Homeowners associations (HOA) are legal corporations formed by a real estate developer to market, manage, and to sell homes and lots in a residential subdivision.
They’re most commonly formed for condominiums and planned urban developments (PUDs), a category that includes suburban communities.
Homeowners associations commonly address maintenance duties and responsibility for common areas within the community. These responsibilities are typically part of what the association governs and help define how shared spaces and community upkeep are managed.
HOA Articles of Incorporation typically grant developers privileged voting rights in governing the association during its infancy, while providing the means for the developer to exit financial and legal responsibility for the organization, transferring ownership to the homeowners of the association.
This transfer typically occurs after a predetermined number of units have been sold — often two-thirds of the available lots and/or units.
Each homeowners association enforces its own governing documents in the form of restrictive covenants, by-laws, architectural guidelines, and regulations. Together, the “rules” of an HOA are meant to define the community standards for the purpose of protecting property values. All owners are required to abide by these regulations. Otherwise, they could be faced with fines.
Homeowners associations may also involve dues and assessments as part of how the association operates. These payments are generally connected to the ongoing needs of the community and are an important part of understanding HOA governance.
Restrictive covenants vary widely from homeowners association to homeowners association. Covenants may include guidelines on issues as varied as where parking is permissible; planned architectural improvements; and, landscaping.
HOAs in Seattle often enforce these common restrictive covenants, among others :
For homes governed by an HOA, membership in the homeowners association is a condition of purchase; buyers are not permitted to opt-out.
Homeowners associations make their by-laws available upon request to existing, governed homeowners and will often make by-laws available to prospective home buyers as well. Review community guidelines before buying into a building or neighborhood, and before beginning a home improvement project. It’s important to know what actions are permissible and what actions are not.
In addition, most mortgage lenders require HOA by-laws as part of the mortgage approval process.
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A homeowners association is a legal corporation created to manage and govern a residential community such as a condominium complex or planned development.
HOAs are most commonly found in condominiums and planned urban developments, including many suburban communities.
The real estate developer usually controls the HOA in its early stages through voting rights granted in the association’s governing documents.
Control typically transfers to homeowners after a predetermined portion of the homes or units has been sold, often around two-thirds of the community.
An HOA is usually governed by articles of incorporation, restrictive covenants, bylaws, architectural guidelines, and other rules and regulations.
Restrictive covenants are rules that limit or regulate certain uses of the property, such as parking, exterior changes, landscaping, and visible items on balconies or in yards.
Yes. Homeowners who do not follow the association’s governing documents may face fines or other enforcement actions permitted by the HOA rules.
No. If a home is part of an HOA-governed community, membership is generally mandatory as a condition of purchase.
Yes. Buyers should review the HOA’s bylaws and community rules before purchasing so they understand what is allowed and what restrictions apply.
Yes. Many mortgage lenders require HOA bylaws and related documents as part of the mortgage approval process.
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