Homeowners Association (HOA) – Things To Know

An HOA or homeowner's association is a society in a sector, planned municipal, or housing co-operative, responsible for enforcing rules and regulations for the buildings or homes as well as the residents that live in them. One can purchase a property through them in which case they are automatically enrolled into membership within the HOA’s jurisdiction and these members are obligated to pay a certain fee or dues, these are called the HOAs fees. This fee is usually paid monthly and goes towards the maintenance of the area as well as the property and any other mutual expenses needed for the upkeep of the neighborhood. If you own a condominium, these fees are typically levied, but it could also extend to one-family homes as well as some neighborhoods. This link can explain more about this.

What an HOA is All About

Having a thorough understanding of an HOA is key for any resident, neighborhood or community. The association is usually established and run by some of the residents themselves as it is best to keep it within the community, as they would know best what needs attention. These residents also have different people running different aspects of the neighborhood, for instance, there is a board of directors that governs the place, and are chosen to implement the rules and regulations and they oversee everything.

It could be you, your neighbor, the family living three houses down, and anyone who volunteers to help out or run it. When you become a member of this association, you will receive some paperwork to make things official, this will include a Declaration of Covenants, Conditions, and Restrictions (CC&Rs). From the perspective of the law, this is is spelt out as per this website: https://uk.practicallaw.thomsonreuters.com/4-580-3969?transitionType=Default&contextData=(sc. Default)&firstPage=true

It would generally contain all of the below elements in it:

  • Who the board of directors are and why they were chosen.
  • Limitations put on the development or use of the property
  • A portrayal of the property itself – the design and dimensions for instance.
  • Shared access to the property if necessary depending on the plan.
  • Every owner’s assessment obligations and any payment and billing procedures.
  • Information regarding the developer of the houses and their intent.
  • Obligations of repair and maintenance to the building by the property owner.
  • Lender protection requirements.

This CC&R lays out certain conditions for residents and homeowners about the upkeep of your property. They can be structural restrictions such as the type of fences allowed and those that aren’t allowed, the color of the house i.e. the paint, and any other aesthetic aspects of the property. This also includes parking facilities. They would also include penalty fees if the rules are not abided by. Depending on the severity of the penalties, the worst-case scenario is litigation enforced on the resident.

An In-depth Understanding About Homeowners Association Fees

HOA fees characteristically cover the expenses of preserving the building’s communal areas. These can include, but may not be limited to, swimming pools, entertainment areas, children pay fields, patios, lobbies, gardens and landscaping, staircases and elevators. In some instances, the dues mentioned in the CC&R are related to these and will cover some of these as well as the other necessary and common utilities, for instance, electricity, water, sewerage, garbage disposal, street cleaning and more. Some neighborhoods also have sports facilities and open courts for racket sports such as tennis, badminton and squash or a clubhouse for community gatherings, the maintenance of these is also included in the fees.

As a first time resident in the area, it is always a good idea to be sure you read through the regulations carefully when you receive the documents and ask for any clarifications or confusions to be cleared out for your sake. If you are not happy with anything it is always best to get it out of the way at the beginning of your residency rather than waiting for a few months. There is no set fee for every residential area and it could be anything from $100 and $700 in fees per month depending on the type of place it is and the extracurricular facilities it provides its neighbors. The rule of thumb is, the more facilities it provides, the more the monthly expenses will be.

Sometimes it is the case where the reserve funds are not managed properly and owners end up paying a hefty fee. It is highly recommended to check every number on your end of month fee statement to make sure the money you put into the membership is being distributed to those items that are listed in the CC&R and nothing extra or surprising is added which was not originally accounted for by the board of directors. Checking the efficiency of any HOA is key before buying a home with them and becoming a member. There are cases where if you as the member does not, or cannot pay the fees either monthly or on an annual basis, that the board may consider a special assessment to help you out instead of categorizing you as an unfit homeowner. They could however charge you extra fees on top, in the form of a penalty, if they find no valid reason as to why you did not pay the fees.

Other members may help in some instances to pay towards the fees however, in some extreme circumstances they may also foreclose the property and sell it, to make up for the fees, and you could be left without a home. If a member fails to send expense to the HOA, it may or may not affect the others also part of the association. The communal spaces may be affected if not paid on time and in full. To support any pointless annoyances in the long run and uphold your status in closed societies such as these, always check the papers, ask the right enquiries and pursue legal help if needed. Keeping things intact should be every member’s responsibility.