A homeowners association is a legal entity that takes care of and represents the rights of land of homeowners within a specific community. The objective of a homeowners association is to keep and, possibly, increase property values within the area. The association accomplishes its goals by caring for community land and enforcing constraints on land within the area.

Services

One of the first decisions the association should make is exactly what kinds of solutions, if any, the association will provide to its members. Many institutions provide high speed Internet, satellite, sewer, water, garbage, snow removal, landscaping, and general maintenance of their front lawn and even the back yard at times.

Governing Board

The association will need to be managed generally by a governing board and by a manager or administrative assistant on a day-to-day basis. The association should ascertain the amount of members will function on the board, how long that their conditions of support will be and how they’ll be voted in.

Community Restrictions

The association also needs to consider what type of restrictions to put upon the properties within the area. Limits may relate to structural alterations to units, external appearance and alteration of units, required maintenance of front and back yards, requirements regarding parking and visitors, and any other reasonable restrictions that the association finds appropriate. Under state law these constraints need to maintain a proper legal document, frequently called a declaration of covenants, rules and constraints.

Community Property

The association also needs to decide what property the association will own and how the association will maintain that land to the community’s benefit. Community association property often includes a clubhouse, swimming pool, exercise facility, park or other open area, picnic areas, and any other facilities that normally enrich and benefit the neighborhood.

Assessment

To finance its activities, the association should adopt a schedule of assessments. Assessments are fees that the association charges to members. The assessments fund the association actions. It is necessary that the annual assessment equal or slightly exceed the anticipated expenses for the association. The board may also need to decide who will handle the administrative accounting tasks of getting assessment payments, keeping the association’s financial books and preparing the institution’s budget.

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