Question: What is a homeowners association?
Answer: A homeowner association, legally known as a common interest development, is a non-profit corporation that is controlled by a volunteer, non-paid board of directors elected by the property owners. The purpose of these associations is to maintain the integrity and appearance of their community's common areas. A common-interest development may be a single-family community, townhome development, condominium development, or a stock cooperative.
Question: Do I have to belong to the association or can I "opt" out of the services offered by the association?
Answer: All persons owning a unit within a community automatically become members of the association and are required to pay the annual assessment. The assessment covers the cost of expenses that are shared equally by all members and cannot be "opted" out of by non-use of the common areas or selection of another service provider.
Question: What do assessments pay for?
Answer: Subject to your Association documents the dues assessment covers the expenses of operation and maintenance for items as deemed necessary and appropriate to enhance the operations of the association. This includes such expenses as insurance, taxes, utilities (for common areas only), grounds maintenance, administrative costs, and professional fees, just to name a few.
Your dues also cover the funding of reserves which are applied to the future repair or replacement of the major components that the association is responsible for such as roofing and painting (in a condominium or attached townhome), street repair (if private streets), pool/spa resurfacing, clubhouse refurbishment, fence and wall repairs/replacement, signage, and lighting.
Question: What is the role of the management company?
Answer: Services can vary depending on a particular community's needs, but in general, management carries out the day to day operations of the association as directed by decisions of the Board of Directors. The Board establishes procedures and policies that provide Management with the authorization to carry out certain processes.
The manager is to guide the Association, advising the Board based on their training, expertise, and experience. (That's why hiring a credentialed manager is important!) The manager is to have a working knowledge of the Association's documents, advise the Association when to utilize legal counsel, serve as liaison between the Board and the members as well as the Board and their contractors and professional service providers and to carry out the Board's decisions. Management is NOT the decision-maker of the Association; the Board is.
Activities of the management team include general management functions as they relate to financial accounting services, overseeing the property maintenance services provided by subcontractors selected by the Board, bidding and contract negotiations with subcontractors, serving as a liaison with the association's professionals (legal counsel, accountant, and insurance agent), legal/government regulation compliance, and consulting/advisory services.
Question: How do I report a violation of covenants in my community?
Answer: Governance of the community's standards is absolutely a "team effort." The manager (or site inspector) is on site typically twice a month to monitor covenant compliance, but sometimes situations occur between inspections that need prompt attention. Homeowners are encouraged to report issues that may be violations of the covenants to the management office for follow up. There are a couple ways for this to be accomplished:
- Utilize the "Report a Violation" form on this website. Your report will be forwarded directly to the manager of your association.
- Email your manager or administrative assistant with information regarding the alleged violation.
- Call the manager or administrative assistant; realize, however, that the manager may need to ask you to put your information in writing. This is especially true if the violation involves activity that the manager cannot physically observe on his/her next site inspection. You may be asked to include information such as date and time the alleged violation occurred, identify of persons involved, make/model/license plate number of a vehicle involved or identity of a pet involved.
- Anonymous reports are not accepted; however, your identity will not be disclosed unless the matter becomes involved in a lawsuit, at which time the court may require that all information be disclosed. Few violation matters result in a lawsuit! Your identity may be important to provide additional information at a later date or to seek a status report of changes as a result of the resolution process.
Question: I was charged a late fee because my assessment payment was received after the due date. How do I get management to remove this fee?
Answer: Each association has an adopted collection policy that establishes a procedure for the collection of assessment monies due to the association. The policy ensures that all owners are treated equally and fairly in respect to their obligation to the association.
Most associations establish a "due date" for assessments, whether paid monthly, quarterly, semi-annually, or annually. They may also establish a grace period that defines the "delinquency date". Any payments received after the delinquency date are assessed a late fee to offset the costs the association incurs in handling this account for collection of the monies due. The management company is NOT authorized to remove this fee; this is an authority given to the Board of Directors.
Therefore, any Owner having a late fee that would like consideration for removal MUST write a letter to the Board of Directors asking for consideration based on extenuating circumstances that should be defined in their letter. The letter should be sent to the Manager and will be addressed by the Board at the next meeting. The decision of the Board will be communicated back to the Owner following the meeting.
Question: What are the CC&R'S?
Answer: The Covenants, Conditions and Restrictions (CC&R's) are the governing legal documents that set up the guidelines for the operation of the planned community as a non-profit corporation. The CC&R's were recorded by the County recorder's office of the County in which the property is located and are included in the title to your property. Failure to abide by the CC&R's may result in a fine to a homeowner by the Association.
Question: What are the Bylaws?
Answer: The Bylaws are the guidelines for the operation of the non-profit corporation. The Bylaws define the duties of the various offices of the Board of Directors, the terms of the Directors, the membership's voting rights, required meetings and notices of meetings, and the principal office of the Association, as well as other specific items that are necessary to run the Association as a business.
Question: What is the Board of Directors?
Answer: The Homeowner's Association again is a corporation and therefore a governing body that is required to oversee its business. The Board of Directors is elected by the homeowners, or as otherwise specified in the bylaws.
Question: How is the amount of my assessment determined?
Answer: The Department of Real Estate typically requires an initial budget from the developer for each community that a developer proposes to build. This budget is set upon specific guidelines for utilities, landscaping, administration, etc. Reserve funds are monies set aside for future expenses due to the life expectancy of certain items: lighting, street resurfacing, pool equipment, etc. These amounts are then divided by the number of units built in a given phase of the development. Subsequent budgets are developed by the Board of Directors and adjusted periodically to meet anticipated expenses.
Question: What happens if I don't pay my assessment?
Answer: The maintenance and management services incurred by the Association are dependent upon timely receipt of the assessments due from each homeowner. Late payments will result in a late charge as assessments are due on the first of the month. In addition, the CC&R's allows the Association to charge late charges and interest and proceed with a lien on your property, or foreclosure proceeding for nonpayment of assessments.