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Home Owners Associations (HOAs)

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Quick Takeaways

  • An HOA, or Homeowners Association, is a “group of homeowners in a defined area” which could range from a two-unit townhome, a development of condos, or an entire master-planned neighborhood of single family homes. 
  • Most HOAs are non-profits, and the money generated from them is used to upkeep the shared property including landscaping and community areas.
  • HOAs have boards, and volunteering to sit on one can work to your advantage! Not only will you become extra familiar with the rules, but you will get to know your neighbors and have a say in how your home is run.

Source: Your Guide to HOAs (U.S. News and World Report, Jan. 24, 2023)

Hiring an HOA manager is a big step in any association’s journey, and it is important to do plenty of research to figure out if a manger is right for you. If your association decides a manger is the path you want to take, finding the right management company is the next step! Make sure to ask them questions about their mission statement and philosophy on handling conflict – you will want their philosophy to closely align with yours! 

HOAs are a common part of the homebuying experience for many. Whether you are purchasing a condominium in a high rise, a townhome, or a single-family home in a master-planned or gated community, an HOA could be in your future! Homeowners associations act as governing boards to help maintain the common areas of shared living spaces. Your monthly or yearly HOA fee will often cover the cost of landscaping and routine maintenance, but make sure you familiarize yourself with the rules and regulations.

In addition to your HOA fee, which is due on a monthly basis special, assessments may be collected throughout your time in the property. Special assessments are usually levied when there is an emergency, like frozen pipes, or when a major project needs to be undertaken and the usual HOA fees will not cover it, like a new roof or a previously agreed upon addition, like a rooftop patio.

Volunteering for your HOA is a not only a great way to get to know your neighbors, but a much-needed act of service to keep your home and community running smoothly! HOAs are often run by volunteer boards and sitting on your board will give you a better insight into how your HOA is run, and allow you to be part of the important decision making!

Unfortunately, the very nature of shared living and HOAs means there is bound to be neighborly disagreements from time to time. If these disagreements escalate, an attorney will often need to get involved. Make sure your HOA rules are clear and applied evenly to every tenant. Rules also need to be reasonable, and many states have laws on the books preventing unreasonable and unenforceable laws. 

See References for more information.

Latest on this topic

Voyager Village POA v Letourneau: HOA Not Liable for Salesperson's Ads
December 7, 2012
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References

NAR Library & Archives has already done the research for you. References (formerly Field Guides) offer links to articles, eBooks, websites, statistics, and more to provide a comprehensive overview of perspectives. EBSCO articles (E) are available only to NAR members and require the member's nar.realtor login.

Should You Hire a Manager?

Calling All Small Property Landlords: When Does It Make Sense to Hire a Property Manager? (realtor.com®, Aug. 4, 2022)

“The line here is different for every property owner because each one has varying tolerances,” says Elijah Jennings, property management sales associate with Atlas Real Estate. “One owner may have the time to be a quality landlord to their residents but not the expertise to interpret and follow through with the laws surrounding this responsibility. Whereas another landlord may be up to date with all the legal responsibilities yet not have the time to follow up with resident needs.”

Should You Hire an HOA Property Management Company? (All Property Management, Jun. 6, 2022)

“Approximately 85% of homeowner associations are managed by professional management companies, and there’s a clear reason why. Hiring an HOA Property Manager is the most efficient way to build value for you and your fellow homeowners. Management companies adds value with their knowledge of industry standards as well as proven, cost-effective methods to make your association more responsive and effective in meeting your community's needs.”

20 Questions to Ask an HOA Management Company (Cedars Management)

This guide from Cedar Management Group provides 20 questions to ask a possible HOA management company. Don’t forget to ask about their fee structure, if they are licensed and insured, and their response time. To make sure they are the right fit for your association, ask about their mission statement and their philosophy on managing emergencies.

HOA Basics & Governing

9 Things to Know About Homeowners Associations (Investopedia, Sep. 12, 2022)

According to Investopedia, here are 9 things to keep in mind when getting involved with a HOA: fees from one HOA to the next vary widely, services and amenities also vary, additional fees may apply, HOA fees are taken into consideration when applying for your mortgage, take a look at the Covenants, Conditions & Restrictions (CC&Rs) in writing, prepare for conflict management, find out if your HOA has a reputation, make sure the previous owners of your unit complied, and make sure insurance is sorted. 

What is a Homeowners Association, or HOA? (Bankrate, Apr. 4, 2022)

“The term HOA stands for homeowners association. A community that’s governed by an HOA can consist of individual houses, townhouses, high-rises or condos, often within a planned community. The responsibilities of the HOA can vary based on property type — for a condo development it may oversee management of the entire property, for instance, whereas for a townhouse community, it may only be in charge of common areas.”

HOA Board vs. HOA Management Company Responsibilities (Cedars Management)

“Homeowners association management companies essentially act as advisors, not leaders. For instance, while a homeowner with accounting experience can manage the association’s finances and create reports, it is not always practical to perpetually have the same person on the board. HOA management companies employ accounting and financial managers who can help with this area.”

Collecting Assessments

HOA Homefront – How Do We Handle Delinquent Members and Delinquent Directors (The San Diego Union Tribune, May 27, 2023)

“The other type of foreclosure is judicial foreclosure, in which the HOA files a lawsuit against the homeowner asking for a judge to award money to the HOA and/or to have the property sold to pay the debt. Homeowners should not ignore foreclosure notices and should act quickly to protect their home.”

