What is A Homeowners’ Association (HOA)
A homeowners’ association is an organization created by a real estate developer for the purpose of developing and managing a community of homes, townhomes and/or condominium units. It is given the authority to enforce the covenants, conditions and restrictions (CC&Rs) as well as manage the common elements of the development. The NYS Office of the Attorney General requires that the sponsor file an offering plan for the homeowners’ association, and that the sponsor maintain commitments that it made in the offering plan. The Attorney General’s jurisdiction would be limited to ownership and maintenance of HOA common property.
Definition taken from the New York State Attorney General’s website
https://www.ag.ny.gov/real-estate-finance-bureau/hoa
https://www.ag.ny.gov/real-estate-finance-bureau/hoa
HOAs vary greatly in the services that they provide. The developer establishes the scope of the association initially by setting out the services and expenses in the association’s budget. The declaration provides the means by which the association can enforce the members’ obligations and the by-laws set forth the procedures for running the association.
The primary purpose of the association is to protect and preserve the value of the privately and commonly used property. In furtherance of that goal there are restrictions concerning pets; requirements as to fence height; or limitations on the number of cars allowed in the driveways. These rules often conflict with the desires of an individual owner but exist for the general good of the entire community. In addition, the association may have the responsibility to repair and maintain portions of the community, such as roads, roofs and recreation facilities.
The individual owner in a homeowners’ association has the opportunity to become involved and participate in the ongoing affairs of the community, and the responsibility to assure that the association’s actions conform to the by-laws and declaration.
Get the Facts
Check the documents for your HOA — the declaration, certificate of incorporation and by-laws. Copies of these documents are available from the seller, the seller’s lawyer or real estate broker, or you may purchase copies of these documents from the homeowners’ association. A copy of the offering statement, declarations and by-laws are in the offering plan.
These documents should include information on:
- what the HOA is responsible for
- how the declaration can be amended (including percentage required)
- how members of the board of directors are elected
- the powers and duties of the board of directors
- how annual owner meetings are called
- how special meetings are called
What should I do before buying a home in an HOA?
- Thoroughly read and examine the CC&Rs that govern the community and make sure you can live with and abide by them.
- Get a copy of the financial statements of the HOA and have a person such as a lawyer or accountant examine them to make sure there is nothing irregular.
- Find out what the monthly dues are and make sure you can afford them.
- Find out if a reserve study has been done for long-term replacement of major items such as heating, cooling, roads, buildings and roofs and how the reserve requirements are funded.
- Find out if there is any litigation pending against the HOA.
- Determine the last time and how often dues have been raised.
- Find out if there are any special assessments pending.
Leisure Glen is a Homeowners Association.
Membership Is Mandatory
When you buy a property governed by a homeowners association, you automatically become a member of the association. You do not have the choice of not joining. The purchase of your home becomes a contract with the HOA. You agree that you’ll obey all the HOA rules.
Rules for Homeowners
HOA rules are called covenants, conditions and restrictions (CC&R). CC&Rs usually apply to both you and your home. They might cover what color you can paint your home, what you can plant in your yard, how many cars you can own and park, and whether you can own a pet. There are usually noise restrictions as well. Rules differ, so carefully study ALL HOA DOCUMENTS before you buy.
There Are Penalties for Breaking the Rules
When rules are broken, many HOAs punish homeowners. Many HOAs are corporations. As such, they are legal entities that can enforce contracts with their homeowners. The usual penalty for breaking a rule is a fine. If you refuse to pay, the HOA can take other steps, such as forcing the sale of your home.
You Must Pay Dues
Homeowners in a covenant-controlled development usually pay association fees or dues, either monthly or yearly, as part of their membership. HOAs use this money for maintenance of common areas used by all the homeowners, such as walking paths, swimming pools or recreation centers.
Advantages of HOAs
HOAs balance their restrictions with advantages. If all the homeowners follow the rules, you will never have a nuisance neighbor. Your property value, based partly on neighborhood condition, will be stable. You will have access to luxurious amenities, like a pool, golf course or recreation center. You will have a voice and a vote in a defined community. A purchaser of a home in Leisure Glen will automatically assume the rights and obligations of membership in the association upon closing title to his or her home and will automatically become a member of the association (“member”). Each homeowner will be considered as one (1) member and entitled to only one (1) vote no matter how many homes a member may own. Prospective purchasers should be aware that if they resell their homes, those who purchase from them will also automatically become members of the association. The mandatory nature of membership in the association is set forth in the declarations.
In a planned community, each member (owner) owns a dwelling unit/home on a lot. A separate nonprofit corporation holds title to the common areas which are subject to recorded covenants, conditions & restrictions (CC&Rs). The planned community is governed by a board of directors elected by the owners. The owner’s deed requires membership in the corporation. There may or may not be a state enabling statute. Planned communities are referred to by a number of different names that reflect diverse architectural styles and regional nomenclature variations, such as Homeowner Association (HOA), Property Owner Association (POA), Townhome Association and Planned Unit Development (PUD). The recorded CC&Rs are determinative and not the architectural style.
Residential community associations are subject to the various state and Federal Fair Housing Laws and Executive Orders. Generally, residential community associations are not subject to the Americans with Disabilities Act unless they have amenities and commercial space open for public use.
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