What is a Homeowners/Condo Association? | IRS Definition of a Homeowners/Condo Association

A Homeowners Association or Condo Association is an organization formed out of homeowners within a specific development, or condo owners within a specific condominium complex, to create and enforce rules on the property. An HOA or CA (also known as an Apartment Owners Association or AOA) will have a board that oversees it, will collect dues from members, and will vote on new rules and regulations to enforce. Those purchasing houses or condos in the development will also need to become part of the HOA or CA.

An HOA operates very much like a business, and consequently needs its own EIN. Usually an HOA or CA is a non-profit business, because the board members are not allowed to profit from operations. Instead, everything goes back into the well-being of the community. However, the HOA or CA may need to store cash reserves in bank accounts for upcoming expenses, collect dues, and even hire employees, all of which requires that it have its own separate EIN and business formation documents.