How Does A Homeowners’ Association (HOA) Work?

Whether you plan to relocate, renovate, or move into a new rental home, you might want to check out the homeowners’ association (HOA) rules. 

These regulations are crucial in knowing your responsibilities as a property owner or occupant. It can also influence your access to shared amenities and services. In most cases, HOA rules must be considered when renovating your property to avoid issues.

This article discusses the basics of HOAs and how they help keep communities organized.    

Understanding Homeowners’ Associations  

Homeowners’ associations are common in most communities, especially middle- to high-end subdivisions, planned communities, and multi-level residential properties like condominiums. 

These organizations, also known as property owners’ associations, community associations, housing cooperatives, or condominium communities, are typically established by real estate developers. They’re responsible for crafting and enforcing specific rules to maintain, if not boost, the value of houses within their control. Communities also have the choice of outsourcing the likes of Myrtle Beach HOA management services to handle their resources and operations in the best way possible.

Homeowners’ Association: Structure  

Homeowners’ associations are independent bodies organized as not-for-profit corporations. As such, these entities are run by property owners elected as members of the board of directors. These volunteers are primarily responsible for ensuring all rules are properly enforced and complied with. Anyone who owns a property within their jurisdiction becomes an HOA member.

The organization runs according to the rules stipulated in its bylaws and covenants, conditions, and restrictions, which they must submit alongside the incorporation articles upon registering. 

As of 2022, an estimated 363,000 community associations exist in the country, with most residents and property owners expressing high satisfaction with how they’re being run and governed.  

Homeowners' Association

How Do HOAs Work? 

Because of their independent nature, HOAs are governed by unique communal laws. However, these rules must be patterned after local, federal, and state housing regulations. 

As mentioned, the governing documents serve as the foundational basis of every community association.

Below are the most important documents that define the actions, rules, and regulations imposed by an HOA:

  • Articles of incorporation: While often associated with business formations, the articles of incorporation, often known as a charter, is a legal document that indicates an organization’s formation. 
  • Bylaws: This document presents the HOA’s rules and regulations and establishes the roles of the board members and officers. It also indicates the term limits, voting guidelines, meeting frequencies, and budget use. 
  • Covenants, Conditions, and Restrictions (CC&Rs): This legal paper discusses the association’s rights and responsibilities, including those of the property owners and board members. It also serves as the basis for community rules and standards for property maintenance.  

While essential, these governing documents aren’t set in stone. Amendments in local, state, and federal housing laws could warrant changes in the established community rules.    

Can The Rules And Bylaws Be Amended? 

The board may issue additional rules to clarify certain regulations or introduce new measures. Conversely, property owners can propose reviews and changes to HOA rules. The board may deem seeking members’ votes for minor changes unnecessary, whereas significant revisions typically require them.       

Common HOA Rules   

HOAs are legal entities recognized to create and enforce policies for their members. Community associations have different applicable rules, although most cover the following aspects:  

  • Access to amenities  
  • Acting on owners’ complaints and disputes
  • Setting and raising HOA fees
  • Imposing special charges
  • Exterior maintenance and renovations (i.e., paint colors and fence types)
  • Lawn design and landscaping 
  • Holiday decorations  
  • Home occupancy and rental terms 
  • Vehicles and parking 
  • Keeping pets 
  • Trash collection and recycling 

Depending on state and HOA laws, owners who violate the rules may be fined. It’s in a member’s interest not to ignore such fees, as they can accumulate. In serious cases, a lien may be placed against your property, making it difficult to sell your home. While rare, serious and repetitive breaches may force an HOA to file a lawsuit against a member.     

HOA Fees 

All HOA members are required to pay certain charges, mainly to cover the maintenance expenses for community amenities. These include payments for parking lots, garbage collection, swimming pools, landscaping, and security enforcement. If you’re a renter, you must review the tenancy terms to determine whether these payments are your landlord’s responsibilities or yours.

Homeowners pay anywhere from USD$ 100 to USD$ 1,000 for HOA fees, depending on the available services and utilities, property type, location, and the group’s operating costs. Luxury communities have higher fees. 

Besides covering maintenance costs, these fees form part of the association’s reserve fund for special projects or emergency expenditures. 

Concluding Thoughts  

Homeowners’ associations enforce rules and standards to keep properties well-maintained and their members happy. Their operations vary slightly and are dictated by distinct covenants, conditions, restrictions, and bylaws. As corporation-like entities, HOAs must keep good financial records. Whether a property owner or a tenant, it pays to know the association rules to understand your responsibilities and rights.     

What can you say about your homeowners’ association?  Feel free to comment below.