Everyone wants to get as many amenities as possible when buying a home, but is buying a property that requires you to join a homeowner association the best option? In some states, close to 20 percent of homes belong to homeowner associations. They enforce neighborhood standards and assume responsibilities that local government is unwilling or unable to handle. You'll learn exactly how they operate and evaluate their pros and cons in this informational guidebook written by C.J. Klug, who has been involved with homeowner associations for more than twenty-five years. Klug examines a wide range of HOA-related topics, including ¿ why HOAs were created and different HOA types; ¿ what factors to consider when deciding whether to join an HOA; ¿ what HOAs do and how they function; ¿ answers to commonly asked questions; ¿ operating guidelines for HOAs. Don't be among the buyers who fail to realize that joining a homeowner association locks you into a contractual relationship. Whether you are an investor or someone who is ready to live in a new home yourself, it's imperative to understand Homeowner Associations.

HOMEOWNER ASSOCIATIONS

What you should know before buying in an HOA, and how to become an effective HOA member.By C. J. Klug

iUniverse, Inc.

Copyright © 2010 C. J. Klug
All right reserved.
ISBN: 978-1-4502-5840-1

Contents

Dedication...............................................vPreface..................................................viiWhat Is An HOA...........................................1Is An HOA The Right Decision.............................3Factors to be considered:................................3HOA Housing Types........................................11Why HOAs Were Created....................................12Who And When?............................................13What Does The Association Do?............................13How The Association Functions............................14Operating Rules..........................................15Association Is A Business................................18Employees Or Contract Staff..............................18Who Decides How An HOA Operates..........................22Determining Where The Money Is Spent.....................23Successful Bidding.......................................24Assessment Determination.................................26Reserves.................................................28Taxation.................................................29HOA Streets/Controlled Access............................29No One's Perfect.........................................30Legal Documents..........................................31Insurance Policies.......................................32Architectural Control....................................33Associations Working Together............................34Litigation...............................................35State/Federal Regulations................................35HOA Goal.................................................36Support Enforcement......................................36Communicating............................................37Press/Media Relations....................................38Promoting After the Developer Leaves.....................38Doing Your Part..........................................40Out Of Control Boards....................................40Summary/Conclusion.......................................41Shorter Board Meetings...................................43Rules Enforcement........................................45Anonymous Complaints.....................................45Supporting Enforcement...................................46Board Agendas............................................47Meeting Minutes..........................................49Member Support of CC&Rs..................................50Changing CC&Rs...........................................51Common Area Encroachments................................53Fine Criteria............................................54Handling Rumors..........................................55Controlling Legal Expenses...............................56Election Process.........................................58Board Member Qualifications..............................59Recruiting Board Candidates..............................60Volunteer Guidelines.....................................60Committees...............................................62Collecting Delinquent Assessments........................63Police Enforcement.......................................65Assessment Increases.....................................65Bid Shopping.............................................66Workers Compensation Insurance...........................68Directors & Officers Insurance...........................69Reserve Funds............................................70Building Reserve Funds...................................71Selling Common Area Amenities............................72Investing HOA Funds......................................73Furnishing Legal Documents...............................75Employee Versus Management Companies.....................76Changing Management Companies............................77Professional Designations................................78Recruiting Employees.....................................80Gift Policy..............................................81State Law Preemption.....................................82Unanticipated Changes....................................84Member Disputes..........................................84Ombudsman................................................85Member Directories.......................................87Press Relations..........................................89Delinquent Member Information............................90Fight Or Flight..........................................92Meeting Presentations....................................93Neighborhood Feuds.......................................95Closing Comments.........................................99Glossary.................................................103About The Author.........................................107

Chapter One

HOMEOWNER ASSOCIATIONS

What you should know before buying in an HOA, and how to become an effective HOA member.

By C. J. Klug

WHAT IS AN HOA

Home ownership in the past few years has undergone a lot of changes where owners have desired shared amenities, maintenance of common areas and enforcement of neighborhood standards, while at the same time government has been reluctant to assume such responsibilities. In some States, it is estimated that close to 20% of homes are now located in Homeowner Associations. The expectations are that the growth of homes in Homeowner Associations will continue because many local governments do not want to take on the financial liability of new streets, parks, landscaping, etc. due to budget concerns. These communities with shared common area facilities are generally referred to as a Common Interest Development (CID) and need a managing entity, a Homeowners Association (HOA), which may sometimes be referred to as a Property Owners or Community Association. As a property owner in an Association you are automatically a member of the association of owners which is in charge of operating and maintaining the common area and services to its members. As a member, you must also share in the expenses by paying regular assessments to the Association.

An HOA is generally a private, Non-profit Mutual Benefit Corporation in which all property owners automatically are members when property is purchased and will have certain rights and obligations. An Association does not have to be incorporated, but from a legal and liability standpoint it is strongly recommended. The Association runs things as a sort of mini-government, operating under the Covenants, Conditions and Restrictions (CC&Rs), originally established by the developer, and in some areas with additional regulations set by State Law. In an Association the majority rules and what the group wants, within parameters of the recorded documents, you have to accept or convince the group to change. The Association's automatic membership should not be confused with a voluntary civic or social club where you can "quit". As long as you own your property you are a member. An Association may only consist of a few units that share common walls or a driveway, or can be several thousand homes with private streets, clubhouses, hundreds of acres of common area landscaping and a variety of recreational facilities.

Your interests as a homeowner are in concert with the continuing success of the Association. If the Association...