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What Is The Purpose Of a HOA

Monday, September 28, 2015   /   by Jason Huerkamp

What Is The Purpose Of a HOA

Home Owners Associations - What is Their Purpose

The Home Owners Association (HOA) is made up of all the registered owners in a particular real estate complex. All registered owners must become members of the HOA. Rights would terminate on the sale of the property and pass on to the new registered owner.
 
A HOA is regulated by state law. Each homeowner would pay an annual levy to their HOA as a shared cost of maintaining the subdivision that they have right and enjoyment. The HOA is a non profit association. A board would be nominated and elected by the homeowner to manage the affairs of the Association. The members of the board would consist of homeowners. The HOA elected members have a fiduciary obligation to the homeowners.

 

What does the HOA do?

The Home Owners Association is elected to take care of the affairs of the Real Estate Subdivision to which the members belong. The Association primary purpose would be to collect the levies and manage the financial affairs of the HOA. The HOA may employ a management company to direct its activities.
 
These levies are used to 
  • Pay the property taxes on the common areas or the subdivision
  • Pay the insurance on the common areas, buildings and implements
  • Personal liability insurance for the subdivision
  • Maintain the common areas of the subdivision 
  • Manage maintenance and repairs to the buildings and facilities that the homeowners enjoy
  • Pay staff employed by the HOA for purposes of maintenance, accounting, management etc
  • Correspondence costs and mailing
  • Other items specific to the HOA
 
Furthermore their job is to
 
  • Enforce rules and regulations set about by the HOA declaration, governing rules and conduct rules, articles and bylaws
  • Enforce and amend Covenants, Conditions and Restrictions (CC&R's)
  • Correspond with the homeowners regarding the business affairs of the association
  • Create subcommittees (if so desired) for various items including architectural guidelines, gardening committees, social calendar etc
  • Other tasks to be decided upon
It would be a good idea prior to purchasing in a subdivision that has a HOA to ask for a copy of the latest financial statements, meeting minutes and the rules and regulations governing the scheme. 
 
If you need more information on a HOA and how it is managed, it would be a good idea to make an appointment to see an attorney and discuss this with them in more detail.

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Jason Huerkamp
14300 Nicollet Court # 208
Burnsville, MN 55306
612-314-6330

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