A Homeowners Association (HOA) is an organization that is usually created by either a developer or a group of homeowners. These communities are usually a Planned Community or PUD. The typical purpose for the creation of an HOA is to insure that the community is developed and maintained to certain minimum standards of design and maintenance. There are certain principles that are common to almost every HOA:

• HOAs are legal entities that are recognized by the state and are typically formed as non-profits.
• Membership is automatic and mandatory when the property is purchased.
• Fees are assessed to each property owner to operate and maintain the HOA.
• The owners and residents are obligated to comply with the rules and regulations.
• All properties in the development must comply with certain design and maintenance standards.

By purchasing a home in a planned community, or any community having a HOA, the owner is joining an HOA. Owners of homes located in a community that has a HOA have reasonable expectations for maintenance and construction standards, coupled with a common interest to protect and increase property value, they are able to create and sustain a desirable neighborhood. For an HOA to work, it is necessary for each homeowner to abide by the rules and restrictions for the betterment of their community. Some potential homeowners perceive these standards as limiting, and therefore make a decision not to purchase a home in an HOA. Usually, HOA Planned Communities have a stronger appreciation rate than other communities in a close proximity, but are not suited to every home purchaser.

In some cases, homeowners may find that their home purchase gives them membership is multiple HOAs, a Master Association, and a Recreation Association. These associations oversee the particular recreation facility, condominiums or association for which they were formed. Their fees are separate and can be apart from the Master Association; and they often have their own set of rules and regulations.

Governing Documents

An HOA is governed by a set of documents that provide for the legal structure and operation of our community. Upon purchasing property within the HOA, you should receive a copy of the Communities Resident Handbook, Declaration’s and By-Laws.

 These documents should provide the following:

• Definitions on the rights and obligations of the Association and its owners
• Established mechanisms for governing and funding the Associations operations
• Declarations of the rules and standards including:
• Protection for property owners as well as the community
• Enhancement of property values
• Promotion of harmonious and peaceful living

Property Owner's Rights & Responsibilities

Membership in the HOA provides both rights and responsibilities including:

• Use of common areas within the appropriate guidelines.
• Voting rights in the Association.
• Participation in Association affairs by attending meetings, volunteering time on a Committee or Board, and voting for Board candidates.
• Access to all Association records.
• Financial obligations for all assessments and fees.

Association Fees

Just as any other organization, HOAs have operating expenses. These expenses are met by the assessments paid to the association each year by the homeowner. HOA fees can be a fixed amount, or based on the value of your home as determined by the County Auditor’s office, multiplied by a millage factor established in the original governing documents. These fees may vary from year to year, but a relatively accurate estimate can be made using the previous year’s assessment. HOA fees can cover such expenses as:

• Landscaping and grass cutting on the common areas.
• Maintenance and repair of the common area amenities such as the lake, ponds, hiker/biker paths and green space.
• Garbage collection on common property.
• Insurance.
• Social activities.
• Management, accounting and legal fees.

Property owners, as members of the HOA, have the right to review all financial and accounting records and documents and to verify expenditures made by the Association. 

Role of The HOA Board

The HOA is comprised of volunteers who are elected to serve a specific term as set up in the By-Laws. Elections are usually held each year at an Annual Meeting of Members. This meeting is open to every homeowner. 

The association acts through its Board. Specific powers and responsibilities charged to the Association HOA Board by the governing documents and State law include, but are not limited to:

• The enforcement of the goals, standards and policies set forth in the governing documents.
• Adoption of Community Standards and Community Handbooks.
• The ability to collect assessments.
• The ownership and maintenance of the common areas and facilities.
• The maintenance of financial stability.
• The purchase of adequate insurance coverage for common properties.
• Entering into and supervision of contracts for services.
• Holding regular Board Meeting & Annual Homeowner Meeting to share financial information about the HOA.
• The appointment of members to an Architectural Review Board if applicable.
• The creation and supervision of committees.

Many HOAs will contract with an outside management company, to operate and maintain the community under the Board’s direction.