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HOA: The rollercoaster to Real Estate Community

When you visit a community, you visit one of a community. It is important to know that every community has a board of directors who are responsible for the community’s 24-hour cleanliness and regular community activities (i.e. neighborhood pool maintenance, neighborhood barbecue events, etc.)

For residents to become involved in the HOA, board members must be involved in the HOA. The community is then committed to these two things through its board members and the community as a whole.

The Homeowner’s Association (HOA) is typically formed when a specific homeowner wants to rent out a portion of his property as an HOA property. The HOA board (or association) is responsible for the property.

In many ways, bank regulations of the property do not affect the HOA. The HOA is concerned with the repair of shared spaces such as walkways, driveways, and paths. The association is responsible for these costs and maintenance.

In some ways, the HOA looks after the property. The responsibilities of the HOA board include hiring a contracted electrician to replace the faulty circuit breakers in the neighborhood and maintaining an on-site property manager. The board will also maintain common property, such as the tennis courts, pool, and meeting rooms, as well as insurance for that property. In addition, they will represent the community to contractors and vendors so that these interests can be served as best possible.

The Association as a whole is responsible for the maintenance of the community property and the community itself. For example, the board should keep the neighborhood exterior in good shape for several reasons: they need to have an inviting look for the neighborhood and they need to increase the value of the community by making sure its residents are secure and satisfied with the community.

An HOA is implemented when the deed for the property is transferred. When someone purchases the property, he or she becomes a member of the community. He is also named on the HOA documents as a member.

Another factor in determining association longevity involved four factors: design and planning, cost engineering and finance, and management.

Design and planning involve the way the community is laid out and how the HOA will maintain common areas. For a neighborhood with houses on it, the HOA should ensure that the houses are fit for housing and that they have no structural defects that would affect their resale. Along with homeowners association documents, the association should have a reserve study and an operating budget.

Cost engineering considers the cost of maintaining the community property as compared to its original value. A reserve study will show how much the association will need to set aside for maintenance over a period of time. When budgeting, the board should include an extra contingency fund to cover unexpected expenses. This may include a problem with the pipes at one house that would cost $2,000 to repair. The HOA should have the reserve study done by a professional.

Management involves various tasks that ensure that the association is able to provide neighborhood association services for its residents. They include getting a manager to supervise the association help residents by providing 24-hour emergency services as needed.

The association will collect fees from its members through their HOA. These fees are used to pay for association maintenance and services.

The HOA board will have some decision-making authority on expenditures, but it is important to remember that the board is only allowed to collect these fees after taking into account several factors, including interest and inflation factors, assessment rights, and property taxes. The board will make its budget and will likely try to make as much as possible for last year’s financial statement.

Once the board begins collecting fees, it should take several items into consideration. Some examples are taking care of contractual obligations, choosing a contractor, hiring a management company, and paying the homeowner association insurance premium. Some requirements should be easy to manage and should be scheduled in time so that costs can be accomplished beforehand.

Fees are truly only worth receiving if the association and its owners – the homeowner – are satisfied with the services provided. The service providers are responsible for many things, but only with the community’s approval. If the HOA is not satisfied with the services provided, the board and association would need to provide more specific reasons why.