Let’s get oriented with the HOA lingo.
An administrative fee is charged to the HOA by its management company, or third party vendors for professional services rendered outside the parameters of the assigned task. The administrative fee typically pays for costs of paperwork, phone bills, administrative staff’s time, or other costs that an office might incur. For example, the HOA or its management company may charge you an administrative fee for the processing and handling of:
- Violation Notices
- Architectural Reviews
- Delinquent Assessment Notices
- Legal Processing
- Lien Processing
- Paper/Postage/Copies, etc.
Alteration of Improvements
HOAs regulate exterior alterations and improvements in accordance with the HOA’s architectural standards. Therefore, an owner must obtain prior approval to make physical improvements or modifications to the owner’s exterior of the property. Examples of some exterior alterations or improvements include:
- Structure design
- Solar Panels
- Satellite dishes
- Paint colors
- Window tinting and coverings
- Balcony surfaces, flooring
HOAs typically have a committee to control the architectural standards of the community and manage the architectural alteration application and approval process.
Articles of Incorporation
In general, the Articles of Incorporation (the “Articles”) are filed with the Secretary of State identifying the Association as a nonprofit corporation. The Articles typically contain the Association’s:
- Registered agent and office
- Purpose and powers
- Voting Rights
- Liability of Directors
Assessments (HOA Fees)
Assessments are mandatory HOA fees that all members in a common-interest development must pay. Assessments may be designated as Regular Assessments, Maintenance Assessments Extraordinary Assessments, or Special Assessments used to cover the costs for the management and maintenance of the Association’s common areas.
Board of Directors
The Association’s Board of Directors (the “Board”) is elected by the membership to manage all aspects of the Association’s business affairs. Under the Declaration and the law, it is the Board’s duty to promote the health, safety, and welfare of the Homeowners and the fiduciary duty to act in the best interest of the Association and its members. The duties and powers of the Board are outlined in the State’s Corporations Code and the Association’s governing documents.
The Association’s Bylaws contain guidelines for the operation and management of the Association. In the Bylaws, you find provisions related to the Associations’:
- Purpose of the Board
- Officer designation
- Term of office
- Powers and duties
- Meeting rules and schedules
- Quorum for action by Officers
- Nomination and Election of Officers
- Removal of members
- Liability of Officers
The common area of a common interest development (CID) constitutes everything that is located within the community development except the units or lots owned by the association’s individual homeowners, also known as, “separate interest.” Examples of typical common areas within CIDs are:
- Everything outside the owner’s lots or parcels.
- Non-public streets
- Community amenities
- Development walls
- Entrance/Exit gates
- Everything located on the outside of the Unit’s interior perimeter walls, floors, and ceilings.
- Community Amenities
To get a clear understanding of what constitutes a common area in your development, review your Association’s governing documents or your state’s real property codes.
COMMON INTEREST DEVELOPMENT (CID)
A Common Interest Development (CID) is a type of home ownership in self-governed private communities. CIDs are developed in many different types and styles, such as single-family homes, condominiums, townhouses and apartment-like multi-story high rises known as cooperatives.
A Condominium Association is a type of common-interest development governed by the elected Board of Directors in accordance with the Association’s governing documents and applicable laws. Condominium owners own their unit and a portion of Association’s common area which is owned jointly by all owners in the Association.
The cooperative housing also know as a co-op, is a type of real estate ownership of a group of dwellings or apartment buildings owned by a corporation. The co-op is governed by the elected Board of Directors in accordance with the co-op’s governing documents. The members of the co-op are stockholders who have the right to occupy a unit for as long as he/she owns the stock. The Corporation owns the title of the real state.
Declaration of Covenants, Conditions & Restrictions (CCR’s)
The Declaration of Covenants, Conditions & Restrictions (“CC&Rs” or “Declaration”) contain the contractual obligations of the Association and its members. In part, the CC&Rs sets forth the guidelines on how the Association through its Board of Directors may operate and govern to protect the interest of the Association and its members. It also contains the members’ obligation to maintain and pay assessments.
The following list of documents are known as the “governing documents” that govern the common interest developments and homeowners.
- Declaration of Covenants, Conditions & Restrictions (CC&Rs)
- Articles of Incorporation
- Plats of Survey and Easement Agreements
- Rules and Regulations
The “HOA” acronym stems from Home Owners Association. HOA is typically used to reference the following types of common-interest development communities:
- Single-family homes
A Homeowners Association (“HOA”) is a private incorporated, or unincorporated planned development managed by its elected Board of Directors according to the HOA’s governing documents. The HOA’s membership is comprised of owners of properties who have the obligation to maintain and pay HOA dues. Likewise, the HOA has the obligation to maintain the common areas, and the right to enforce covenants agreed to by its members.
Membership is automatic when a person acquires ownership of a property in a common interest development.
Quorum is the presence of a required number of members in a meeting for the proceedings to be valid.