Homeowner Associations (HOAs)
Submitted by S. Laraby
A Homeowners Association, commonly referred to as an HOA, is a corporation developed for the purpose of managing, marketing and maintaining a residential community. The entity is typically created by the developers and ownership is transferred to homeowners within the community once established.
HOAs employ the services of property management companies to manage current and future maintenance and repair work, as determined by the HOA Board of Directors. The Board of Directors is a group of elected representatives from within the community who ensure that decisions are being made in the best interest of the members of the association and all rules, regulations, and codes are being followed by each household. Managing an HOA has many commonalities with traditional property management services.
Homeowner Association dues are commonly collected from members monthly or quarterly. What makes up an HOA fee? There are several variables that determine the HOA fee of a community. A portion of the fee is allocated to the properties operating fund to cover routine operating expenses including staff, supplies, management, utilities, etc… while the remainder is allocated to the maintenance reserve fund to cover current and future capital expenditures for maintenance items such as roofs and roadways.
To ensure an efficient and effective partnership, HOA boards enlist the help of seasoned HOA Property Management companies that can skillfully manage all aspects of the property regardless of what should arise. The partnership should deliver peace of mind for residents and add value to the community.
HOA Facts:
-Two million U.S. resident volunteers serve on community association boards.
-There are over 320,000 community association meetings each year.
-In 2011, association boards collected over $45 billion in annual assessments and maintained investment accounts of more than $38 billion.
-HOAs first emerged in the United States in the mid-19th century. Since 1960 they have experienced significant growth in popularity.
Fig. 1: Residents of HOA-governed households in the United States.
