Condominium living creates a close-knit community of owners. Establishing a Homeowners Association (HOA) can be a definite advantage, ensuring that routine duties and responsibilities are carried out within the community consistently, leading to a more structured, organized, and attractive community. Due to the expectations of ownership and the need for regular maintenance and renovation, forming an HOA is beneficial to all community members by providing a platform where homeowner concerns get heard.
Some owners regard HOAs as a symbol of self-governance and democracy within their community. HOAs create a strict list of community-based rules and regulations governed by an elected Board of Directors.
Purpose of a Homeowner’s Association
A homeowner’s association is an organization within a housing community comprised of and run by its owners. It is responsible for creating and enforcing a set of rules that pertain to the property and its residents. Purchasing a unit within an HOA gives the new owner automatic and sometimes mandatory membership within that HOA, and, as such, they pay HOA fees or dues.
HOAs have an elected Board of Directors whose mandate is to oversee the rules and regulations laid out by the HOA. Through a CC&R, also known as the Declaration of Covenants, Conditions, and Restrictions, homeowners receive the guidelines as laid out by the HOA and must abide by these rules. Non-compliance can lead to penalties which may range from penalty fees to litigation. Restrictions usually involve structural guidelines like the erection of fences and building porches. Other rules cover design requirements like the selection of exterior paint colors and window styles.
Hiring Third-Party Management
In some cases, as with many large communities, the HOA may hire a third-party property management team to run the day-to-day operations of the HOA. All HOA and Board members are volunteer owners from within the community. Bringing in an outside professional management team helps relieve them of time-consuming daily duties and takes on the role of working with legalities associated with a condominium housing community.
Professional property managers assume a wide variety of daily tasks and responsibilities, from Human Resources to outsourcing repairs, maintenance, and renovations. They stand as representatives for the HOA and advocate for owners, reporting to the Board and HOA. Some of the duties they assume include:
- Fees collection
- Property inspection
- HR including the hiring of maintenance and other staff
- Oversight of regular upkeep of the common areas
- Coordination with trades and outside maintenance professionals
- Liaising with public officials regarding permits and documents
- HOA rules oversight ensuring that they are in compliance with state laws
- Unbiased negotiating in conflict resolution
- Liaising between owners and the HOA and Board
Benefits of Forming an HOA
Whether they work on their own or hire a professional property management company, HOAs have a responsibility to their member-owners to ensure that the buildings and grounds receive regular maintenance and renovations as required. Their work ensures that property values are optimized and can attract new buyers. The benefits far outweigh the negatives when deciding to create an HOA. Specific areas where the benefits of an HOA are evident include:
HOAs are responsible for maintaining all the common areas of a condominium community. These may include the upkeep of walkways, parking lots, swimming and fitness facilities, and social rooms shared by residents. They arrange for regular municipal trash and recycling collection with the municipality.
Seasonal benefits would include landscaping and gardening services to snow removal during the winter.
All prospective owners choose a community that suits their lifestyle and tastes. An HOA does its best to maintain and improve upon the uniform appearance and attractiveness of its community. Buyers are first drawn to their new community in large part because of the curb appeal.
It is the task of the HOA Board of Directors to collect monthly or annual HOA fees from homeowners for payment of common area and facility maintenance. When a third-party management company is hired, they typically take on this collection responsibility and forward the funds to the Board.
Conflicts occasionally arise between owners or members of the HOA. When these disagreements occur, they are settled through the HOA Board, which mediates between the challenging parties and among the community members. A hired property management team would stand as mediators rather than the Board of Directors. Some conflicts lead to increased involvement from the HOA and Board of Directors and may only be resolved through the courts.
Networking and Social Integration
A great benefit of establishing an HOA is that it brings all the owners together to discuss their ideas and air their concerns. Within a large community, it is an advantage to get to know your neighbors, and an HOA allows for residents to meet and socialize at organized events and gatherings. Like-minded professionals living within the community have an opportunity to network.
Board of Directors
An HOA will vote in a Board of Directors from within their jurisdiction or community. These members have the specific experience and background to fulfill their roles. Board members take on the roles of finance, human resources, property concerns, and more. The Board is responsible for governing the rules and regulations of the HOA and meeting its requirements.
Hiring Outside Management
For larger properties, it is a great benefit to the HOA to hire outside professional management to deal with the daily tasks and demands of their community. Experienced management teams offer more than simple HR and AR/AP assistance. They are familiar with the latest laws and building codes, have a developed network of trades and suppliers, and are experienced in dealings with owners and conflict management.
Since HOA members are volunteers, many do not have the experience or time to commit to helping run a community. An outside management team lifts their burden yet is still answerable to the Board of Directors.
Establishing an HOA offers condominium communities excellent benefits that bring together the talents of all owners to develop rules and guidelines for the maintenance and enhancement of their home investment. HOA management companies like Belwood Properties can help pave the way for HOA success and provide ongoing professional property management services.