HOA Basic Questions
What is a Homeowners Association?
A Homeowners Association, also known as a Common Interest Development (CID) or a community association, is a non-profit organization that oversees the upkeep of a neighborhood’s common areas and establishes general rules and standards for the community. Homeowners associations are established with the intent of protecting community assets and establishing a code of conduct for owners and residents, while instituting proper and sound financial management practices.
Who makes decisions on behalf of the Homeowners Association?
Decisions concerning homeowner association operations are made by a Board of Directors, which is made up of volunteers who are initially appointed by the developer and thereafter elected by the community’s residents during the annual membership meeting. The Board appoints officers and depending on the number of units or homes in the association will usually determine how extensive a role the Board takes. The Board may appoint a President, Vice-President, Secretary, Treasurer, and member-at-large and in many cases the By-Laws allow for one person to hold more than one office. Additionally, the Board may appoint other owners to serve on committees to assist with the operations. Examples include: Landscaping, Finance and Budgeting, Maintenance, Social, and Architectural Committees.
What are the Board of Directors responsible for?
The Board of Directors are responsible for making most operating and enforcement decisions on behalf of the homeowners’ association. These decisions include but are not limited to: establishing budgets, preparing reserve studies and enforcing the collection of assessments; making sure contracts are in place for the maintenance of the common area and vendors are providing the work they were contracted for; having proper insurance for the association, and establishing and enforcing the rules and regulations.
What are the Governing Documents of the Association?
The Governing Documents are documents that help to govern the powers, rights, and responsibilities of the Board of Directors of the Association and the Owners. These documents will include Articles of Incorporation for incorporated associations; By-Laws; CC&R’s which stands fort Covenants, Conditions, and Restrictions, and sometimes called the Declaration or Declaration of Restrictions; and the Rules and Regulations.
What types of housing communities are run by Homeowners Associations?
The general term that a homeowners’ association or Community Association refers to is a Common Interest Subdivision or Common Interest Development. These pertain to any development where there is some property owned exclusively and some property owned in common by owners in the development. They include Condominium Projects, Planned Unit Developments-usually made up of single-family homes, Stock Cooperatives, and Community Apartment Projects.
Note: Although homeowners associations refer to residential property; a common interest property can also include commercial or office space and are governed similarly to a homeowners’ association.
What is my role as a homeowner?
All homeowners should assume responsibility to protect property values and secure a lifestyle that all residents can enjoy. As a member of your community association, your legal responsibilities to the community association include: complying with the governing documents, rules and regulations, architectural guidelines, policies and procedures, and paying the monthly assessment necessary to operate the community association. Should you wish to influence the direction of the association it is advisable that you volunteer to serve on the Board of Directors.
Do I have to pay the monthly assessment if I belong to the community association?
Yes, all homeowners owning a unit or lot within a community association automatically become a member of that community association and are required to pay the monthly assessment. The monthly assessment covers all of the costs associated with operating a community association.
What does my monthly assessment pay for?
The assessment covers the operating expenses that the community association is legally responsible for. Typical expenses include: insurance, water and sewer, gas and electricity, landscaping services, street sweeping, janitorial, pest control, pool and spa, elevator, maintenance and management. Assessments also cover the funding of reserves, which are funds accumulated to pay for future repair or replacement of major components for which the community association is responsible. These include: water heater replacements and plumbing, roofing, painting, street repairs, pool and spa, elevator upgrades, and clubhouse refurbishment.
Have additional questions about what a Homeowner Association does or how APS can help your community? Please contact us.
What is the role of a management company?
The daily workload for maintaining the association is often very time consuming for a volunteer Board of Directors. A management company is an independent firm that assists the Board in the daily functions some of which include: handling financial operations and enforcing collection policies, maintenance and overseeing vendors, helping the board to stay in compliance with the governing documents and laws, handling notices and correspondence to the owners, act as homeowner liaison and providing routine inspections of the property.
The scope of services provided by a management company varies based on the needs of each Homeowners Association. At Associated Professional Services, we provide a customized management service catered to each association which includes: financial, accounting and collection services, administrative services on an as needed basis, refinance and resale services and full community management.