How to start an HOA in your community: 10 simple steps

Friday January 31, 2025
Starting a homeowners' association (HOA) can be a rewarding yet complex process for those who have never done it before. And we understand the appeal of starting one on your own community, as HOAs play a significant role in managing shared spaces, implementing community standards, and maintaining property values. But figuring out how to start an HOA can seem overwhelming. How do you begin? What steps are required? And what does an HOA actually do?

This article will walk homeowners and community leaders through how to create a homeowners association, highlight its benefits, and clarify some common questions. By the end, you will have a clear understanding of how to create a homeowners association and the responsibilities it entails.
 

What is an HOA?

community members discussing how to start an hoaA homeowners' association (HOA) is an organization within a residential community or neighborhood responsible for creating and implementing rules, maintaining common areas, and upholding property standards. Typically governed by a board of directors elected by the community, HOAs collect fees from members to fund maintenance, shared amenities, and administrative needs.

HOAs can range in scope—from managing a small, gated community to overseeing large neighborhoods with recreational facilities, and landscaping.

A homeowners association (HOA) is an organization within a residential community that manages shared areas and collective interests. HOAs are typically governed by a board of elected residents and operate according to a set of governing documents, including bylaws and covenants, conditions, and restrictions (CC&Rs).
 

Why start an HOA?

Creating an HOA offers a community many benefits that can significantly enhance resident life. Some advantages to keep in mind while weighing your options include:
  • Maintain property values: Implementing consistent property standards like those found in other HOA-governed communities can help protect home values within the neighborhood.
     
  • Manage common areas: HOAs oversee the upkeep of shared spaces like parks, pools, and clubhouses. And this also helps with property aesthetics and value over time.
     
  • Increase community engagement: Beyond property management, HOAs often organize events and help neighbors build relationships. This will be a great added bonus for community bonding.
     
  • Handle disputes: HOAs help provide a structure for resolving disagreements among residents fairly and transparently. They can serve as a middle, neutral grounding partner for the parties involved.
     
  • Access to group services: Through collective agreements, HOAs can negotiate discounts on services like trash collection and landscaping with the use of vendors. If your newly created association partners with a professional property management company like FirstService Residential, this would not be their primary focus, as the company typically takes this off your hands.

How to start an HOA in 10 easy steps

  1. Gather community interest

    Speak with your neighbors to see if there’s support for an HOA. Outline potential benefits, address concerns, and gauge interest. A successful HOA begins with shared enthusiasm.
     
  2. Understand and inform yourself about local laws

    HOA rules vary by state and locality, so research the legal requirements in your area. Many states require HOAs to register as non-profit organizations, and some have specific guidelines for drafting governing documents.
     
  3. Form a group of dedicated residents

    If you identify neighbors who are equally committed to starting an HOA, this group can then help take the lead on the starting process, gather input from others, and help coordinate with the wider community.
     
  4. Define objectives

    You also have to clearly establish what the HOA aims to achieve. New proposals require reasoning, so this will help gather more traction for the creation of an association within your property. Some common goals you can include are maintaining property values, organizing community events, and managing collective services.
     
  5. Find legal help and draft governing documents

    Work with an HOA attorney to create the HOA's foundational documents, such as:
     
    • Articles of Incorporation outlining the HOA’s basic structure.
       
    • Bylaws describing how the HOA operates, including board elections and meetings.
       
    • CC&Rs detailing rules homeowners must follow, from landscaping standards to noise restrictions 

  6. Set fees and budget

    Determine the costs involved in operating your HOA within your budget. This may require some help, but you can always refer back to these later. You can consider expenses like maintenance, insurance, and utilities, reserve studies, assessments, and set membership fees accordingly. But keep in mind that transparency and communication are key when presenting the budget to homeowners.
     
  7. Elect a board of directors

    Appoint a board responsible for running the HOA. This can include the initial group you had began with, but elections are always important to establish a fair process. Positions typically include a president, treasurer, and secretary. Be sure to follow the election procedures outlined in your bylaws.
     
  8. Register your HOA and communicate your progress

    File the necessary paperwork with your state to officially register the HOA. Once that’s complete, keep homeowners informed with updates on progress, goals, and initiatives.
     
  9. Hire a professional property management company

    Partnering with a professional property management company like FirstService Residential means you're supported by a team that truly understands your community's needs. With expertise, resources, and a commitment to simplifying complex challenges, we’ll handle the details so you can focus on what matters most—your community's success.
     
  10. Enjoy simplified community living

    With FirstService Residential by your side, you can experience life, simplified. Our service-first approach streamlines the day-to-day tasks of property management, bringing clarity, peace of mind, value-added services, and genuine care for the residents and board members we serve. We’re here to help you create a thriving community with ease.

Frequently asked questions

Can an existing neighborhood start an HOA?

Yes, it’s possible to start an HOA in an established neighborhood. Even if it often requires a majority vote from homeowners, depending on local laws. It's important to remember that like many new innovations, processes, and developments, this process can take time and effort, especially if there's resistance from residents.
 

Do all community members need to join the HOA?

Whether or not all your community members join the HOA, this depends on your local laws and the HOA's structure. Take these two types as example:
  • Voluntary HOA: Membership is optional, and fees typically apply only to those who join.
     
  • Mandatory HOA: All homeowners in the community are required to participate and pay dues.
A voluntary HOA may work well for some neighborhoods, but a mandatory HOA provides the resources to maintain shared amenities and enforce rules.
 

Who creates HOA rules?

Rules and regulations are typically established by the initial governing body or board of directors during the HOA formation process. Over time, homeowners may propose changes or additions, which are usually voted on by the association members.
 

How much are HOA fees?

HOA fees can vary widely depending on neighborhood size, the range of amenities, and operating costs. On average, HOA dues range from $200 to $300 per month, though fees can be higher in communities with extensive facilities or premium services.
 

What happens if you don’t pay HOA dues?

Failure to pay HOA dues can result in penalties, late fees, or legal action. Some HOAs even have the authority to place a lien on your property until dues are paid.
 

Why do HOAs have so much power?

HOAs derive their authority from governing documents like CC&Rs, which homeowners agree to follow when purchasing property in the community. These agreements are legally binding and give the HOA the right to enforce rules.
 

Does an HOA lien affect your credit score?

Yes, an HOA lien can have an impact on your credit score. It’s considered a serious delinquency by credit bureaus, so it’s important to resolve any unpaid dues promptly.
 

Can you be kicked out for not paying HOA fees?

While an HOA cannot evict homeowners, they can take legal action, such as foreclosing on the property if dues remain unpaid for an extended period.
 

Take the first step in starting an HOA

Starting an HOA requires thoughtful planning, collaboration, and perseverance, but the rewards—like a cohesive community and well-maintained properties—are well worth the effort.

If you’re ready to take the first steps, gather your neighbors, research local laws, and consult with a knowledgeable attorney to provide a smooth process. Then, contact a member of our team at FirstService Residential to learn how a professional management company can provide additional support to your community.
 
Friday January 31, 2025