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What is an HOA?

COMMUNITY ASSOCIATION LIVING

What is Community Association?
An association is a not for profit, private organization with mandatory and automatic membership for all owners.  It is a business and must be operated like one to be successful.  As an owner, you are automatically a member of the community assocaiton and will remain so for as long as you own your home.


What is the difference between a Condominium, Homeowners Association, and a Cooperative?
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 In a condominium association, a person has individual ownership of a unit and ownership of the common areas based on a percentage assigned to the owner's unit.
·    In a home or property owner's association, a person has ownership of the home and the lot it sits on while the assocation has title to the common property.
·    In a cooperative corporation, a person owns stock in the corporation while the entire project, including common facilities and all units, is owned by the corporation.  By being a shareholder the homeowner has the right to occupy a unit.

Benefits of living in an Association
A Community Association provides amenities, services, and other conveniences to it's members.  The collective buying power of owners allows services to obtained for a lower cost, resulting in substantial savings.   Maintaining the integrity and appearance of common areas allows owners to enjoy higher standards and resale values.  These benefits are just a few of the reasons Association living has increased in popularity.

What is the Assessment?
The assessment is the periodic amount due from each homeowner to cover the operating expenses of the common area and provide for reserve funds for replacement of common facilities in future years.  The Board of Directors adopts an annual budget (provided to all owners) that actually sets the annual assessment for your home.  The assessments provide the primary source of funding for the association and, by law; are not subject to deductions.

What does the Management Company do?
A mamagement company is an agent for the Association and is tasked to act on behalf of the volunteer Board of Directors to secure and manage such services as collection or assessments, supervision of contractors, obtaininr contracted services, providing financial statements and collection reports, as well as a general clearing house for problem solving and communications with homeowners.  The manangement agent reports directly to the Board and all decisions are made by a majority vote of the Board of Directors.


ASSOCIATION GOVERNANCE

What is the Board of Directors?
The Board of Directors is elected by the Association members unless otherwise specified in the governing documents.  They manage the Association business by making decisions and setting policies.  The Board has a fiduciary responsibility that includes collecting, spending and properly budgeting funds, maintaining the integirty of common areas, upholding the community's governing documents and addressing community issues on the association's behalf.

What are Governing Documents?
Articles of Incorporation (if incorporated) - Establishes the Association as a corporation and defines its purpose, structure and powers.

Declaration; Declaration of Covenants and Restrictions; and.or Covenants, Conditions, and Restrictions (CCR) -
These are the governing legal documents that establish the existence, rights and duties of the community.  They define what you can and can't do with your poropety and may also be referred to as covenants or architectural rules/restrictions.

Bylaws -
Provides the fundamental operating guidelines for the Association.  They outline the powers and duties of the Board, the terms of the Directors, the membership's voting rights, required meetings and notices of meeting, and the principal office of the Association, as well as other specific items that are necessary to run the Association as a business.  The bylaws are a "living  document" that can be amended by certain percentage of affirmative votes of members.

Rules and Regulations -
Most associations have developed Rules and Regulations as provided for in the CC&R's and adopted by the Board of Directors. Rules are established to provide direction to the homeowners for common courtesies with regard to parking, vehicles, pets, pool use hours and other activities that occur in a community's common areas and elements.

Authority
A homeowners' association is incorporated by the developer prior to the initial sale of homes, and the Covenants, Conditions, and Restrictions (CC&Rs) are recorded when the property is subdivided.  When a homeowner purchases a home governed by an HOA, the CC&Rs are included with the deed.

Powers
Like a city, associations provide services, regulate activities, levy assessments, and impose fines. Unlike a municipal government, homeowner association governance is not subject to the Constitutional constraints that public government must abide by.  Some of the tasks which Associations carry out would otherwise be performed by local governments.  An Association can enforce its actions through private legal action under civil law.

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