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What is an HOA?

As you search for your next home, you’ll hear the term “HOA” mentioned when talking about a specific housing community or development. Although it may seem like a trivial detail, an HOA can have a significant impact on your lifestyle, the changes you can make to your home and the monthly cost of living.

An HOA is a homeowner’s association: a group made up of all the homeowners in a defined area, run by a board of neighbor volunteers that oversee services such as the maintenance of common areas as well as standards regarding property appearance. The Community Association Institute estimates about 68 million people in the U.S. live under a community association, which includes HOAs, condominium associations, townhomes, master-planned communities and cooperatives.

HOAs are nonprofit corporations initially created by the developer who establishes the subdivision. To have his or her plan approved by the local municipality, a developer often agrees to form an HOA, which collects monthly dues from homeowners in the community for infrastructure costs – such as street and sewer maintenance, trash pickup and street lights – which would otherwise be the responsibility of the municipality.

Once an HOA is created, the developer establishes a declaration, which “is sort of like the constitution for the community association,” explains Andrew Fortin, senior vice president of external affairs at Associa, a homeowner’s association management company.

HOA rules: What to expect

All HOAs have boards, made up of homeowners in the complex who are typically elected by all homeowners. These board members will set up regular meetings where owners can gather and discuss major decisions and issues within their community. For major expenditures, the HOA will take a vote.

HOAs make sure that their community members follow certain rules. Homeowners receive a copy of these rules, known as “covenants, conditions, and restrictions” (CC&Rs), when they move in, and they’re required to sign a contract saying that they’ll abide by them.

CC&Rs can determine everything from what type of mailbox to the size and breed of your dog. Some HOAs require you to purchase extra homeowner’s insurance if you own a pit bull, for example; others prohibit certain breeds entirely. An HOA may even regulate what color you paint your house, and what kind of curtains you can hang if your unit faces the street – the idea is not to take control of owners’ lives but to maintain a common aesthetic within the community.

What if you violate the HOA rules?

That varies from place to place, but if you break the rules – or fall behind in paying your HOA dues – the consequences can be immediate. Some HOAs have the right to foreclose on your property, so make sure that you read your CC&Rs carefully before you buy into an HOA.

Community Association Management in Florida

Many HOA boards select association management companies to carry out all management functions. This helps HOA boards improve efficiency and subsequently save time and money. American Management Group offers community association management services and construction project management throughout South Florida. Contact us today for more information.


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