Real Estate: Your guide to homeowners associations

Submitted By Richie Vraux

A homeowner's association, commonly referred to as an HOA, is an organization of community residents that establishes and enforces community property rules. Typically, HOA members reside in a condominium complex, a planned community, or a subdivision of single-family homes. Buyers who purchase a home within an HOA community automatically become HOA members subject to rules and regulations under the HOA guidelines.

What is the Purpose of an HOA?

The main purpose of an HOA is to establish community goals that benefit residents and implement rules and regulations that provide community safety. An HOA is responsible for managing the community's business affairs and budget, overseeing community projects, and maintaining communal areas for residents.

Most HOA organizations are made up of a group of board members and community residents. HOA residents usually elect a Board of Directors that includes a president, vice-president, secretary, treasurer, and auditor. The Board of Directors is responsible for enforcing community rules and regulations under HOA covenants, conditions, and restrictions.

In smaller HOA communities, the Board of Directors may appoint a property management company or onsite property manager to handle duties and collect fees from residents. State HOA laws and community regulations mandate regular meetings to discuss association policies, budget, and finances.

What are Covenants, Conditions, and Restrictions?

All HOA rules and regulations are outlined in Covenants, Conditions & Restrictions (CC&Rs), governing bylaws for HOA members. CC&Rs are legally binding documents describing guidelines on home and property modifications. Common regulations cover:

• Exterior paint colors
• Roofing types and colors
• Lawn maintenance and landscaping
• Fencing and exterior structures
• Outdoor trash receptacles
• Recreational vehicle parking
• Family pets

If homeowners don't follow CC&R guidelines, they are usually issued citations and fines by the Board of Directors. Typically, CC&Rs are given to all homeowners with their closing paperwork on the home's purchase.

What are HOA Fees?

All HOA communities have mandatory fees paid by residents to make sure there are available funds for special projects and regular maintenance. Depending on location, home values, and community amenities, HOA fees may vary significantly from $200 to $1,000 per month.

HOA fees are usually deposited into a special account and used to pay for regular landscaping and maintenance, trash pickup, shared utilities, community repairs, and homeowners' insurance that covers public spaces and amenities. Additional assessment fees may also be collected if the community experiences unexpected expenses for damages caused by natural disasters such as earthquakes, fires, floods, high winds, hurricanes, and tornadoes.

HOAs can periodically raise fees according to CC&R guidelines. Fees may be increased to cover inflation, rising operating costs, and necessary community projects to increase resident safety. If HOA fees increase, residents must be given at least a 30-day notice required by law.

What are the Benefits of an HOA?

Millions of homeowners prefer living in an HOA community rather than a privately-owned residence. For homeowners who want a lifestyle with more amenities and less home maintenance, an HOA community offers many benefits.

Because HOAs have regulations that promote a uniform community environment, most residents enjoy cleaner grounds, well-maintained structures, and manicured landscapes without the hassle of scheduling maintenance and repairs.

HOA communities also have shared amenities including swimming pools and hot tubs, barbecue grills, clubhouses, sports facilities, ponds and gardens, and walking paths. Many provide special events throughout the year such as cookouts, swim parties, dances, and holiday events.

Living in an HOA community may not fit everyone's lifestyle, but it may provide the perfect opportunity for homeowners who are searching for more free time, fewer outdoor tasks, and neighborhood activities.

This article was brought to you by Richie Vraux, Broker with Better Homes and Gardens Real Estate/The Masiello Group. If you are contemplating buying in an HOA community and have questions, call him at 207-317-1297.