What is a homeowners' association (HOA), a community association and a managed community?
Homeowners' Associations (HOA) are non profit committees that manage communities. An HOA is typically hired to oversee the maintenance of a community and enforcing their covenants, convictions, and restrictions, also referred to as CC&R, to help protect the appearance and safety of the neighborhood.
The CC&Rs are put into place to define how a property may be used. For example, a covenant may put a limit on the height of a fence or determine the allowable color schemes to be used when painting the exterior of a home. Although CC&Rs may be a pain for some home owners or renters living in an HOA, they are necessary to ensure a positive ambiance and curb appeal. There are also many benefits HOA members enjoy that they might not have been able to afford otherwise.
Part of being in an HOA includes paying assessment fees or association dues. These fees vary depending upon the square footage of the area and what kind of association it is. Because the assessments are paid by the community, HOAs are able to have well maintained landscapes, community pools, and in some cases, even community country clubs. On occasion, association dues provide for your home owners insurance premium as well. If you ask community members of an HOA, most would agree that the costs of the assessment fees are a reasonable price to pay for what you get in return.
Because HOAs must maintain multiple properties and a large area of landscape, many of them hire a property manager or property management company to oversee the operations, maintenance, and financial aspects of the community. The property manager or property management company is responsible for maintaining the community, finding tenants for the rental properties, and most of the time providing accounting services. The accounting proves to be very helpful to an HOA. When managing so many properties and allocating assessment fees into the community, accounting can be quite a daunting task to committee members. For more information on property management services please read our article, "What does a property manager do?"
