Love them or hate them, about 40 million American households live under an HOA.
But what is an HOA and what does it do?
You might know them as “the mysterious entity that takes your HOA dues” or even “the people that yelled at you for not weeding your flower beds” but there’s a lot more to HOAs than sending letters and taking money.
In this article, we’ll answer the questions “What is an HOA?”, “What does an HOA do?”, and “How can an HOA management company help?”
What Is An HOA?
A homeowners association (HOA) is a non-profit corporation that governs a residential community. Although “home” is in the name, neighborhoods of condominiums and townhouses benefit from HOAs as well (in most cases, they are known as “condo associations” instead).
Once you purchase a home, townhouse, or condo that is ruled by an HOA, you become a member of that association and must follow the rules, including paying dues.
The members of a homeowners association board of directors are responsible for the day-to-day management of the community. Members of the board of directors are elected officials and have a fiduciary duty to those they govern. This means that they are legally obligated to act in the best interests of the community—not themselves as individuals—and enforce all rules fairly and consistently.
Ultimately, the job of an HOA is to adhere to the community’s bylaws, protect property values, and ensure that it remains a pleasant place to live.
HOA responsibilities are many and varied, but they tend to fall under four distinct categories.
Arguably, one of the biggest responsibilities of an HOA is dealing with the finances.
This involves collecting HOA dues, but the financial requirements of a homeowners association go far beyond that. Board members must set (and stick to) an annual budget, collect past-due fees, determine whether special assessments are needed, and pay vendors, among other things.
HOA fees are assessed by calculating the annual budget of the community and dividing that amount by the number of households. Dues are typically due monthly, quarterly, or annually. If left unpaid, the HOA is legally allowed to place a lien on the property or foreclose, even if you have been paying your mortgage. Thus, the homeowners association board of directors is also responsible for sending past-due notices, filing liens, and beginning the foreclosure process, if necessary.
In neighborhoods with single-family homes, individual homeowners are responsible for maintaining their own property. But in every community, there are common areas that need routine maintenance to keep them at their best.
Common areas include things like:
- Office spaces
- Entrance landscaping
- Tennis courts
- And more.
Condo associations are also responsible for the maintenance of the exterior of the buildings, such as the roof and exterior walls.
3. Rule Enforcement
One of the main purposes of an HOA is to keep the neighborhood clean and attractive. And that involves setting—and enforcing—some rules.
When a new community is built and the development company passes control to the HOA, the homeowners association board of directors must adopt a set of by-laws (which determine how the HOA operates) and a Declaration of Covenants, Conditions, and Restrictions, or CC&Rs.
CC&Rs act as the rules of a community, governing what homeowners can and can’t do with their properties. There might be rules about what material can be used for fences or whether or not homeowners can install basketball hoops in their driveways.
When these rules are violated, HOA board members are in charge of sending out notices, levying fines and fees, or even taking legal action if rules are not followed.
4. Meetings & Voting
Last but not least, the HOA needs to manage…itself!
Running a housing community takes a lot of work and the homeowners association board members need to plan, organize, and attend regular meetings to make everything happen.
The Association’s By-Laws will determine how board members are elected, how often meetings are held, and other important information.
How An HOA Management Company Can Help
If you think being on a homeowners association board of directors sounds like a lot of work, you’d be right! And the majority of HOA board members are unpaid volunteers, balancing their commitment to the community with their home and/or work life.
Luckily, help is available!
Many HOAs choose to hire an HOA management company, such as American Home Team Realty, LLC to help with the details of running a community association. Having professional HOA management on your side can not only make an HOA’s day-to-day business easier, but more efficient.
- Finances – From collecting dues to bookkeeping, an HOA management company can make sure you don’t get bogged down with paperwork.
- Maintenance – HOA management companies can keep tabs on your maintenance needs and coordinate with vendors.
- Rule Enforcement – When rules are broken, your HOA management team can send out all notices quickly, efficiently, and consistently.
- Meetings – If you’re new to an HOA, you might not have much experience with Robert’s Rules of Order. This is where a management company can keep things on track.
- Community Liaison – Having an experienced, dedicated team to handle resident complaints can take much of the work out of being an HOA board member.
Many people consider HOAs to be a nightmare: needlessly strict rules, exorbitant fees, political back-biting, you name it. But when they do their job right, a homeowners association board of directors can make sure their community remains safe and appealing.
And having an HOA management company like American Home Team Realty can turn “What is an HOA?” into “How can I be a part of this?”
If you’re looking to make a difference in your community, consider running for the homeowners association board of directors. And if you’re already on the board, make sure you have the help of a knowledgeable, friendly, experienced management company.