HOA Special Assessment: What is it and How to Handle it? (Rocket Mortgage, Feb, 24, 2023)

“HOA special assessments are usually only charged in the case of unforeseen emergencies when the community needs major repairs and are separate from typical HOA costs like regular dues and planned HOA assessments. Unlike other costs, special assessments usually fall outside the HOA’s yearly budget – potentially by a lot. If you’re part of a HOA community, you will likely be required to pay for special assessments when they come up, despite the fact that they were not planned.”

Who Collects Condo and HOA Fees and Assessments? What Happens to the Money? (AXELA Condo & HOA Collections, Jan. 5, 2022)

“Since most Associations are non-profit corporations, the money collected from home and unit owners’ fees and assessments are used to pay for the current and future expenses of the Association. Everything from trash removal to insurance premiums to payroll to lawn and grounds maintenance gets paid for from Association members’ HOA fees and assessments. Future expenses, too, are funded through contributions to the Reserve Fund, an interest-bearing account set aside for expected future expenses. The concept is that tomorrow’s expenses are funded with today’s contributions.”

Volunteering

5 Ways You Can Help Your HOA (Keystone Pacific Property Management, Mar. 22, 2023)

“You can have a tremendous impact on how your HOA is managed. We find that communities with engaged and involved community members tend to run more smoothly than those with strained communication or limited resident involvement. It’s in your best interest to ask yourself not what your homeowners association can do for you, but what you can do for your HOA.”

HOA Volunteer Projects: Cost-Saving or Liability in Waiting? (Western Law Group LLC, Feb. 26, 2021)

“Even if the volunteers are not being paid for their work, HOAs must be mindful of the potential liabilities that can arise from the physical or mental nature of the undertaken projects.  If an HOA allows volunteers to help with some community landscaping, for example, what are the potential repercussions should a volunteer get injured on the job or cause injury to another party?  The injured party can sue the HOA for damages, which will be both a lengthy and expensive process.  In addition, an injury to a Homeowner or the potential lawsuit stemming from it may hurt the sense of community many HOAs are striving to achieve.  Thus, an HOA Board must consider how to protect the Association from such liability if a volunteer is injured or causes injuries to another during a project.“

7 Reasons and Ways to Serve in an HOA (HOA Management, Apr. 30, 2020)

Serving on your HOA Board protects your investment, furthers your real-world education, enhances your resume, allows for creative problem solving opportunities, gives you a reason to socialize with your neighbors, helps you gain recognition, and last but not least – helps everyone out!

Legal Issues

HOA Foreclosures are a “Lose-Lose” game for Coloradoans, but These Lawyers Win Regardless of the Outcome (ProPublica, Mar. 11, 2023)

“Paymah’s experience is a case study in how even a small dispute can quickly escalate into an expensive legal fight in Colorado, where state law empowers HOAs to initiate foreclosure proceedings against homeowners who owe money to them. As Rocky Mountain PBS and ProPublica have reported, HOAs have filed thousands of foreclosure cases in recent years, in disputes stemming from as little as a $308 lien.”

Inside the Massive Alleged Fraud at the Hammocks HOA (The Real Deal, Jan. 2, 2023)

“Residents at the Hammocks, home to South Florida’s biggest HOA, had complained for years of mismanagement by association leaders and opaque financial statements. Authorities started poking into it around 2017, according to court records. It would take five years until the Hammocks leadership collapsed. In November, police arrested four ex-board members and the husband of a former board president, alleging they looted roughly $2 million from association coffers.”

HOA Ruining Your Life? 8 Unenforceable HOA Rules – and How You can Fight Back (realtor.com®, Feb. 12, 2023)

No matter how many letters or complaints you get from your neighbor, some rules are simply not enforceable via HOA. From restricting native plants to not allowing clotheslines, many states have had to put rules in place to slow down complaint-happy neighbors. Remember, all HOA decisions should be made publicly, through due process.

Find Your State HOA Laws (Homeowners Protection Bureau)

Search this portal from the Homeowners Protection Bureau to become more familiar with the Home Owners Association laws in your state.

eBooks.realtor.org

The following eBooks and digital audiobooks are available to NAR members:

The Homeowners Association Manual (eBook)

The Condo Owner’s Answer Book (eBook)

Homeowners Association and You (eBook)

Working with Your Homeowners Association (eBook)

Community Associations: A Guide to Successful Management (Audiobook, eBook)

Books, Videos, Research Reports & More

As a member benefit, the following resources and more are available for loan through the NAR Library. Items will be mailed directly to you or made available for pickup at the REALTOR® Building in Chicago.

Survey: Owners Say HOAs Protect Home Values (REALTOR® Magazine, June 5, 2018)

The Community Association Fact Book for 2017: Comprehensive Association Data and Information (Foundation for Community Association Research, 2017)

Condo & Homeowner Association Board Member Handbook and guide for association leaders (Buffalo Grove, IL: Kovitz Shifrin Nesbit, 2011) HD 1377 K84

Community Associations: A Guide to Successful Management (Chicago, IL: Institute of Real Estate Management, 2008) HD 1377 B23

Working with Your Homeowners Association: A Guide to Effective Community Living (Naperville, IL: Sphinx Publications, 2003) HD 1377 C67

Community Associations: The Emergence and acceptance of a Quite Innovation in Housing (Westport, CT: Greenwood Press, 2000) HD 1377 S73

Community and Homeowner Association Practice: Community Association Law (Philadelphia, PA: American Law Institute-American Bar Association, 2000) K 740 H99cp

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