Homeowners Association

Purpose And Fundamentals Of Homeowners Association

ByGustan Cho
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This BLOG On Purpose And Fundamentals Of Homeowners Association Was UPDATED On January 27th, 2019

There are certain homes that belong to a community such as gated communities.

  • Many neighborhoods have isolated communities
  • Some are gated while others are not
  • These communities often have Homeowners Association
  • Residents elect a President
  • There are board members consisting of homeowners in the community
  • Most homeowners associations have annual HOA dues which are similar to a form of property tax

In this article, we will cover and discuss the fundamentals of homeowners’ associations and how they work.

When Did Homeowners Associations Start In America

Homeowners associations started its birth back in the early 1960s.

  • Some 200 homeowner association were in existence in the 1960s
  • Every year since then, it has become increasingly more popular
  • There are around 350,000 homeowner associations in the United States today
  • Almost 79 million homeowners are members of homeowners associations
  • Homebuyer buying a property with a homeowner association has no choice but to belong to the homeowner association
  • Residents of homeowner association communities need to pay its annual dues
  • Homeowner association dues are calculated as part of housing expenses when mortgage underwriters calculate debt to income ratios
  • Homeowners association dues are somewhat of a tax

It is mandatory to pay HOA dues or the homeowner association can lien property.

Objective And Goal Of Homeowner Association

A homeowner association is an entity that is made up of homeowners in the subdivision or condominium project. The officers of the homeowner association are elected by the residents of the housing subdivision or the condominium complex.

  • The homeowner association elected officers are responsible for creating rules and laws pertaining to the standards of the neighborhood and rules expected by its residents
  • A homeowner belonging to a homeowner association cannot make major changes to their home without approval from the board of directors of the homeowner association

A homeowner association may have rules for the following:

  • Painting
  • Roofing
  • Landscaping
  • Other property improvement restrictions

For example, some homeowner associations do not allow a boat parked in the driveway:

  • Others do not allow commercial vehicles parked in their driveways
  • Although it is parked on a private driveway, the homeowner association can implement such rules

This is because the majority of the residents have voted on such rules and regulations.

Advantages And Disadvantages Of Homeowners Association

Being part of a homeowners association has its advantages.

  • There are strict rules created and implemented by homeowners associations
  • Members of HOA includes its President and board of directors who are voted by residents of the community
  • All residents of the community have a say so
  • One of the advantages belonging to a community with a homeowners association is that the community is kept up

Its officers will not let a resident have a home that is an eyesore or not being kept up.

Responsibilities Of Homeowners Associations

Many times, the HOA contracts with a landscaping company so the neighborhood is maintained. During the winter, most HOAs contract with plowing service so the streets are cleared.

  • Homeowner associations can restrict exterior painting of home a certain color
  • Or having multiple commercial vehicles on their driveway
  • To many homeowners, someone painting their home orange and purple may seem it as an eyesore and probably will be worried about degrading the neighborhood
  • Another example, say is if a resident who is a plumber may not be allowed to park plumbing vehicles in their driveway

Parking commercial vehicles may not be allowed per the rules of the HOA.

Disadvantages Of Homeowners Association

The disadvantage of being part of a homeowner association is that residents cannot do everything they want on their property without permission from the board of directors.

  • For example, if a homeowner wants to change existing tile roof to asphalt shingles because asphalt is cheaper, they need to get approval from the board of directors of the homeowners association

Owners who go ahead and do as they please because it is their property, the board of directors of a homeowners association can take legal action against them.

Other Roles Of Homeowners Association

This can be an advantage or disadvantage to homeowners. Homeowner associations can provide amenities to the community by installing gyms, pools, tennis courts, club houses, ponds, waterfalls, and amenities. Maintenance such as security and landscaping and plowing services whether the homeowner likes it or not are decided by the officers of the homeowners association.

  • The disadvantage of adding such amenities to the community is that it is not free and every homeowner needs to chip in
  • Having luxuries such as a pool and tennis courts will increase the homeowner association dues to every member of the homeowner association

Homeowner Association dues are like property taxes. HOA dues can increase and homeowners with free and clear properties still have to pay HOA dues as long as they own the property.

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