What is a homeowner's association?
A homeowner’s association might be known as a condominium complex, a townhome, a Planned Unit Development, or a combination of all of these. It is an entity formed to govern an area that the City decides they do not want to govern on their own.
Many times, the necessity exists because of attached housing, where there is too much shared maintenance and you don’t want to rely on each individual owner to do a share of the work.
Or perhaps your community has private streets or a park that everyone gets to use, but that the City doesn’t want to maintain. This is when a City will require an HOA be set up. A City typically dictates when an HOA must be set-up in order for the builder to develop a project.
What does the management company do?
The management company can take a lot of the work and pressure off of a volunteer board, and can help ensure the board is aware of all of the laws applicable to an HOA.
Since most of the time your board consists of volunteer residents, who cannot be paid for their time in most cases, it only makes sense to hire a management company.
Depending on how large your HOA is, the time involved to manage the project can be huge. The management company will perform a variety of tasks depending on the needs of your HOA and depending on what directives the board has given. The management company always works at the direction of the board, taking only the action to which it has been given authority to perform.
Can’t I just not pay my monthly assessment? What if I am not happy with the service?
Anyone who owns a Unit/Lot in an HOA is automatically required to pay an assessment. Unfortunately, whether you are happy with the services the HOA is responsible for or not, you have to pay the assessment in full.
If you don’t, your property could be sent to collections and a lien placed against your home, which will add hundreds of dollars to your balance due. It isn’t worth it to stop paying your assessment. Instead, go to meetings and get involved to make the changes you want to see.
Where does it say I have to be a member of the association?
If you look at your Declaration of Covenants, Conditions and Restrictions (commonly referred to at CC&R’s), you will find the definition of a member. You will also find that this document is recorded against your Unit/Lot.
The fact that an area is considered an HOA and subject to CC&R’s is also commonly referenced in the recorded Plat map for the project and/or in the warranty deed to your home, although this isn’t required.
Where does all the money go?
Typically, an HOA is required to have an annual budget that specifies exactly where your money is being allocated. Typically, the assessment will cover the maintenance and repairs for which the Association is obligated. The CC&R’s usually outline what the HOA is responsible for.
In some cases, the CC&R’s allow the board to decide whether more or less can be covered by the assessments. Maintenance such as landscape, snow removal and pest control might be included in your budget. Every HOA must have insurance, pay for taxes, utilities and government fees, which are also included in an HOA budget.
Every HOA should also have a long term replacement budget, commonly called reserves. This portion of your assessment is put towards a “savings” account to cover future projects, such as roof replacement, street resurfacing or pool replastering. Your board needs to allocate funds towards long term replacement to avoid the need for special assessments and/or bank loans to cover these expenses later on.
What would you do if you had a $30,000 special assessment levied on your Unit? This is why it is so important for your HOA to budget properly and save for those long term replacements costs.
How can I get the management company to address my neighbors dead lawn or inoperable car? Why do I have to tell on my neighbors? Can’t the management company just send a letter on its own?
Even though the manager will inspect the property for maintenance issues on individual units, this doesn’t mean they will always catch everything. There is always the chance that the problem didn’t exist on the day of the inspection or it was missed.
Always e-mail your concerns to your manager. The report is required in writing so that we may communicate back to you in writing and you will have a paper trail of what was said and done.
In most cases, you will not be reported to your neighbor as the one who complained, provided the issue is one that can be readily seen by anyone walking on the street. If it is an issue only you can see, then the Association would tell the neighbor who reported the issue if they ask.