HOA 101: An Introduction to Living in an HOA
So you purchased a property in a community governed by a homeowners association (HOA).
But what does that really mean?
What are your rights and benefits under this structure?
How does an HOA really run?
Where can you turn if you have questions?
Many homeowners miss out on the true value of their HOA because they’re not sure exactly what an HOA is and they’re not sure who to ask. Relax, we’ve got you covered.
Why live in a community governed by a homeowners association?
HOAs exist for the benefit of residents like you. They are designed to protect property values and preserve community enjoyment by residents. This is done by providing sound fiscal management, generating a long-term vision for the community, and establishing standards about upkeep and conduct that help maintain high property values.
What is an HOA, exactly?
An HOA is a non-profit mutual benefit corporation. This means that it is subject to state Civil and Corporation codes. In California, the regulations that pertain to HOA governance have been outlined in various California Civil Code Articles, collectively known as the Davis-Stirling Act. As a legal non-profit entity, your HOA is responsible for managing and maintaining a set of valuable assets: the aesthetics of the homes and common areas within the community.
Every HOA has a fiduciary responsibility to oversee the financial management of Association funds, collected in the form of member dues. These dues pay for improvements and upkeep to common areas and communications strategies that support the long-term vision of the community. Membership dues are not optional; they are required. However, how these funds are allocated falls to the discretion of the HOA’s Board of Directors.
What is the structure of an HOA?
As a homeowner, you are a member of the homeowners association. Your rights include things like the right to use common areas, the right to run for a seat on the Board of Directors, and the right to enjoy your property. Membership also entails an explicit agreement to abide by the Association’s rules which, as mentioned above, are designed to protect your community and maintain your property values.
As a member of the Association, you may run for a seat on the Board of Directors, a position which is elected by the general membership. Board members are volunteers who do not receive any compensation or special privileges for their participation. They have the same rights and responsibilities as every other member. However, board members are tasked with the responsibility of making decisions that promote the success of the community as a whole.
What are governing documents?
Your homeowners association abides by a set of guidelines that are detailed in your HOA’s governing documents. These include the following:
- Articles of Incorporation- These are the foundational documents for your community, filed with the state, that establish the legal name, jurisdiction and location of the Association.
- Covenants, Conditions & Restrictions (CC&RS)– Another legally binding document, CC&RS cover the rights and obligations of the Association to its members and vice versa.
- Bylaws- Bylaws outline the structure of governance in your Association, including election cycles, board member eligibility and duties and responsibilities of Board Members.
- Rules & Regulations- These guidelines are intended to clarify any uncertainties within the language of the CC&Rs. Rules & Regulations are not filed with the state, so they are easier to amend when needed.
It’s a good idea to review your community’s governing documents to obtain a thorough understanding of what is required of you as an Association member, as well as the obligations your Association has to you. You received a copy of these documents when you closed escrow on your home, but you can likely find copies of your governing documents on your community’s website. Alternatively, you can request copies from your HOA management company.
How does your HOA management company fit in?
Your HOA management company is an independent third party contracted by your Association to help manage operations. The management company is not the same as the Board of Directors and shares none of the rights or responsibilities of the Board. Instead, the management company helps facilitate the guidelines the Board enacts. To put it another way: the Board makes the rules while the management company provides the business advice to the Board and implements their direction.
The management company also provides additional support services to the Board and to the general membership, including things like:
- Offering advice and expertise to help your HOA achieve its vision
- Supplying guidance to help the Association run in a cost-effective manner
- Helping the Association remain compliant with the law
- Facilitating communications between Membership and Board
- Helping to run Board and Membership meetings
- Overseeing third-party Association vendors
Your HOA management company assigns a manager to your community who might work on- or off-site. This manager deeply understands the needs of your community and is available to answer questions and provide you with information.
How can I get the most out of my HOA?
Get involved! Review your governing documents, introduce yourself to your manager, go to regularly scheduled Board meetings, run for a seat on the Board, volunteer for a sub-committee, attend community events, and respond to HOA surveys and share your opinion. The more deeply involved you become in your community, the more you will witness firsthand how your HOA is working to protect your property values and promote your enjoyment of the community.
If you have any additional questions about living in an HOA, please contact us at (949) 833-2600 and we’ll be glad to discuss the benefits of Association living.Posted by on | Categories: HOA Management, HOA Rules.