How to Start A Homeowners Association

Homeowners Association organizations have always been a popular choice for homeowners, especially in the United States. Most homeowners prefer living within a privately governed community. One might ask, how to start an HOA? An HOA offers security to its members, regulations, maintenance, and a sense of community. Be sure to research the homeowners association laws specific to your state and/or city. Here are steps you can follow in creating an HOA in your neighborhood. Since the legal requirements for forming an HOA vary drastically from state to state, we will not be covering “forming a legal HOA entity” in this article.

Note: This guide is not to serve as legal advice, but rather for general purposes use only. Before starting an HOA in your neighborhood, it’s advisable to contact an attorney in your area who knows the applicable laws and statutes. 

 

Generate Interest in Starting a Homeowners Association

If you want to start an HOA in your community, you will need to generate interest from your neighbors. Depending on the laws in your state, you may need the majority of homeowners to agree on the idea. Laws vary from one state to the other. In some states, you may need a small number of your neighbors, while in others, you may require to get everyone in the neighborhood on board. As you engage the neighbors on forming HOA, collect the information on what they would like the HOA to do for them and what they do not want, and use that information to create an HOA. Everyone should understand that a Homeowners Association is a legal entity, and there are regulations in the market to protect ground property rights and community areas. HOAs are great for maintaining residences, subdivisions, and developer uniformity and oversight. Read more about the benefits of association management software and how the whole community can utilize it.

Determine the Type of HOA

HOA is usually a non-profit organization that is formed to help operate, manage, and maintain a neighborhood or buildings. There are two general types of HOA, voluntary and mandatory. The voluntary HOA format can be tricky and hard to operate since no-one is actually required to participate. And of course, mandatory is when the HOA and it’s binding documents become a legal obligation for everyone involved. There are pros and cons to either organization, but voluntary is the least common. Keep in mind that just because an HOA may be voluntary participation, that doesn’t mean there aren’t legal restrictions and regulations that are enforceable.

 

 

The Different Types of HOAs:

Master Association: A master association is a type of organization that manages larger residential areas, which may include a number of neighborhoods, subdivisions, or buildings.

Condominium Association:  A group or board whereby the members are elected by the collective. The board manages the servicing and maintenance of condos and community areas.

Homeowners Association: Homeowners associations are generally operated by homeowners who set their own rules and regulations for the neighborhood. Laws vary from state to state, but HOAs are formed with the interest of the collective homeowners within a defined geographical location.

Townhome Owners Association: A type of association for townhome owners in a neighborhood.

Civics Association: Similar to a standard HOA, civic associations are formed by people who are interested in taking care of a building or community. Rules are generally not enforced, and fees are optional.

One of the first decisions in deciding what type of HOA to form is to determine if you want everyone in the community to be involved or have the option to participate in the HOA. If you find members who are reluctant to starting an HOA while generating interest, you may opt for a voluntary HOA as it will be challenging to impose HOA on community members who are unwilling to participate. While choosing the type of HOA, think through what you want the HOA to do for the community.

 

 

Determine the Rules and Regulations for the HOA

Once you have the necessary number of property owners willing to participate, you can now begin drafting the rules and regulations. Research your state laws and regulations to govern your community. Determine the services you want to provide to the community. HOAs have restrictions to maintain the value and consistency of the services offered. It is recommended to seek legal assistance when writing the Declaration of Covenants, Conditions, and Restricts (aka CC&R). You want to get it right the first time around.

There are many benefits to HOA Rules and Regulations

It’s possible that when you first contemplate the rules and regulations to add to your HOA, you may be concerned about appearing too restrictive. However, although you don’t want to overdo it, having the guidelines thoroughly spelled out will help avoid issues. Below are a few key points when considering a general scope for an HOA:

• Protecting and improving home investment values
• Enforcing the community’s Covenants, Conditions, and Restrictions (CC&Rs) & Bylaws
• Preserving the appeal of a neighborhood
• Maintaining the property of the condos, common and shared areas

Every neighborhood community is different. You’ll need to check with your local laws and governing documents for details for what HOA’s specific rules are permissible in your area. However, there are some guidelines that are generally standard in most communities, including:

• Trash and recycling rules
• Lawn and holiday decoration restrictions
• External home maintenance standards
• Home occupancy limitations
• Parking guidelines
• Pet requirement
• Rental restrictions
• Noise complaint policies

Establish Operational Needs

You will want to figure out what the operational needs of your HOA will be. How will your HOA function? What are the rules governing any changes that may arise shortly? You may need a lawyer to oversight some of the procedures. You can take a community’s current financial picture into consideration, as well as its demographics and operational necessities. Once you’ve done that, it’s time to design a comprehensive HOA software solution that will help you care for your community’s functional essentials. With so many options available, you’ll need to choose an HOA website that offers the functionality that you need, while also keeping the price down.

What are the Payment Procedures?

Consider having different levels of HOA fees & dues. If you want to build a community pool, you can calculate how it will cost per person with the lowest budget possible. Then you can cost-share the cost and provide what services HOA will offer once you complete the project. More and more HOAs are making the payment procedures painless by providing an online payment portal on an HOA website.

Operate and Administer Your HOA Online

Obviously, this part is optional but we’re advocating for it because you will thank us later. Having HOA website software will make collaboration and communication that much easier during the start-up phase of your HOA. A functional homeowners association website will first and foremost give your HOA members a way to manage their community’s assets, while also streamlining many of the community’s mundane operations. It should also allow your HOA management staff to easily find and obtain the necessary information and data for each functional need. For example, how many maintenance days does each unit have? How many of those maintenance days is the home being cleaned and maintained? When is the next community meeting?

Another area of HOA management that needs to be addressed is the community’s emergency operations plan. A map operator program should include all of the basic functions necessary to keep a community operational in an emergency situation. It should provide a list of every type of emergency operation that takes place in your community, as well as a detailed log of when each event takes place and what day of the week it takes place. You should be able to quickly access this log, from anywhere, and know what’s going on at any given time. That allows for proper HOA community communication.

Now Communicate the Plan to Community

Once you have everything ready, and after having a lawyer sign-off on it, present the plan to the community. Let them know the CC&R you have written down to look at it to determine if it is okay with them. Create the budget, reveal your fee schedule, name your HOA, and share the governing documents. Now you can select the board of directors, and create a website for your HOA.

Creating an HOA in your community can be achieved once your neighbors agree to the term. So be sure to make the presentation as exciting as possible. Also, bring donuts, donuts are good.

Finally, if you are in the process of forming an HOA for your neighborhood, and like the idea of starting out with an affordable website and software, we can help. Contact us today.