A homeowner association (HOA) is a group or an organization that creates and enforces rules and regulations for a subdivision, planned community, or condominium building. People who are members of HOA pay a monthly fee which HOA uses to maintain the shared space. Several issues such as trash removal, security matters, and other recreational activities are funded by an amount collected from all residents.
Elected home volunteers run HOA on behalf of all community homeowners. In some unfortunate cases, the HOA member board lacks resourceful people that has the skills to meet the needs of the community. When this occurs, the association decides to hire a management company to manage the association effectively. Not all HOAs are created equal. To understand this, let us study a brief history of HOA.
HOAs were formed in the United States during the mid-19th century as a way for land developers to market and sell their homes. The rapid growth of suburban areas led to the expansion of HOAs.
How is HOA different from each other
HOA will look and feel different depending on the community setup. However, their difference is always slight. They also have some common associations that are:
● Mandatory membership – automatic membership is awarded to every homeowner. This is different from any other kind of world organization where members must be subscribed to.
● Binding documents-legal documents are required for all homeowners.
● Line-based assessment-this is what gives HOA the power to enforce its rules.
Types of Association
HOA is a blanket term that describes many different types of associations. Different communities have their specific structured associations. Below are three clusters of HOA.
● Planned communities
It is a type of HOA where members of the community individually own his/her unit and the land it sits on. However, areas like pools, parks, and roads are owned by the association.
Individuals’ owners in this association own their unit and a percentage of all shared property such as the pool and gyms.
As the name suggests, there is shared ownership of shared spaces and units. So instead of members buying a home, they buy a membership certificate which will give them a direct entry to the co-operative.
From the above association types, we can jump to a solid conclusion that not all HOAs are created equal. The rules vary from one community to the next. The manner in which management is carried out varies from one state to another.