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What is a community association or HOA?

What is a community association?

A community association is simply a private, non-profit organization comprised of the homeowners who live in the community. You automatically become a member of the Association on the day you close your escrow on your new home. The Association is governed by a set of documents called the Covenants, Conditions and Restrictions (CC&R’s), the Bylaws and the Rules and Regulations which all residents of the community must abide by.   In essence, community associations are mini-governments. The primary responsibility of the Association is to protect and enhance the health, safety and welfare of its members, including the homeowners’ property.  Since the primary asset of each member is his home, the Association is faced with no small task.

Most cities across the country have shifted responsibility of governance and maintenance to individual Associations; therefore, land developers are now required to establish a community association to administer the affairs of the community. The growth of community associations across the country is phenomenal. As of 2010, there are over 300,000 associations which is extremely impressive when you consider that there are only 38,000 local governments in the United States.  Each year your Association elects members to the Board of Directors. The Board has a fiduciary responsibility to make decisions that protect your investment and the common area of the Association. This is sometimes not an easy task since there are many owners in the Association, all with different opinions and suggestions on how to conduct the affairs of the community.

Why do I Have to Pay Assessments?

The Association by legal definition can be a Planned Community (Single Family Homes) or a Condominium (Multi-Family Units). Your assessment pays to maintain, improve and enhance the common areas of your community and provides for the operation of your Association. In Condominiums the common areas may be roofs, walls of buildings, streets, grounds, lakes, and pool facility which the Association is required to maintain. The homeowner is responsible for the “limited common areas” such as the front courtyards or adjoining patio walls, the rear patio, the balcony, the front gate, front door of his/her unit, and the windows of his/her unit.

In a Planned Community the entire lot and home is maintained by the homeowner and the common area such as parks, pool, tennis courts and community owned landscaping is maintained by the Association. In Condominiums your assessment also pays for your water and sewer and a portion of your assessment is set aside for future repairs and replacement of the common areas. The Board of Directors has the difficult job of trying to keep your assessment as low as possible and at the same time keep the common areas maintained and in an attractive condition. What the Association does to improve or enhance the common areas affects the value of your investment.

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