Associated Value: What Does a Property Owners Association Do?

Associated Value: What Does a Property Owners Association Do?

It’s no coincidence that over 73.5 million Americans live in HOA communities. HOA living offers several benefits, including serene gated living, easy access to facilities like gyms and swimming pools, and most importantly, property value preservation.

These benefits don’t just happen. A lot of credit goes to the homeowners’ or property owners’ associations running these communities.

In this article, we’ll tackle the question: what does a property owners association do? You’ll have a clear understanding of how these organizations can make or break an HOA community.

Let’s unpack this:

Creating HOA Laws

Every HOA community has its covenants, conditions, and restrictions, also known as bylaws. These outline regulations and guidelines on a wide range of aspects, including:

  • Holiday decorations
  • Pet ownership
  • Parking
  • Home maintenance
  • Architectural standards
  • HOA fees
  • Property rentals.

It’s important to note that once people purchase homes in a planned community, the first order of business is to elect an HOA board. Some homeowners will typically volunteer for election as directors of the board.

The board, led by a president, will assume leadership of the community, and they’ll start by creating the community’s by-laws, in consultation with the residents.

Enforcing HOA Rules

With the CC&Rs in place, homeowners must abide by them. But it’s not uncommon for some residents to violate the rules.

For example, if the community only allows residents to have emotional support and service animals, some households can still choose to keep other types of unapproved pets, which is against the rules. Or, if short-term rentals aren’t allowed, you wouldn’t be surprised to find that some homeowners have listed their properties on Airbnb!

HOA rules exist to preserve the community’s standards. If someone is not observing the rules, they need to face the consequences, as outlined in the CC&Rs. It’s the job of the property owner’s association to enforce these rules without fear or favor.

Management can, for example, ask a homeowner keeping a disallowed pet to get rid of it. If the CC&Rs prescribe a fine for the violation, the owner’s association is mandated to collect it.

HOA rules aren’t set in stone. A rule can be scrapped or changed to suit the evolving needs of residents. When residents raise this issue, the association leadership has to take it up and spearhead the necessary reforms by calling meetings and organizing a vote if needed.

Managing HOA Finances

HOA homeowners are required to pay a monthly fee to the association. The community needs these funds to finance its operations.

The average HOA fee in the U.S. is $170. If a community has 500 housing units, it will collect about $1.02 million annually. Large-scale HOAs handle millions of shillings.

This is a lot of money, and somebody needs to take charge of its billing, collection, and management. It’s the property owners association’s job to do that. It will implement an effective method for collecting the fees, ensuring all homeowners are paying up on time.

HOA boards have a fiduciary duty. They have to spend these funds in the best interests of their associations.

As such, they’ll draw budgets and allocate the funds prudently. There has to be total transparency in how HOA funds are used; otherwise, you’ll start hearing cases of fraud, corruption, and embezzlement.

Maintaining Communal Areas

Shared communal areas like clubhouses, fitness studios, swimming pools, driveways, and basketball courts need to be maintained, but whose responsibility is it? The homeowner’s association must keep the communal assets in great condition at all times. This includes performing preventative maintenance, as well as repairs when needed.

A significant chunk of the money collected from HOA fees goes into the long-term maintenance and repair of these assets. You’re probably wondering how the board gets this job done. Do the directors perform maintenance inspections, for example?

In most cases, an HOA will outsource all maintenance work to an external contractor. The company will be in charge of inspecting, maintaining, and repairing the HOA’s properties, excluding the housing units. This is because homeowners have a responsibility to take care of their own properties.

Vendor Supervision

Speaking of outsourcing, homeowner associations typically hire a third-party company to oversee the daily management of the estate. Considering that HOA boards are comprised of volunteers who usually have no property management experience, it’s easy to see why outsourcing to an association management company is a smart move.

A full-service company, like this HOA manager in Cedar Park, will take over all the essential duties of an HOA board. However, this doesn’t mean the board’s work is done.

Ultimately, the buck stops on the board. If the contracted management company is doing a shoddy job, residents will blame the people who hired it.

As such, with outsourced services, a property owners association retains oversight duties. The board has to do due diligence before settling on an HOA management company, and after hiring, it must keep a close eye on the performance of the team. This ensures the company performs its duties to the standards that have been agreed upon.

Conflict Resolution

In any community, there will always be conflicts among members. HOAs are no different.

From time to time, or even often, homeowners will disagree on various issues. For example, a homeowner who likes to have parties that are a little bit too loud for the neighbors might not be so welcome in the community. Or there’s that resident whose dog just can’t stop barking, causing a great annoyance in the community.

Regardless of the cause of the conflict, the association is the arbitrator. It seeks to find lasting solutions to homeowner conflicts and works to find ways to prevent the occurrence of such conflicts in the future. 

What Does a Property Owners Association Do? A Lot!

So, what does a property owners association do?

The short answer is everything to keep a community thriving. From creating and enforcing HOA bylaws to taking care of the basic stuff like repairs and maintenance, an owners’ association is the lifeblood of a planned living community.

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