HOA vs POA, what's the difference?

HOA vs. POA

It is sometimes wrongly assumed that Home Owners Associations (HOAs) and Property Owners Associations (POAs) are the same thing. Although both organizations are in the real estate industry, they are very different from one another. 

Many HOAs govern communities of single-family homes, such as condominiums, subdivisions, or even gated communities. These are organizations whose members must reside within their boundaries. A homeowners' association manages and develops common areas by charging homeowners monthly fees. For example, trees are trimmed in the community. Home upgrades or repairs are often included in HOA agreements. The roof on a condo, for instance, may need to be repaired. As mentioned earlier, the HOA would be responsible for handling and paying for these services.

Rules are usually determined by homeowners associations. HOAs often impose restrictions on what colors a home can use on the exterior or how frequently its lawn can be mowed. They strive to establish a standard for what homes look like and how they blend into their surroundings. As much as possible, they strive to see the entire community as one. HOAs regulate the same type of buildings, such as single-family homes, condos, and apartment complexes. A home's exterior is usually under their jurisdiction, though they focus on the aesthetics and property values of their community. As the HOA provides information about the neighborhood and may welcome a new homeowner, it has a social function as well. 

What is a Property Owner's Association (POA)?

POAs do not restrict themselves to governing certain properties or buildings. A POA is usually a mix of properties including single-family homes and businesses, unlike an HOA, which is about a community of the same properties. Also, POA objectives differ greatly from HOA goals. Some POAs are all about educating the community about real estate or a certain sector. Answering real estate questions from community members, or posing questions to community members, is part of their duties. Most of them focus on local areas, development projects, and even zoning regulations rather than what color to paint your house. 

An important takeaway from a POA is that it is focused on the long-term future of the community. In contrast to a homeowner association, these associations represent more than just homeowners, though sometimes their responsibilities mimic those of a homeowner association. Often the territory of a POA encompasses an entire town or even several towns. The focus may also be on a particular section of a city, like the historic district or the waterfront area. But, for the most part, their focus goes beyond property values and community aesthetics and into the long-term development of business, community, and overall property value. 

Who owns the property?

Property ownership can also give a clue to the type of entity involved. A homeowners' association owns or does not own the land where a single-family home sits. Spec homes are becoming more popular. Spec homes are houses built on properties that the owners do not own. In these types of developments, land is owned by the developer, but a condo is owned by the homeowner. A POA might also oversee an area in some cases. Again, it depends on how the group is organized and what types of buildings fall within its jurisdiction. Gated communities might also contain shops or other businesses. Individuals or HOAs can own those businesses. In POAs, property ownership is almost always held by the owner of the building.

Conclusion

HOAs and POAs differ primarily in property ownership and scope. Typically, POAs do not own their properties. An HOA, however, may or may not own the land on which a house is located. The types of entities involved also differ. Homes are the primary focus of HOAs, while businesses and homes are the primary focus of POAs. Their goals are the last difference. HOAs primarily focus on property value and aesthetics. POAs are mainly concerned with community education regarding real estate planning, such as development. To see what can or cannot be done to your property, be sure to review your restrictive covenants or contact your association before starting any home improvements