Understanding an HOA’s purpose and obligations to owners
Today there are over 351,000 homeowner associations (HOAs) in the U.S. A steep increase from the less than 500 that existed in the 1960s. In fact, HOAs account for more than 53 percent of owner occupied homes in America.
With so many citizens living in HOA managed communities, it’s important for owners to understand the role of the HOA and what to do when issues arise.
Purpose and obligations of an HOA
The central purpose of an association is to maintain properties and common areas of the community by adopting and enforcing governing rules to preserve and enhance property values. Common areas the HOA bears responsibility for vary by community, but often include roads, pools and corner parks. Homeowners pay dues to the HOA to pay for basic upkeep and fund future needs.
The governing documents of an HOA function as a contract, dictating the responsibilities of the HOA. The HOA must govern the community within the scope of their authority without infringing on basic homeowner rights. All actions taken by the HOA need to be in the best interest of the community and the members.
HOA officers that serve on the board are often volunteers who live within the community. To effectively govern a community, the HOA relies on extensive governing documents which outline prohibited actions and expectations for homeowners. Documents include the declaration of covenants, conditions & restrictions (CC&Rs), bylaws, articles of incorporation, policies and rules and regulations.
Rights of homeowners
While living in an HOA does limit a homeowner’s freedom to make change, homeowners retain basic rights under state and federal laws. Basic homeowner rights include:
- Access their property.
- The right to participate in association meetings.
- The ability to receive annual disclosures, such as budget summaries, status of the HOAs financials and notices.
- The right to inspect HOA records, such as budgets vendor contracts, meeting notes, tax returns and financial statements.
- The ability to appeal board decisions.
- The right to display the U.S. flag.
Problems arise when boards have too much power and not enough oversight. An abusive board acting beyond the scope of their authority may need reigning in from outside assistance. Homeowners facing basic rights violation by an HOA should seek legal aid, as fighting the board alone generally does not resolve the issue.