Ask anyone their opinion about HOAs and you’ll evoke strong opinions, both positive and negative. Reasons are as varied as the people asked but are often based on how they “feel” rather than what they “know” about HOAs. It’s unfortunate that opinions of one HOA often determine views about all HOAs. It’s because of the “one bad apple” principle but can extend to the tree and beyond. It can be about a person, a rule, an action, or an attitude.
HOAs operate differently than other corporations. As long as you own a home in a HOA, you’re a Member. You don’t necessarily have to live in the community, or your property may be a rental. An owner is the “responsible party” for all things HOA-related.
In all communities, you’ll get an assortment of materials that take longer to read than closing did. In pro-active communities where the focus is making a good “first impression”, there are things like a welcome packet, orientation for new residents, or even a welcome tour. Ultimately, it’s about attitude, listening, and working with homeowners.
You’ll get copies of your governing documents along with any community rules and regulations. When you purchased your property, you signed a binding contract which establishes your agreement to follow the HOA rules. The “rules” are a set of governing documents (CC&Rs, Bylaws, and Articles of Incorporation) specifying “dos and don’ts”, assessment obligations, governance structure, and basically everything else about your HOA.
There’s also the money. The annual operating budget is for ongoing maintenance items. The Reserve budget is for Reserve expenses which represent monies allocated for repair and/or replacement of community assets.
HOAs require that you pay assessments, which pay most HOA expenses. You need to know the amount, how often they are due, method of payment options, and penalties if assessments are late or missed.
Besides the documents you are asked to read, there’s the governance body. Your HOA Board of Directors are fellow homeowners, and they oversee almost every aspect of the community. Their duties include approval of the annual budget, assessment amounts, and majority of HOA expenditures. They negotiate and approve HOA contracted vendors and service suppliers, from management or landscaping companies to pest control, and everything in between.
The Board selects/negotiates with the management company and Community Manager. They may also deal with additional onsite staff. The Manager executes Board actions and policies and may be physically present on property or may work offsite at the corporate office.
There may be a variety of committees, but most certainly an Architectural Committee, which is required by Arizona statute to deal with architectural standards and change requests. This committee must be chaired by a Board member and may have sole discretion to create, amend, or revise architectural rules created by the HOA. They must follow the CC&Rs and review all requests for exterior architectural changes, and either approve, approve with stipulations, or deny those requests.
Then there’s all the meetings. There are regular Board meetings where homeowners can attend and are afforded opportunities to comment on Board motions before a vote is taken. There’s also Executive Board meetings, which are closed and include only five items (see A.R.S. §33.1804 for more info).
There is also the annual Members’ meeting, typically held in conjunction with Board elections. Each HOA has specific criteria and procedures to follow for achieving quorum and complying with voter approval requirements on things like capital expenditures or amending governing documents. The annual meeting is one of the most important opportunities for homeowners to vote. Remember, your vote is your voice. Use it wisely.
There are typically various committee meetings. The Board creates them, but they are comprised of residents, typically serving in advisory capacities. These give the opportunity to be involved in one’s community and can be great recruiting sources for Board members.
So, that’s a typical HOA. The big unknowns are always WHO governs, HOW they govern, and WHY they make the decision they do. If the Board listens, is responsive to residents, is collaborative and strives to follow best practices, chances are your HOA experience will be a good one. If the Board, individually or collectively, only focuses on power and control, chances are the HOA experience will be negative, filled with resentment, anger, and frustration.
It’s these factors that make people want to be part of their community (fix ’em) or want nothing whatsoever to do with the HOA (forget ’em). How about you?
In conclusion, it’s been my privilege writing these HOA articles. I hope they’ve been informative and helpful. Thank you to the Maricopa Monitor for your support, to everyone in the HOA industry who provided invaluable assistance, and to all who took time to read the articles, give me feedback, or reach out with questions or concerns. Best wishes for only good things in your HOA.