Homeowners Associations

A Homeowners Association (HOA) is an organization created by a real estate developer for the purpose of controlling the appearance and managing any common area assets during the marketing, managing, and selling of homes and sites in a residential subdivision. It grants the developer privileged voting rights in governing the association, while allowing the developer to exit financial and legal responsibility of the organization. Typically the ownership of the association is transfered to the homeowners after selling off a predetermined number of lots. It allows a civil municipality to increase its tax base, but without requiring it to provide equal services to all of its citizens. Membership in the homeowners association by a residential buyer is typically a condition of purchase. A buyer isn't given an option to reject it. Some Homeowner Associations hire and retain property management companies. The Board of Directors is responsible for the retention of these companies.

Most homeowner associations are incorporated, and are subject to state statutes that govern nonprofit corporations and homeowner associations. The State oversight of homeowner associations is minimal, and mainly takes the form of laws which are inconsistent from state to state.

A growing form of housing in the United States today is common-interest developments (CIDs), a category that includes planned unit developments of single family homes, condominiums, and cooperative apartments.

A homeowners association is incorporated by the developer prior to the initial sale of homes, and the Covenants, Conditions, and Restrictions (CC&Rs) are recorded when the property is subdivided. There is no mutual agreement between buyer and seller regarding the CC&Rs. If an owner sells the encumbered land/home, he ceases to be a member of the association and the new owner is forced to become a member. All members must pay assessments to and abide by the restrictions of the association.

Homeowner associations can compel homeowners to pay a share of common expenses, usually per unit or based on square footage. These expenses of a community are established in the developers budget and are to match items described in the organizational document and plats and when they are used for plant and equipment a reserve study should be incorporated into the disclosure documents allow prospective owners to have a sense of the finical obiligations they are going to be responsible for while members of the community.

Some associations are somewhat like towns in that they are complete with private roads, services, utilities-electric including street lights, gas, water, amenities, commonly owned buildings, pools, and even schools. Many condominium associations consider the roofs and exteriors of the structures as the responsibility of the association. This would be spelled out in the community documents so that reserves could be established for the repair and maintenance of them as well as the insurance to cover these common or limited common area elements.

Other associations have no common property, but may charge for assumed services or other matters. This other matters could include the community website, bulletins, insurance, special assessments, security and legal issues.

An HOA provides people with shared neighborhood values, an opportunity to enforce regulations, consistent with overarching statutory constraints, to achieve a community representative of such values. In doing so, an HOA inherently restricts the rights that would otherwise exist for its members based on municipal codes. For instance, a degree of conformity is often required in exterior appearance of single family homes and there are often time limits and/or restrictions to activities generating noise.

These bylaws can be limited in various degrees by state laws, with some overriding federal judicial or statutory limits. Board members or officers are elected by the homeowners, with the ability in some states for the membership to remove board members, with some difficulty, even during term.

Homeowners Associations generally have meetings for the entire board and membership. These meetings are generally monthly or sometimes quarterly, and focus on handling the Homeowners Association's business. In some states, the meeting's minutes must by law be made available for viewing 24 hours a day online, requiring the HOA to launch or purchase a website.

Many homeowners associations include management of a development's recreational amenities, maintained for exclusive use of its members. This can allow an individual homeowner access to a maintained pool, clubhouse, gym, tennis court or walking trail that they may not be able to otherwise afford to maintain on their own.

Each member of a homeowners association pays assessments that are used to cover the expenses of the development. Some examples are landscaping for the common areas, maintenance and upkeep of the subdivision's amenities, insurance for commonly-owned structures and areas, mailing costs for newsletters and other correspondence, employment of a management company or on-site manager, security personnel and gate maintenance, and any other item delineated in the governing documents or agreed to by the board of directors.

Let the professionals at the Law Office of Jeffery R. Jones properly handle your Michigan homeowners association issues.