowners more freedom when it comes to home and landscape design choices, for example.

HOAs, on the other hand, are all about the appearance and harmony of residential living. Their goal is to make sure that homes meet established standards and contribute to a harmonious living environment. They also ensure that the amenities remain attractive and functional. HOAs can affect your daily life, as they set trash schedules, make decisions in terms of community facilities, and organize community events.

Financial Differences

HOA fees are used for:

• Residential amenities
• Landscaping
• Management costs
• Maintenance of shared spaces like pools

They are mandatory for all members/residents. HOA fees usually range between $100 and $400 per month.

On the other hand, POA fees cover a broader range of expenses, including those related to:

• Private road and community area repairs
• Drainage system management
• Utility infrastructure
• Large recreational facilities

Governance and Dispute Resolutions

Each association operates under a set of covenants, conditions, and restrictions (CC&Rs), along with bylaws outlining powers and responsibilities.

In an HOA, the disputes are usually between homeowners and the board. They’re often resolved through community meetings and mediation.

Property Owners Association disputes are more complex. They might involve developers, business owners, and large landholders. In these cases, all involved parties might have to deal with legal proceedings and negotiation with local authorities to solve the issue.

Membership Rules

If you buy a property that is part of an HOA community, you automatically become a member of that HOA. In such cases, HOA membership is a must (rarely, HOA membership is optional). So, if you don’t want to be part of an HOA, you should look for communities without one or with an optional membership.

POA membership is usually optional. While some Property Owners Associations do require membership from everyone in the community, many POAs allow property owners to choose whether or not to join. This is especially common in communities where POAs manage amenities like golf courses or recreational facilities that not all residents may wish to use. Keep in mind, though, that in some states, Property Owners Associations have legal structures that mandate membership.

Rule Enforcement Authority

HOAs have significant enforcement authority over individual properties. They can also impose fines for violations. For example, they may impose fines for:

• Parking violations
• Holiday decoration violations
• Noise complaints
• Trash and recycling violations

In the case of a violation, the HOA must provide written notice describing the violation, mentioning the fine amount, and outlining the homeowner’s right to request a board hearing.

POAs have limited enforcement power. They do not fine individual property owners for violations. They focus only on shared property and community infrastructure violations rather than anything related to individual residences.

Advantages of Living in an HOA Community

• Access to enhanced amenities like swimming pools, fitness centers, and clubhouses​
• Better property value protection through enforced community standards​
• Reduced personal maintenance responsibility for common areas​
• Professional management of shared resources and facilities​
• Stronger sense of community through organized events​
• Higher resale value

Disadvantages of Living in an HOA Community

• Mandatory fees that can increase over time​
• Limited freedom to customize your property​
• Risk of special assessments for unexpected expenses​
• Potential for poor management or overly strict rule enforcement​
• Less privacy due to HOA oversight​

Advantages of Living in a POA Community

• Greater freedom to personalize your property​
• Lower fees compared to HOAs​
• Maintenance of common areas without heavy individual restrictions​
• More diverse communities with varied property types​
• Direct voice in community decision-making​

Disadvantages of Living in a POA Community

• Regular fees and potential special assessments​
• A broader geographic scope can mean less responsive governance.
• Variable quality of management across different Property Owners Associations​
• Potential resale challenges due to association fees​ or unpaid fees

How Do POAs and HOAs Affect Property Value?

It is well-known that HOAs can really help maintain property value and enforce rules. This, in turn, ensures that residential properties remain attractive for buyers. Even though HOAs impose strict regulations, these regulations are meant to keep neighborhoods uniform (a very important aspect in the real estate industry) and attract buyers who appreciate well-kept areas.

Property Owners Associations don't affect property value that much, because they impose fewer restrictions on individual multifamily or single-family residences. However, they also play a role in your chance to sell your property. They maintain shared infrastructure and ensure compliance with local zoning regulations. They play an important role in creating an organized, functional environment that benefits all property owners. Plus, POA board members oversee the development of various businesses in the area, which can also indirectly boost surrounding home values.

HOA vs POA vs COA

We've already established the main differences between HOAs and POAs. But there's a third type of association we haven't mentioned yet: the Condominium Owners Association (COA).

HOAs govern individual properties, maintain shared spaces, and enforce community rules. POAs cover a larger area that might include both residential areas and commercial developments. Condo associations, on the other hand, manage condominium buildings and complexes. The owners pay monthly fees used for maintaining and repairing common areas like hallways and elevators. Condominium associations are usually more restrictive because every resident lives in close proximity and has joint ownership in the building with other units.

How Can You Find Out if a Property Is Part of an HOA or POA?

Before purchasing a home or commercial space, try to find out if it belongs to an HOA or POA, because this will affect your community experience. Plus, membership often includes mandatory fees and adherence to strict guidelines, so you'll have to adjust your day-to-day life and finances based on that. Here's how you can find out if a property is part of an HOA or POA.

Review the Property Listing and Disclosures

Many real estate listings mention whether the property is in an HOA or POA. During the buying process, sellers are legally required in most states to disclose any association membership and related fees.

Check the Title and Deed Records

County or municipal offices maintain official land records. These documents often reference the association name or the recorded Covenants, Conditions, and Restrictions (CC&Rs) that bind the property.

Ask the Real Estate Agent or Closing Attorney

Professionals in the real estate industry can quickly verify the property’s association status and provide copies of the community’s governing documents.

Contact the Association Directly

If you know the name of the HOA or POA, you can reach out to the board members directly. Ask about fee schedules, bylaws, and details about community engagement opportunities.

FAQs

What are the disadvantages of a Property Owners Association?

Here are the disadvantages of a Property Owners Association: a POA can impose fees, assessments, and fines on property owners, and may restrict use, appearance, or modifications of property, which limits homeowner autonomy.

Do HOA board members get paid?

Generally, board members of associations like POAs or HOAs are not paid. They serve on a volunteer basis and are not paid a salary unless the governing documents explicitly allow it.

Do HOAs hurt home value?

Some HOAs can damage your resale price, especially if they have aggressive rules or financial mismanagement. In other cases, HOAs can increase home value, as they can help maintain a harmonious living environment, which attracts more buyers.

Can I refuse to join the HOA?

In most cases, you cannot refuse to join an HOA if you buy a home that is part of an HOA community: you automatically become part of it.

Is it harder to sell a home with an HOA?

It might be harder to sell a house with an HOA, especially if they have highly strict regulations. However, Homeowners Associations also have a positive impact on the neighborhood's appearance and even safety, and, in some situations, they can even help increase property value and attract more buyers.