Many new homeowners find that the home purchasing process is a challenge. When you combine that with the addition of a Homeowners Association (or HOA) the process can seem downright overwhelming. Though not necessarily a secret, the world of HOA’s is largely unknown to those who aren’t involved in one. At its simplest, an HOA is an organization created to manage and maintain the common areas of a community. Typically these “common areas” consist of park spaces, pools, clubhouses, streets and roads.
HOAs may consist of single-family homes, condominiums or townhomes and are usually set up by the developer of the community. HOAs are governed by a set of rules called the CC&Rs: Declaration of Covenants, Conditions, and Restrictions. CC&Rs are used to regulate the use, appearance and maintenance of a property; in other words, CC&Rs often restrict what homeowners can do on their property. For example, this may mean a restriction on the number of pets that a homeowner may own or state that there is no parking on the street after 10 pm.
Who Comprises the HOA?
The HOA is governed by a group of volunteers who serve as the Board of Directors. Each is voted in by residents. There is a President, Vice President, Secretary and Treasurer. Sometimes the HOA will hire a third party to manage finances and/or the property itself. Oftentimes there are committees within the HOA like an Architecture/Landscape Committee, which approves changes to the appearance of a property, say if a homeowner wants to paint their front door or add an addition to their home.
There can also be special committees of concerned homeowners who have specific knowledge or interest in an area. There may be a committee devoted to investigating solar panel installation or internet provider options, things that are of interest to homeowners, but not a specific function of the HOA.
What an HOA Does
An HOA manages a building, a set of buildings or a neighborhood. The responsibilities are important and wide-ranging. They may be focused on what type of mailbox to purchase as well as how to invest reserve funds to ensure financial stabilization in the long term. They address noisy tenants, enforce the rules and decide when to act on maintenance and improvements. It is a big job whether you are managing 50 homeowners or 1,500.
When Do HOA’s Meet
Meetings vary by HOA, but most hold an annual meeting. Some meet as frequently as every month. However, a special meeting can be held if a problem arises. A member of the Board may call a special meeting or any group of owners comprising 5% of the HOA. An owner who is unable to attend a meeting should give another person a proxy, which is a written form authorizing the other person to attend and vote for the absent owner.
If provided the opportunity, it is wise to participate in an HOA as much to gain experience but also to get to know your neighbors and have a say in how your neighborhood is managed.