MelissaP1 (Alabama)
Posts: 13,836
Posts: 13,836
Posted:
Let's get to the TRUTH of a HOA and what it is. A HOA is typically a non-profit corporation. It is NOT one of which is considered a
"charity" to make donations too. Matter of fact donating or raising money outside of dues collection is subjected too taxation. There are a few "For-Profit" HOA's out there. However, most operate the same as non-profit and a majority of posters here are not part of one. For posting purposes, the information will be for Non-profit and owner operated.
HOA's were developed as "Sales tools" by developers/builders. It was a way to attract buyers to purchase by offering restrictions to the property or share costs of amenities. It's much cheaper 100 people owning a pool than 100 people having separate pools. The idea was to attract buyers into believing having restrictions and the ability to apply those restrictions would keep "home values" at an even keel or raise. The truth is that home values are not based on attractiveness or restrictions. It is based on numbers and facts. Those being location, size, amenities, and the price of homes sold/foreclosed on in a few mile radius. You may have a home that looks like a "million bucks" but does not mean it will sell for it. It just means it is more likely to be more ATTRACTIVE to a purchaser. The appraisal value of the lender is what you buy the house for.
HOA's are: Funded, managed, and operated by it's members. (When it's turned over to the owners). That means that whatever money the HOA collects in dues is to be used for it's operating costs and necessities. Don't collect enough money, your HOA may cut back on many of it's services. The board are elected from the general membership to represent the general membership on the daily operation of the HOA. They may do it themselves as self-managed or hire a Management company. HOA's are all VOLUNTEERS only. There is NO PAY or compensation made to the board nor owners. Basically, if you want something done in your HOA you either do it yourselves or raise the money to pay someone else to do it.
HOA's are mini-governments and quasi-corporations. They do act like governments in documents changes and elections. They act as corporations as if the President was to quit, the Vice-President does not automatically fill that slot. A new election amongst the board members can be held or maybe an appointment. There are limits on the responsibilities of each officer position. One can not always do the other one's job. Make sure to read your documents.
The main documents in a HOA are: CC&R's, Articles of Incorporation, and By-laws. You may have ACC documents as well. By-laws and ACC documents are INTERNAL documents to the HOA. The CC&R's are COUNTY filed documents and go with the deeds. Articles of Incorporation are STATE documents and are what incorporates the HOA. The CC&R's and Articles of Incorporations are the PUBLIC documents of the HOA and available at the Records department of the local courthouse. Some states makes it mandatory the seller turn them over to the buyer. Many states makes it the buyer's only responsibility. The HOA can give out or charge for a copy, but are considered a "courtesy" as you are NOT an owner/member until you sign the line.
These are just some of the FACTS about HOA's. You may not like them or they may not always apply for your state. I am sure other posters will post additional facts or clarifications. It's just you need to get an understanding of HOA's so you can grasp how to deal with living in one. Once you understand a few things you can then see where your problems or solutions may lie. Don't expect your board members to know this information. They most likely don't. It's a learning experience and the ONLY qualification to being in a HOA is to be an owner. That's it! So educate yourself if you are just an owner or a board member. A little knowledge can go a looong way!!!
"charity" to make donations too. Matter of fact donating or raising money outside of dues collection is subjected too taxation. There are a few "For-Profit" HOA's out there. However, most operate the same as non-profit and a majority of posters here are not part of one. For posting purposes, the information will be for Non-profit and owner operated.
HOA's were developed as "Sales tools" by developers/builders. It was a way to attract buyers to purchase by offering restrictions to the property or share costs of amenities. It's much cheaper 100 people owning a pool than 100 people having separate pools. The idea was to attract buyers into believing having restrictions and the ability to apply those restrictions would keep "home values" at an even keel or raise. The truth is that home values are not based on attractiveness or restrictions. It is based on numbers and facts. Those being location, size, amenities, and the price of homes sold/foreclosed on in a few mile radius. You may have a home that looks like a "million bucks" but does not mean it will sell for it. It just means it is more likely to be more ATTRACTIVE to a purchaser. The appraisal value of the lender is what you buy the house for.
HOA's are: Funded, managed, and operated by it's members. (When it's turned over to the owners). That means that whatever money the HOA collects in dues is to be used for it's operating costs and necessities. Don't collect enough money, your HOA may cut back on many of it's services. The board are elected from the general membership to represent the general membership on the daily operation of the HOA. They may do it themselves as self-managed or hire a Management company. HOA's are all VOLUNTEERS only. There is NO PAY or compensation made to the board nor owners. Basically, if you want something done in your HOA you either do it yourselves or raise the money to pay someone else to do it.
HOA's are mini-governments and quasi-corporations. They do act like governments in documents changes and elections. They act as corporations as if the President was to quit, the Vice-President does not automatically fill that slot. A new election amongst the board members can be held or maybe an appointment. There are limits on the responsibilities of each officer position. One can not always do the other one's job. Make sure to read your documents.
The main documents in a HOA are: CC&R's, Articles of Incorporation, and By-laws. You may have ACC documents as well. By-laws and ACC documents are INTERNAL documents to the HOA. The CC&R's are COUNTY filed documents and go with the deeds. Articles of Incorporation are STATE documents and are what incorporates the HOA. The CC&R's and Articles of Incorporations are the PUBLIC documents of the HOA and available at the Records department of the local courthouse. Some states makes it mandatory the seller turn them over to the buyer. Many states makes it the buyer's only responsibility. The HOA can give out or charge for a copy, but are considered a "courtesy" as you are NOT an owner/member until you sign the line.
These are just some of the FACTS about HOA's. You may not like them or they may not always apply for your state. I am sure other posters will post additional facts or clarifications. It's just you need to get an understanding of HOA's so you can grasp how to deal with living in one. Once you understand a few things you can then see where your problems or solutions may lie. Don't expect your board members to know this information. They most likely don't. It's a learning experience and the ONLY qualification to being in a HOA is to be an owner. That's it! So educate yourself if you are just an owner or a board member. A little knowledge can go a looong way!!!
Former HOA President
