Many people live in communities governed by a homeowner association (HOA). HOAs almost always runs condominiums, but they are also common in neighborhoods of single-family homes. Residents pay HOA dues to fund maintenance of common areas and structural aspects of condos. HOAs also have broad powers to enforce community regulations and standards. The underlying purpose of these powers is to preserve the quality and character of the community so that property values remain stable of increase.
How Does An HOA Regulate A Community?
When you buy a home within an HOA community, you become an association member and agree to follow the rules established by the HOA’s governing documents.
Documentation that forms an HOA:
- Articles of Incorporation
- Covenants, Conditions, and Restrictions (CC&Rs)
- HOA bylaws
The Articles of Incorporation legally form the association similarly to the founding of a business.
The CC&Rs represent most of the nuts and bolts of how the community operates. These rules explain the rights and responsibilities of homeowners and what they can and cannot do with their properties. For example, you might not be able to use your home as a short-term rental or paint it a color not sanctioned by the CC&Rs.
The rules vary from HOA to HOA, but they can be very detailed and extensive. The CC&Rs enable the HOA to take enforcement action against rule violators. Actions usually start with warnings and escalate to fines and perhaps litigation.
CC&Rs also explain how the HOA can charge monthly or annual dues and issue special assessments to fund various maintenance and repair projects. Failure to pay dues and assessments approved by the HOA board can result in the HOA placing a lien on your home.
In addition to authorizing money collection for community needs, the rules explain the procedures for managing disputes between the HOA and residents. Disputes can also arise between residents that the board might have to step in and attempt to resolve.
The HOA bylaws outline how and when to conduct board meetings, how many board members should serve the community, and members’ voting rights. The bylaws may assign various duties to board members. The board may have the power to alter or amend the CC&Rs or bylaws.
How Do HOA Rules Protect Property Values?
As most HOA board members will tell you, the CC&Rs are meant to keep the community looking good and prevent deterioration of the buildings. In general, the CC&Rs promote a cohesive look for the community so that everything looks clean and orderly. Residents may be prohibited from parking cars on streets or hosting large parties. Rules might require you to keep your front lawn clear of objects like trampolines or kiddie pools.
The HOA’s power to collect dues and assessments derives from the duty to maintain the community. The money must be spent responsibly so that the community does not start looking shabby and neglected.
On top of regular maintenance, the HOA also has a responsibility to anticipate future capital expenses and manage funds accordingly so that big projects, like condo roof replacement, can be done in a timely manner.
Can Residents Participate In HOA Decisions?
An HOA board should be responsive to reasonable complaints and recommendations from residents. After all, residents are members of the association. You can attend meetings, vote for proposals and board member elections, or run for a position on the board. Members also have a right to see current financial reports to confirm that money is being spent appropriately.
When you or a group of residents have concerns, you can express them at board meetings and hopefully receive the outcome that you desire. If you suspect that the board is mismanaging funds, you can consult a lawyer and possibly file a lawsuit to correct the problem.