The Important Role of Homeowners Associations

The Important Role of Homeowners Associations

Within the sphere of residential communities, an esteemed entity known as the Homeowners Association (HOA), or sometimes the Property Owners' Association (POA), assumes a pivotal role. In 2021, 78% of new construction homes belonged to a community association.

What makes up an HOA?

A dedicated group of volunteer members leads these dynamic organizations, and they passionately strive to orchestrate the seamless operation and flourishing development of their cherished neighborhoods.

In order to function effectively, an HOA follows its Articles of Incorporation and complies with the state statutes that govern non-profit organizations. The level of local authority overseeing an HOA varies depending on the specific laws of the state in which it operates.

The responsibilities carried out by an HOA contain a wide range of aspects related to community living. These duties can include essential matters such as land use, zoning, and urban planning, all of which contribute to shaping the overall character and appeal of the sub-division.

Furthermore, the HOA takes on the crucial responsibility of overseeing the maintenance, repairs, improvements, and general upkeep of properties within the community. The overarching goal is to ensure the neighborhood remains attractive, functional, and well-maintained for years to come. The specific advantages of residing in an HOA community are primarily influenced by the rules established during its formation.

How were HOAs started?

The inception of HOAs can be traced back to the early 20th century, primarily emerging on the West Coast of the United States. Initially, these associations were rooted in exclusivity and, unfortunately, reflected racial and religious biases. However, it is necessary to note that the modern iteration of HOAs has undergone significant transformation since then and no longer holds bias.

Originally, HOAs began as neighbors banding together to collectively manage and protect their properties. However, developers soon recognized the benefits of establishing HOAs with specific regulations and rules for new residents. As properties sold, the balance of power gradually shifted from developers to homeowners, leading to HOAs becoming self-governed entities managed exclusively by their property-owning members.

Many factors drove the surge in establishing HOAs, with rapid economic growth in the 1960s being notably influential. This period also witnessed the construction of new highways, facilitating easier commuting and fostering the developing trend of suburban living. With limited space in cities and rising construction costs, HOAs presented an attractive solution for homebuyers seeking well-managed and regulated communities. Changes in mortgage laws and state encouragement further contributed to the increase of HOAs.

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How do I become an HOA member?

When you purchase a home within an HOA community, the path to membership unfolds automatically for new residents. Most have mandatory membership, where joining becomes a requirement for all property owners.

However, there is a small number of HOAs that operate on a voluntary basis. It's important to note that opting out of membership can sometimes come at the cost of relinquishing access to the community's magnificent amenities, be it the inviting poolside oasis, the lush greens of the golf course, or the neighborhood facilities and events.

Before making the decision to move into an HOA-governed property, it's a good idea to thoroughly review the governing documents and fully understand the rules and obligations that come with membership. Additionally, assessing the overall health and effectiveness of the HOA can provide valuable insights into how well it operates.

How much does it cost to join an HOA?

As a homeowner, it becomes your responsibility to contribute HOA fees, which are typically collected monthly. However, some associations may opt for quarterly or annual payments. The precise amount varies considerably, influenced by factors such as the community's characteristics, location, and the offered amenities.

These fees sustain and enhance the maintenance of shared areas within the community. They preserve and improve essential communal spaces like landscaped backdrops, swimming pools, fitness centers, and security systems. Some fees also cover utilities and services such as trash removal and snow plowing during winter months.

Understanding the scope of these fees and their assessment frequency can significantly impact your overall housing costs. Before purchasing, requesting information on the potential for regular fee increases or special assessments related to major projects is highly beneficial for budget planning.

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