Property Owners’ Associations and Homeowners Associations help build better neighbors.
Purchasing a home is a major milestone in anyone’s life, whether it is a first home, a vacation home, or a home to enjoy your golden years. No matter what stage of life you are in, buying a home in a neighborhood you will enjoy is important. One way to help make sure you are choosing a neighborhood that will fit your lifestyle is to understand what is expected by the homeowners in the neighborhood of your choice. By understanding Property Owners’ Associations (POAs) and Home Owners’ Associations (HOAs), you will be able to make an informed choice about where to live.
A POA is a non-profit corporation registered with the State. It is managed by a Board of Directors. The purpose of a POA is to maintain any and all common areas and to oversee the community in accordance with the provisions of its legal documents, including Covenants, Conditions, and Restrictions, Bylaws, and Articles of Incorporation.To be a member of a POA, you purchase a lot and then build on it (unless you buy a re-sale). You can own a lot only and still be a member of a POA. Usually, in an HOA, there is one builder/developer. The buyer selects a lot and then a floor plan from the builder in that particular development.
An Architectural Review Board (ARB) is a committee under the Board of Directors. The ARB reviews plans for new construction, additions, and any exterior modifications/changes home owners wish to make. POAs and HOAs both have Architectural Review Boards, but HOAs usually don’t have one until the development is (nearly) completed, since there is usually only one builder involved.
Besides sizing up the many amenities POAs offer, such as golf, tennis, beach access, boating, fitness facilities, etc., you should also familiarize yourself with your potential neighborhood’s Covenants, Conditions, and Restrictions (CC&Rs). The CC&Rs are the legal documents which set up the guidelines for the operation of the planned community as a non-profit corporation. The CC&Rs have been recorded in the County’s land records and go with the title to your property. If you fail to abide by the CC&Rs in your community, you may find yourself getting a phone call or a letter from your POA/HOA requesting compliance with a given situation. Under extreme circumstances, non-compliance may garner a fine or sanction by your association. Bylaws are guidelines for the operation of the non-profit corporation. The bylaws basically define the duties of the offices of the board of directors, the terms of the directors, the membership’s voting rights, notices of meetings, and other items necessary to run the POA as a business.
Most area associations have developed rules and regulations as provided for in the CC&Rs and adopted by the board of directors. Rules are established to provide direction to the homeowners for common courtesies such as parking, pets and use of amenities. Also, architectural guidelines with procedures for submitting requests to make architectural changes to your home will be set forth in the rules and regulations. These rules and guidelines exists so that residents can have “peaceful enjoyment” of their property.
An assessment is the periodic amount due from each owner to cover the operating expenses in their community. These expenses include, among others, maintaining the common areas and the neighborhood’s amenities. For communities with security, this cost is also included in the assessment. POAs rely on the timely payment of assessments to fund the community’s many operations. Therefore, if an owner is late paying their assessment, they may be subject to a late fee and possibly interest.
Experts advise potential buyers to carefully research the POA of a particular community before they buy. Each POA is different and living in a POA is not for everyone. If they do not feel comfortable abiding by the rules of that community’s POA, then perhaps the potential buyer should look for a neighborhood which will better meet their lifestyle and needs. This research can help eliminate potential conflicts.
Your real estate agent can give you the specifics about the neighborhood of your choice. Most area neighborhoods have the POA information online, or you can contact the POA directly with any questions and concerns.