HOA
HOA
What Does HOA Mean?
The main reason for creating a homeowner association is to protect property values by promoting uniformity and ongoing property maintenance. Through maintaining common areas and enforcing HOA rules and regulations the curb apeal of the neighborhood is improved.
How Does an HOA Start?
After a developer creates a community, they sometimes create a homeowners association that acts as a non-profit organization. Similar to other non-profit organizations or corporations, there has to be a leadership team to run the HOA, which in this case is called the Board of Directors. Board members from your neighborhood volunteer their time to serve their community.
How to Join an HOA?
When an individual or a family buys a home in a planned development, they automatically become a member of the homeowners association. When the community starts to grow, the developer hands over full control of the association to the residents.
The homeowners then elect a qualified Board of Directors who are interested in overseeing the community and its operations.
Are HOAs Legal?
Every homeowners association has its own governing documents. These documents include a Declaration of Covenants, Conditions and Restrictions, Bylaws, rules and regulations, and architectural control provistions. Governing documents determine how the community functions.
For instance, it outlines the powers and responsibilities of the HOA Board of Directors. It also states the rights and responsibilities of homeowners. All of these help protect the community’s property values.
HOA communities still have to follow their local, state, and federal laws. For instance, communities cannot enforce rules that go against the Fair Housing Act and the Americans with Disabilities Act.
What Are HOA Rules and Regulations?
HOA rules and regulations vary between different associations. Most of the policies deal with architectural elements such as fences, pools, storage buildings and other exterior portions of the home
When buying a home in a homeowners association, most people place value on the house and its surroundings. They want to be proud of their communities’ appearance. When neighbors that don’t care or don’t have the time for routine upkeep, they are notified to cut their lawn and make sure the exterior of their home is attractive and maintained to the standards of the governing documents.
Are There Benefits of Living in an HOA?
The biggest advantage of a homeowners association is the shared common areas within the community. Associations may have grounds, pools, clubhouses, volleyball courts, and other fun amenities that are commmon areas. Anyone living in the community can take advantage of these amenities.
Having an HOA board is also a benefit of living in an HOA. The board determines how homes and communal areas are maintained. As a result, homes in HOA communities typically enjoy higher and more stable property values.
What Are the Disadvantages of Living in an HOA?
In an effort to increase or stabilize property values in the community, homeowners will have to abide by the rules and regulations defined by the governing documents.
These rules are outlined in the community’s DCC&Rs, bylaws, or policies. This means that homeowners cannot alter the exterior of their property however they want. They have to abide by architectural controls that are dictated by the DCC&R.
It can also be expensive to live in an HOA community because of the fees you have to pay periodically. This can be a strain on homeowners’ expenses, especially if the HOA is not properly managing the community. Homeowners can also receive notice violations and fines for not following the HOA rules and regulations.
What Are HOA Fees?
HOA fees will vary for different associations. Communities with a lot of amenities will have higher upkeep costs, which will then result in higher HOA fees.
The amount can also be higher if communities have large-scale improvement projects in progress or if the association is trying to replenish its reserve funds. The HOA Board prepares an annual budget to determine the amount of HOA fees to be collected.
In Texas, all board meetings are open for members to attend. There are certian topics like collection of delinquent assessment or enforcement actions that are considered private and are discussed in a closed executive session. However, all budget discussions and common area operations topics are discussed openly.
What Happens If You Don’t Pay HOA fees?
If homeowners do not pay their dues on time, the HOA Board instructs the management company to collect late fees and/or penalties. These are necessary to keep the community’s budget on track. Depending on the community’s bylaws, homeowners who do not pay HOA fees may be restricted from amenities until they are able to settle their debt.
A homeowner who continuously does not pay HOA fees can be declared delinquent. In extreme cases, the HOA can place a lien on the delinquent homeowner’s property or file for a foreclosure to settle unpaid dues.
What Are Reserve Funds?
When homeowners pay their association fees, a percentage of that amount can be budgeted to build the HOA’s reserve funds.
Reserve funds are like a savings account; it is used to fund large-scale maintenance such as roof replacements on amenity buildings, pool and pavement resurfacing, as well as capital improvement projects such as a new playground or amenity.
Do Homeowners Pay a Special Assessment?
A special assessment is a one-time fee levied on homeowners. Special assessments are usually collected when the HOA does not have enough money in its reserves to cover large and unexpected expenses.
For instance, a roof replacement happens every 20 years. However, if it deteriorates over time, the HOA might not have saved enough for an uninsured replacement. Since a roof is a necessary feature, the HOA will levy a special assessment to cover the costs of a roof replacement.
Special assessments proceedures will depend on the state’s laws and the community’s governing documents, but homeowners are required to pay them. Just like HOA fees, there can be fines and consequences if homeowners refuse to pay the special assessment.
A Better Understanding of What Is an HOA
By now, you have a clear answer to “What is HOA?” Residents like to see a well-put-together area where they live and call home. Ultimately, a homeowners association is in charge of promoting the upkeep of the neighborhood in general and the beauty and safety of the common areas.
