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History[ edit ] HOAs were first established by land developers in the United States in the midth century. Large-scale suburban residential development was encouraged by the Federal Housing Authority and the Urban Land Instituteas the construction of highways had made commuting to cities from outside areas easy.
There was an increasing social preference to control and preserve architectural quality in developments. The amount of readily available land declined near business centers.
Rising construction costs made large-scale development and savings more attractive; and federal mortgage insurance rules were changed to include cooperatives and condominiums, as well as such planned developments controlled by HOAs.
But, private contracts effectively kept them alive until the Fair Housing Act of prohibited such discrimination. According to Donald R. The rationale was that developers wanted to get around density laws.
The effect, however, was to divert investment from multi-family housing and home construction or renovation in the inner cities.
This accelerated the middle-class exodus to the suburbs and into common-interest housing. The rapid expansion of federally subsidized highways under federal programs made access to new areas easy.
In order to do this while still retaining a suburban look, they clustered homes around green open areas maintained by associations. These associations provided services that formerly had been provided by municipal agencies funded by property taxes.
Residents of such development also had to pay their local taxes.
Accordingly, local governments began promoting subdivision development as a means of improving their cash flow.
Clean Water Act of required that all new real estate developments had to detain storm water so that flow to adjoining properties was no greater than the pre-development runoff. As a result, nearly all residential developments had to construct detention or retention areas to hold excess storm water until it could be released at the pre-development flow level.
Since these detention areas serve multiple residences, they are almost always designated as "common" areas. This requirement was a reason for developers to establish a homeowner association.
Real estate developers have frequently established homeowner associations to maintain such common areas. Having established the HOA, the developers have expanded their scope, giving them authority to regulate changes to residences, landscaping and maintenance requirements, color of houses, etc.
Industry[ edit ] The Community Associations Institute CAI is a trade association of individuals and businesses that sell supplies or services to HOAs, and is dominated by lawyers and homeowner association managers.
It lobbies the legislatures of states that have HOAs in order to promote legislation beneficial to its members. It opposes laws that would harm its members. Once an owner purchases property within the subdivision, that owner becomes a mandatory member of the HOA, and must pay assessments to, and abide by the rules of, the HOA.
Once an owner sells or otherwise transfers interest in all the property owned within the HOA, the owner ceases to be a member of the HOA and loses all rights previously held. These are likely the most important documents affecting the subdivision and are usually created when the subdivision is initially formed, and as such are often recorded in the official property records of the county or other jurisdiction where the subdivision is located.
Board of directors[ edit ] The HOA will be governed by a board of directors. Initially the board is composed of developer-appointed members, in order to maintain the character of the community that the developer has for it.
As the percentage of ownership shifts from the developer toward owners, the corresponding percentage changes from developer-appointed members to homeowners elected at an annual meeting, and ultimately the board will consist solely of homeowner-elected members.
Usually the board or parts of it will be elected at an annual meeting of the homeowners, as specified in the Bylaws. Management services are typically divided into three categories: Financial services typically cover administration of bank accounts, bookkeeping, assessment collection, and the HOAs budget.
Full management typically includes the financial services plus help with board meetings keeping minutes, agendas, etc. On-site management typically includes all of the full management services plus direct assistance to homeowners with an assigned manager to the HOA. Education requirements for managers varies from state to state, with some requiring certification under all circumstances and others having a more lenient approach.
For instance, while California does not require HOA managers to be certified, it does require that managers meet certain educational requirements to claim certification. Depending on the governing documents, HOA boards may create committees, such as an "architectural control committee" this is a very common one, and frequently this committee has the ultimate authority to approve or deny a building requesta pool committee, a neighborhood watch committee, etc.Sign in to manage your Verizon account, check your email, see your rewards, and much more - all in one place!
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