What is a Homeowners Association (HOA)?
A Homeowner’s Association, or HOA, is a non-profit corporation comprised of members (homeowners) within a community. Other terms used synonymously with HOA are Community Association, Common Interest Development (CID), and Planned Unit Development. The HOA is created by the developer at the same time that the community is approved at Planning and Zoning. It is registered with the State and managed by a Board of Directors, who are also members of the association. The purpose of the HOA is to maintain all of the common areas of the community, and govern the community according to the provisions in the association’s legal documents. The documents include the CC&R’s, Bylaws, and Articles of Incorporation. The Board of Directors may also put into place rules and regulations to help facilitate the operations of the association and the enforcement of the documents. These rules are often times more restrictive than city ordinances or state laws. You can find all of your association’s documents
An HOA is formed to run the business entity that represents the condo development. A board of directors is installed to monitor & supervise the running of the association for its owners. The HOA can set HOA fees, which are collected to pay for maintenance of common areas, repairs, and insurance for the development. This group of individuals determines policy, enforces covenants and restrictions, and serves as the leadership representing the development once the builder places them in power.
The Federal Housing Administration in 1963 authorized federal home mortgage insurance exclusively for condominiums or for homes in subdivisions where there was a qualifying homeowners’ association. The rationale was that homes in tracts where there was a homeowners association would be more likely to maintain their value. The effect, however, was to divert investment from multifamily housing and home construction or renovation in the inner cities, speeding a middle-class exodus to the suburbs and into common-interest housing. The federal highways program further facilitated the process. In the 1970s, a growing scarcity of land for suburban development resulted in escalating land costs, prompting developers to increase the density of homes on the land. In order to do this while still retaining a suburban look, they clustered homes around green open areas managed by associations. These associations provided services that formerly had been provided by municipal agencies funded by property
