Monday, May 31, 2010

What is a homeowner’s association (HOA)?

[This article first appeared in the Chattanooga Times Free Press]

Q: What is a homeowner's association?

A: A homeowner's association (HOA) is an association formed by property owners or developers to take charge of the shared amenities and common property areas in the neighborhood such entrance, playgrounds, pool, tennis courts and walkways. They are also authorized to develop rules and regulations that will aid in the protection of the interest of the residents. Property owners are required to abide by the HOA rules to avoid fines and conflicts. In addition to neighborhoods, there are also HOAs in condominium and townhouse developments.

The HOA is made up of a board of directors consisting of property owners in the development. Although it is a privilege to be among the board of directors of the HOA, it comes with great responsibility. Bear in mind that the board of directors is responsible for the many things in the neighborhood. They have to make sure that the rules and regulations are properly implemented.

In addition to management, there are also other things that the HOA attend to and oversee such as maintenance and repairs. The HOA has to make sure that the amenities are in good working condition. Bear in mind that the property owners will be using them and they will complain about problems they encounter. Scheduled maintenance is a responsibility of the HOA as well and to ensure that no resident would be using the facility during the scheduled maintenance.

The collection of monthly dues is also part of the HOA duties. In addition to that, they have to ensure that the funds are properly used and distributed. They should also try their best to maintain the trust and confidence of the other members. The HOA should provide reporting of the financial activities to the property owners.

It is essential that you consider the HOA rules before deciding to purchase a property in a certain community. This is important because there may be exiting rules that are not acceptable to you. For instance, the HOA monthly dues may be too high and more than what you can manage or want to pay. Many HOAs have mandatory monthly or annual fees. Also, there could be rules that restrict use that you would be unwilling to accept such as rules regarding pets. This is especially true if you are going to consider a condo.

It is essential that you know and understand the rules before you move to the neighborhood so that you can contemplate first whether to pursue the purchase or not. If you do not like the regulations, then you can still look for a community with rules that are more acceptable to you. This is also essential so that you can set your expectations. This will also make it easier for you and your family to make the necessary adjustments.

A HOA is very important. They are organized to manage and keep the order in a certain neighborhoods and developments. Without an HOA, it will be difficult to keep the order, enforce rules and maintain necessary upkeep in the community. It would also be difficult to assign responsibility in terms of the maintenance and repairs of the different amenities and facilities. Although there are some rules and regulations you may not agree with, bear in mind that they are for the good of all the homeowners in the community.

A successful HOA gives property owners a way to resolve minor disputes, as well as to organize repairs or maintenance of common property areas. Many property owners find the HOA to be well worth the extra fees associated with owning a property. When well administered, the HOA can provide predictability in owning a home and clearly delineate both the property owner's and the association's responsibilities.

Get answers to questions you might have about real estate from Randy Durham, who is president of the Chattanooga Association of Realtors and a broker with Keller Williams Realty. His column appears on Sundays. Send your questions to Business Editor John Vass Jr. at

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