Common HOA Documents

If you are involved in an HOA or considering purchasing into an HOA community, there are a number of documents that you should familiarize yourself with. Here are a few of the most common HOA documents:

CC&Rs:

Covenants, Conditions and Restrictions: Otherwise known as CC&R’s, these are the rules that govern the neighborhood. The focus of the CC&Rs is to protect, preserve and enhance the property values in the development. Generally, the rules make sense and are easy to follow and are in place to add to the positive atmosphere of your community, yet there can be issues. It’s best to fully read and understand all rules, and to reference them on occasion.

Annual Budget Report:

All owners must receive an Annual Budget Report within 30 to 90 days of your HOA’s next fiscal year. This report should include:

An operating budget showing the estimated revenue and expenses
Summary of the association’s reserves (updated every three years)
Summary of the reserve funding plan
A statement detailing outstanding loans with a term of more than one year
Summary of the association’s insurance policies
Statements detailing:

Deferred maintenance
Plans to levy special assessments
The means by which the board will fund reserves to repair or replace major components
The procedures used to calculate reserves with respect to those major components for which the association is responsible

Statement of Cash Flows: This should explain cash flows from operating activities as well as investment income or loss
Notes to Financial Statements: Notes offering further explanation to the financial statements

Board Meeting Minutes and Newsletters:

Most HOA Boards meet once a year, but some meet more often. Some HOAs have newsletters while others share information on websites or social media accounts.

Reserve Study:

A reserve study is a planning tool to assess costs associated with capital maintenance. The study is oftentimes done by an outside entity and helps the board to anticipate and prepare for major repairs and replacements. An example could be replacing a roof, resurfacing roads, or maintaining fencing. Some home loan programs require a reserve study to ensure the organization has sufficient funds to address ongoing needs in the community.

Bank Condo Certification

Another document, oftentimes required by a buyers lender, that details the fiscal health of the HOA. These are important documents that owners, buyers and lenders take very seriously. As a stakeholder you should make sure that you are aware of how the HOA works and what documents that you are entitled to have.

Common HOA Documents