General HOA information

Who is the HOA? What does HOA stand for?

HOA stands for HOMEOWNER'S ASSOCIATION.

What does that mean?

That means ALL the homeowner's of the property have agreed to maintain in "Association" with eachother to maintain and operate the "Common Areas" to a set of agreed upon standards and regulations(By-laws and CC&R's) of the homeowners descretion.

ALL the homeowers have a SIGNED CONTRACT with each other that each one will obey these set rules or face consequences for failure to do so(Lien, fines, foreclosure). It was most likely attached to a PUD rider with your mortgage company and signed at your closing.

Many people are NOT aware of everything they are signing at a closing nor are the lawyers and realtors required by law to inform the buyer of the HOA rules. Legally, it is looked upon as the BUYER's RESPONSIBILITY to be informed.

The HOA's documentation should be on record at the local courthouse Records department. It should also have been passed on by the previous owner if possible but NOT required.

As matter of fact, the contract to agreeing to the terms of being in a HOA generally states: "I the (buyer) have been informed of the rules of the HOA and AGREE to the terms". This wording does not indicate the source of the buyer's information it simply states that the buyer agreed they were informed whether they were or not.

Most likely it was the Builder/Developer who FIRST put this association/corporation together. Some HOA's get turned over to the homeowner's to run or they continue to operate under the Builder/Developer until the Builder/Developer decide to move on.

The purpose for the Builder/Developer to form a HOA may vary some. For the most part, it is developed as a "Sales Tool". The concept is that the property is maintained uniformly so to look clean and nice for potential buyers. That is why a majority of HOA's are responsible for landscaping as their main responsibility. Outside appearance of the units/homes is usually a consideration with condo's and townhomes as well.

For legal purposes and control of the property, the HOA should be incorporated. It can be a non-profit or for-profit corporation. A for-profit one is usually for HOA's that are franchised and more than one in the area. A non-profit defines the majority of HOA's. This helps reduce the taxes for the most part. Typically, HOA's owned by the owners only stay non-profit.

Although NOT all HOA's are incorporated they may just have CC&R's, By-laws, Management Company, or Archetictual Control Committees (ACC). These rules are still enforceable. However, the HOA may not be considered "business/corporation" it may now be considered a true "Association". That means the homeowner's have agreed upon the rules and the terms of the contract but on a more "casual relationship".

Now, when asking "Who is the HOA responsible or can reported to?" You may now see the relationship with the HOA means you and your neighbors or possible Builder/Developer. There is no "They or Them". The responsibility of your HOA is the homeowners (your neighbors) themselves. The HOA is ONLY funded by the members and for the members.

The reason so many HOA's are run badly is because it is directly the result of non-interested owners. The true people who run the HOA are the owner's who either "Get it" and volunteer or ones that have "Control" issues.

Either way, none of them are educated, experienced, or know everything involving running a HOA. How many professional business people do you know intentionally move into a HOA to run it? Not many. The people running a HOA don't have ALL the answers. They are just everyday people who have an investment to protect just like everyone else in the HOA.

It is THOSE owner's who's wishes and ideas get forced upon the others. Why wouldn't it be? Generally, the people who have an interest in their property/HOA nominate themselves to be on the board or in an office position. There may be little oposition to them being voted in due to the lack of participation on the entire memberships behalf.

That is why your VOTE and everyone else's vote in the HOA is so important. You may think it doesn't matter but if you have 50 members and only 10 of those participate in the HOA, then the majority of the members has to deal with the ideas of those 10 people. Doesn't sound fair now does it?

That is why it is so important you keep your voting and participation level active.

Management companies are involved with some HOA's. Management companies are SUB-Contractors of the HOA. They are HIRED by either the Homeowner's or the Builder/Developer to handle the financial daily operations of the HOA. The homeowner's may choose this option as many are not educated nor have the time to monitor the everyday operations of their HOA. A larger HOA it is much easier to go with a Management Company versus a small HOA. The Builder/Developer hire one because they may have interest in one or are one themselves.

This should clear up some issues regarding what a HOA is and defining it. Understanding the set-up of a HOA and it's responsibilities, may allow you to understand why the HOA does some of the things it does. It is always up to the Homeowner's to change or amend the rules if they don't like living by them. It is a lengthy time consuming procedure, but the power is in the hands of the homeowner's.

Sometimes the simplest steps to take to change your HOA is at home and by your participation.

Hi Melissa:

In Oregon, new subdivisions are required by law to provide a stormwater retention pond, to receive stormwater coming through the storm sewer system and hold/release it over a period of time (usually they are designed to drain over a 24 to 48 hour period when full) with an overflow grate to handle large rain events. These ponds work both as biofilters as well as buffering the surge of water through the public stormwater system and into streams; they work as flood control, even with the largest rain events, since some water is held and released more slowly.

Depending on the county/city/storm drainage jurisdiction's choice or policy, these ponds may be owned by the owners in the subdivision (therefore requiring an HOA to hold & manage the property) or by the city/county/storm drainage jurisdiction.

Additionally, the city/county may require private parks (in lieu of the city/county providing them), private streets with private street lighting, common area landscaping along major streets, etc. which would require the formation of an HOA. Currently, in Oregon over 90% of new developments have an HOA due to the regulations and laws.

So, it's not always a developer choice on whether there is an HOA. In the cases where there is common property held and a formal organization (as opposed to simply having deed restrictions) it is important for the HOA to maintain its corporate status, in order to hire landscapers and/or managers, as well as to procure insurance coverage.

J. Patrick Moore, CMCA

As JM2 points out in his state, here in NC there is a 10% open space clause that mandates any subdivision must provide 10% open space (or more) therefore requiring it to be an HOA, POA, SOA type of Association.

I need to move out to the wild west, sounds a lot better place. Unfortunately here in tornado alley we don't do that, probably afraid a twister will take it away.

MelissaP1 - As I stated, there is a seller's disclosure statement. This is for the SELLER to fill out, not the seller's or buyer's agent. In the event that the SELLER lies on the disclosure statement, the seller's agent and buyer's agent are somewhat protected from liability. Realtors are held to an extremely high code of ethics and can loose their licenses for any impropriety. In the northeast, records on any sale must be kept for 6 years, and 6 months for all lost sales. If the seller's agent knows the SELLER lied, the agent and the broker can and must withdraw inform the seller they will drop the sale if the seller isn't honest. For sales when a buyer's agent is hired, the buyer's agent can procure the disclosure statement from the seller. The buyer's agent must have access to maintenance fee, and tax information, can request a copy of the by-laws, and cc&r's. All of which will assist the buyer's agent and buyer. The buyer's and seller's real estate agent and brokerage firms MUST not ever inform the BUYER of the exact cc&r's and by-laws. But must only provide access to the most current version.