Cina Coren | 02-26-2014
Homeowner's associations (HOAs) emerged in the early 1960s and have been a popular resource for homeowners since then. A homeowner's association is incorporated by the developer while in the process of selling one or more of his homes and is then transferred to the home purchasers upon completion of the building's construction. The original owner/developer then removes himself from membership in the association and has nothing more to do with it. Homeowner's associations are also used by older housing units. Anyone purchasing a home in an existing housing project must become a member of the established HOA. HOAs represent the residents. Depending on how active these associations are, they can be quite effective in providing forums for common homeowner representation and needs. However, they can also lead to disappointment.
HOAs govern like a city
A homeowner's association governs like a small town. Their powers include imposing fines, organizing activities and providing certain services. They can also levy assessments and force the homeowners to pay them. In fact, a homeowner's association can legally impose monetary fines to enforce its decisions.
Governing the HOA
Homeowner associations usually appoint a board of directors which may then elect an association president and other officers. These elected officials, together with the board, decide on the time and place of their meetings. Monthly meetings are typically scheduled but sometimes they are quarterly. Committees are also appointed for various activities--maintenance, membership dues and neighborhood representation. The accounting committee is assigned the tasks of presenting the annual budget, and monitoring expenses and funds collected. In fact, one of the most challenging tasks of the bookkeeper/accountant is collecting the association's annual dues. Not every member is eager to put money into the till, especially if he is not active in the association or feels he is not being represented properly.
The benefits of HOAs
HOAs offer many benefits to the homeowner. According to the bylaws of the association, they can collectively represent the group for whatever purposes assigned. For example, in order to maintain a certain degree of conformity, the association can stipulate which changes are permitted for the exterior of the buildings. Sometimes, it can decide on acceptable noise levels. If there are common areas such as gardens and pools, the members can appoint an internal management committee or elect to bring in an outside maintenance company. On snowy days, a snow removal company may need to be called in and this will be paid out of the association's funds.
Satisfied or not satisfied?
Most residents are satisfied with their experiences as part of their association. One survey, taken by Zogby International, showed that out of 706 homeowners asked, six out of seven viewed their HOA in a positive light. However, other surveys indicate a greater amount of dissatisfaction with HOAs. Don't let the thought of an HOA stop you from moving into your dream residential development.
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