What is the HOA?

The term “HOA” stands for Home Owner’s Association.  There are three features that make owning a home in a community with an HOA different from more traditional forms of homeownership.  First, you share ownership of common properties and have access to facilities such as swimming pools, playgrounds, and in some communities a tennis court or golf course.  The second feature is that you automatically become a member of a homeowner’s association simply by purchasing the home, and you typically must abide by covenants, conditions, and restrictions (CC&Rs).  The third feature is that you will pay an assessment, or due, that is used for upkeep of the common areas and other services and amenities.

There are definite advantages to living in a neighborhood with an HOA.  The community typically has landscaped open spaces and amenities such as pools and parks, which are often too expensive to own alone, but can be yours through shared ownership.  While you can enjoy the use of these amenities, you do not have the direct responsibility for their maintenance.  The HOA operates and maintains these facilities.  You will pay your share of the expenses through your annual dues.  You will also have a voice in the decisions made by the association.

The Home Owner’s Association is a Non-Profit Corporation.  All of the association members are like shareholders.  They have an interest in the corporation, but they don’t actually run the association.  The responsibility of running the corporation lies with a Board of Directors. 

The Board of Directors must have at least three individuals serving on it, but frequently has five members.  Generally, the developer of a community puts an association in place with an appointed board and then eventually transfers authority over to the new owners as construction of the community nears completion.  Once the homeowners have control of the association, the association’s members will elect the Board of Directors.  The Board has a fiduciary (based on trust) responsibility to act in the best interest of the association and to use reasonable judgment in conducting the affairs of the association.  Board members are unpaid volunteers who work actively to ensure a high quality of life within the neighborhood and to protect the property values of all residents. 

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