Community Association HOA Condo

A homeowners association (HOA) is a corporation that serves as the governing body of a residential community, such as a condominium, townhome or single-family development.  HOAs are created to protect the community’s property values by developing and upholding its covenants and bylaws, which define the actions homeowners may take with their properties, as well as their behavior within the community.  HOAs are often formed by real estate developers during the development and sales stages, during which they assume financial and legal responsibility and retain voting and governance rights. Association ownership and all related responsibility are transferred to homeowners at turnover, which occurs after selling a specified number of units.

Since most HOAs are incorporated, they are subject to statutes governing homeowners associations and not-for-profit corporations, as mandated by each individual state.   All community homeowners are mandatory members of the HOA, and must follow the community’s guidelines to ensure a harmonious environment and lifestyle; failure to comply can result in fines or other penalties.

An HOA’s Board of Directors is comprised of homeowners who have volunteered to stand for election to leadership or member roles.  They can also be individuals appointed by the developer to facilitate turnover and management when the community is complete.  The Board is comprised of officers, who typically include an elected president, vice-president, treasurer and secretary, as well as non-officer Board members.  Board leaders and members serve the community by making and enforcing the association’s rules and policies (see below), collecting dues and ensuring its facilities and common areas are well managed, maintained and attractive.

You automatically become a member of the homeowners association and a shareholder as a condition of purchasing a home within a common interest development (CID).  Your HOA membership entitles you to voting rights, which gives you a voice in helping to set association rules, policies and regulations that affect your community.  In addition, all association members are required to share the costs of operating and maintaining your community’s common areas, systems equipment and amenities.  These services are covered by your homeowners’ association fees or dues, which each unit owner is required to pay.  Payments are made to the association monthly, bi-monthly, semi-annually or annually, depending on the community.

HOA fees are used to pay the costs of ongoing maintenance and repairs to a community’s common areas, equipment, systems and shared amenities (see examples below).  Payments are made monthly, annually, semi-annually or quarterly, depending on the community.  As an ancillary benefit, homeowners can use and enjoy community amenities that may not otherwise be able to afford or maintain, such as swimming pools, tennis courts, gym memberships or valet services.  In addition, depending on what services are included in their HOA fees, homeowners may not have to pay separately for lawn maintenance, snow removal, cable TV, electricity and other services.

Included services can include: 

 

• Lawn care and landscaping
• Snow removal
• Water, plumbing and sewage systems
• A/C and heating systems
• Electric system and lighting
• Sanitation system
• Trash removal
• Security system and gates
• Elevator system
• Cleaning, painting and upkeep of exteriors and common areas, such as hallway walls, carpeting, clubhouse, etc.
• Pest control
• Repairs of roofs, interior roads, pipes, elevators, etc. due to age, weather conditions or other damage
• Maintenance of shared amenities, such as pool, fitness equipment, clubhouse, etc. 
• Front desk and concierge services
• Cable TV and Internet

HOA fees are also used to pay for a master insurance policy to protect the community’s building structures, exteriors and community property against damage, as well as other insurance riders and add-ons as required.  In addition, fees cover utility payments for all common areas, such as electricity, lighting, water, heating and air conditioning. 

Fiscally sound HOAs allocate a portion of homeowner dues to a special long-term reserve account to cover planned and budgeted renovations or repairs that do not occur regularly, such as repaving interior roads or replacing elevator machinery.  They also set aside contingency funds each month to cover unforeseen community expenses and emergencies.

In addition, fees are used to pay for salaries and benefits for internal management, maintenance and janitorial staff members, as well as the services of a professional community association management company to manage operations and maintenance and enforce the Board’s rules and decision.

Your association’s rules and regulations are created to protect your community’s property values, enhance its lifestyle and promote a friendly, agreeable and fair environment for residents.  While the rules may keep you from taking certain liberties pertaining to your home or community, they also prevent your neighbors from performing nuisance or disruptive actions or behavior as well.  As a homeowner, and member of your association, you are obligated to obey its rules, so be sure you fully understand them, ideally before you buy a home in the community.

Your HOA’s specific rules and policies are clearly spelled out in the Governing Documents (Articles of Incorporation, Declaration, Bylaws, etc.), which provide comprehensive information about the association’s operations, as well as the Covenants, Conditions & Restrictions (CC&Rs), which detail its policies and procedures on architectural guidelines, pets, parking, noise, amenity usage, rentals, fee schedules, non-compliance fines and much more.

Each community association is governed by its own unique rules and policies.  These are created by the Board and itemized in the Covenants, Conditions and Restrictions (CC&Rs) and bylaws, which clearly define the behavior and actions homeowners can and cannot take regarding their homes and communities.  These rules and policies are designed to protect property values by keeping the community clean, safe and beautiful, and ensuring a harmonious living environment for all residents.  The CC&Rs are enforced by the HOA's Board of Directors, or by a property management company hired by the association to uphold the Board’s decisions.  Homeowners are required to follow all of the community’s rules, even if they do not agree with them, and non-compliance can result in fines or legal action.

Lifestyle communities are built around common interests. They attract people who are interested in the lifestyle that the community promotes. Generally, the board dedicates some amount of residents’ assessment fees toward lifestyle programming, which may be carried out by volunteers, the property management team or a dedicated lifestyle director. Programming is determined by the shared vision of the community and may include everything from tennis and golf to rock climbing and hiking to wine tastings and gourmet dinners.  A community built around a golf course, with designated golf cart paths and charging stations and special course access for residents, is an example of a lifestyle community.

Sometimes, active adult communities are also lifestyle communities, but lifestyle communities can exist for all age ranges and living situations.  Lifestyle communities may be high-rises, townhomes, single-family homes or combined communities. Although most people think large suburban or semi-rural properties when they think about lifestyle communities, more are popping up in urban centers as millennial buyers reshape those centers into mixed-use areas with emphasis on a live/work/play environment.