What is the difference in a POA and an HOA?

They are one and the same from a practical and legal standpoint. POA stands for Property Owner’s Association and HOA stands for Home Owner’s Association. The POA abbreviation is widely used in the Myrtle Beach area. Many resort developments and condominiums consist primarily of non-owner occupied properties (vacation homes, rental properties, etc) and usually have a property owner’s association as opposed to most residential developments where the majority of the homes are owner occupied and have a home owners association.

In general, Homeowners’ associations, or HOAs and POAs, are formal legal entities created under the same state statutes to maintain and control the use of common areas, community amenities and community appearance. They often have legal authority, including the ability to foreclose, to enforce deed restrictions and other rules established by the owners or an elected board that represents the owner’s association.

What does the HOA fee cover?

The fee amount and the expenses covered vary greatly from one association to another.

In a condominium, the POA/HOA fee usually covers building insurance and exterior maintenance of the building and grounds. The fee may include water/sewer, cable TV and other utilities, services, or amenities such as a swimming pool.

In a residential or town home development the fee may only include common area maintenance and landscaping but could include other amenities as well.

The fees vary depending on the cost to the association to provide the amenities and services. Areas close to the ocean that are subject to high wind or flood conditions will have higher insurance rates. The fees will also be higher if the association maintains a lot of amenities like swimming pools, elevators, and club houses or provides additional services like security or trash pick up.

The number of owners in the association will also affect the fees. Fees may often be lower in a large association where there are more owners sharing in the total cost.

Each association is different and before you purchase a property you must get a copy of the association’s budget, covenants, current and planned special assessments, and rules and regulations. To insure you don’t get “surprised”, make all purchase offers contingent on receiving and reviewing all association documents.

HOA fees must be considered as part of your housing budget and if you are buying an investment property these fees must be factored into your cash flow and ROI analysis.