Condominium Frequently Asked Questions

A Community Association is a nongovernmental association of participating members of a community such as a neighborhood, village, condominium, cooperative or group of homeowners or property owners in a delineated geographic area. Participation may be voluntary, require a specific residency, or require participation in an intentional community. Community Associations may serve as social clubs, community promotional groups, servic

In relation to an HOA, Community or other formal organization, a director is an officer charged with the conduct and management of its affairs. The directors are collectively referred to as a “Board of Directors” and are generally elected or appointed by the homeowners, or otherwise specified in the bylaws. Sometimes the board will appoint one of its members to be the chair, making this person the President (or Chairman) of the Board of Directors. The limitation and restrictions of the powers of the Board of Directors is outlined in the Association governing documents.

Association Management is a distinct field of management because of the unique environment of associations. Associations are unique in that the “owners” are members which pay dues. Members also govern their association through an elected board or other governing body, along with association committees, commissions, task forces, councils and other units. Typically, the Board of Directors selects, retains and evaluates a “chief executive officer” or an “executive director” (known as the Association Manager) who is responsible for the day-to-day management of the association.

Association Managers are responsible for many of the same tasks found in other organizational contexts including human resource management, financial management, meeting management, IT management, and project management. Other aspects of management are unique for association managers and often include membership recruitment (and retention); tax-exempt accounting and financial management; development of non-dues revenue and fundraising. Association managers must also be familiar with laws and regulations that pertain only to associations.

A property management entity contracted by a Board of Directors or community often serves in the Association Manager role and provides a variety of services including but not limited to collecting assessments, managing sub-contractor endeavors, financial advisement, statement/report preparation and analysis, general property maintenance, day-to-day problem resolution, and advisement on legal and other property related matters. Some companies manage hundreds of properties simultaneously, while others focus on a smaller number of individual properties.

A Managing Agent is terminology for a person or entity hired specifically to assist the Board of Directors in enforcing the documents and managing the assets, funds, and interests of the association.

Homeowner Associations typically require homeowners to pay a portion of the common expenses, usually per-unit or based on square footage. Known as “dues or fees”, these expenses arise from common property, which vary dramatically depending on the type of association. Some associations share common property such as private roads, services, utilities, amenities, community buildings, and pools. Many also consider exterior structures (i.e. roofs, siding, etc.) as the responsibility of the association.

These dues (or fees) are often applied towards a minimum of two funds, an operating fund and a reserve fund. The operating fund would be used to cover the operating expenses of the association where as the reserve fund would be used to pay for infrequent and/or expensive common area maintenance, repair and/or replacement costs. HOA dues/fees are generally billed in intervals by month.

The reserve fund is significant when reducing the chances of a “Special Assessment” which are sometimes additional charges imposed on homeowners and used to cover unforeseen or unplanned expenses.

Real Estate Developers are required to provide an initial budget for each community that they propose 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.

Covenants, Conditions and Restrictions (CC&R’s) are a legal obligation imposed in a deed by the seller of a home and or property upon the buyer of the real estate to do (or not to do) something. Such restrictions frequently “run with the land” and are enforceable on future buyers of the property. For examples, homeowners may be required to maintain a property in a reasonable state of repair or to preserve a sight-line for a neighboring property.

Many covenants are very simple and are meant only to protect a neighborhood from homeowners destroying trees or historic items or otherwise directly harming property values. Some can be more specific and strict, outlining everything a homeowner can/can’t do to the exterior of their home, including the number of non-familial tenants one may have, acceptable colors to re-paint the home, exactly when holiday decorations are allowed up, automobile placement or repair on property, satellite placement, etc.

Bylaws are a set of rules or guidelines regarding the operation of a non-profit corporation such as a Board. Bylaws generally set forth definitions of offices and committees involved with the Board of Directors. They can include voting rights, meetings, notices, and other areas involved with the successful operation of the Association.

The Declaration is sometimes referred to as the “master deed”, the “documents” or the “declaration of covenants, conditions, and restrictions (CC&Rs)”. It describes an owner’s responsibility to the association (which can include payment of dues/fees and special assessments) as well as the association’s various duties to the owners.

The Governing Documents are the declaration, bylaws, operating rules, articles of incorporation or any other documents which govern the normal operating procedures of an association.

Most associations have developed a set of “Rules and Regulations” as provided for in the CC&R’s and adopted by the Board of Directors. These are established to provide direction to the homeowners for common courtesies with regard to parking, vehicles, pets and pool use hours, etc. In addition, your Association may adopt “architectural guidelines” with procedures for submitting requests to make exterior changes to your home. Such changes may include patio covers, decks, landscaping, exterior color changes or extensive interior changes and additions. These rules and guidelines are set up to maintain the aesthetic value and integrity of the community on behalf of all owners and hopefully protect the market value of your investment. Deviation from these rules may result in action by the Board of Directors including (but not limited to) a fine.

A lien is a monetary claim levied against a property for unpaid mortgage, taxes, contractor work, or other charges. A lien is attached to the property, not the owner, but legally must be recorded in the property records of the county of residence. If a lien is in place, the property owner has very limited ability to do anything involving the property until the lien is satisfied or removed.

An easement is an interest or a right in real property which grants the ability to a landowner to use the land of another for a special purpose or endeavor. For example, a public utility may have an easement against an association for maintenance or repair work.

A proxy is an individual appointed to act or vote on behalf of another person by representing them at a meeting of the association.

A quorum is defined as the minimum number of owners required to hold an official meeting of the association. The number of owners required can vary greatly according to the corresponding association’s governing documents.