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Anatomy of a Homeowner Association

You’ve just moved into your first house — or maybe another house — in a quaint neighborhood in a decent part of town near good schools, parks and other trappings of upwardly-mobile couples or young families. Or you’re single or otherwise prefer not keeping up with a yard and stay in close proximity with city life by living in a townhouse or condo. You think you recall seeing a line item on paperwork somewhere that mentioned an “HoA fee” or “Association dues” as a yearly payment and figured, “I’m not completely sure what that’s about, but it doesn’t seem huge, and nobody’s made a big deal about it, so I’ll figure it out later.”

Eventually, you receive a piece of paper in the mail or notice a pin-up on the community cork board that mentions something about a meeting in 2 weeks at the neighborhood clubhouse, a local restaurant, or in Phase II’s cul-du-sac. What’s that about? Does this have something to do with the yearly (or monthly) fee I’m supposed to be paying? And what is this meeting supposed to be deciding?

Why do Associations exist?

The main point of an Association existing is to make sure that “common areas” are maintained and that minor deviances to the Covenant (a legally-binding document containing a bunch of “shall” and “shall nots” describing acceptable community behaviors) are enforced.

Almost all single-family-dwelling neighborhoods have strips or blocks of land that you may have noticed on your Plat (the piece of paper that describes your specific property boundaries) are not actually owned by any single homeowner. These pieces of property are, in fact, owned by the community developer, another third party, or the city/county and an Association is usually tasked with upkeeping these areas. If the Association is incorporated, it may own this property as well as clubhouses, swimming pools, tennis courts, or other areas. Many condo/townhouse communities have annexed land that the Association owns in direct proximity to your dwelling. Also, services are sometimes maintained by the Association such as water/sewer, trash-collecting, and the like.

In larger communities and especially with condos or townhouses, the Association sometimes delegates the administrative duties of keeping up with day-to-day responsibilities of things like bills and insurance to a third-party company. If this is the case with your Association, your yearly or monthly dues would be made payable to this company. In smaller Associations, monies are paid in the name of the Association whether the Association is incorporated or not. You would typically tender a check to the Treasurer; the By-Laws would stipulate how the Officers deal with any issues arising from money-handling.

How do Associations operate?

In any community with an unincorporated Association, the Covenant — as the only legally-binding document available — would rule in legal matters. If the Association is incorporated, precedence is usually placed thusly (and stipulated within the By-Laws): Articles of Incorporation supersedes By-Laws; Corporate Declaration supersedes By-Laws; the By-Laws enforce the Covenant.

Most Associations — whether incorporated or not — will operate within the confines of a set of By-Laws. This is a document that describes characteristics of membership, leadership and general expectations for the rules of engagement at a meeting. It will also stipulate penalties for Covenant infractions and is amendable. Remember that peer pressure is a huge motivator that many Associations use to keep their members in line. Only those parts of an Association that are backed by legally-binding documentation (e.g.: the Covenant specifically calls for an Association to exist) can be enforceable by law, regardless if the Association is incorporated or not.

Leadership is typically a big deal with Associations. The most common “offices” are President, Vice President, Secretary and Treasurer. Ultimately, the buck stops with the President. The Vice President exists to fill the presidential office in case of vacancy and/or fulfill other assigned tasks. The Secretary usually takes notes — “minutes” — of all meetings. The Treasurer is the money person. ” Roberts Rules of Order” (the Rules) almost always govern the proceedings/debate. The “Chair” — the person who calls the meeting to order (starts it) — is usually the President, but doesn’t have to be.

Any meeting will have an agenda, or flow of discussion, with which the Chair proceeds forward. If there are on-going or “tabled” issues, this is referred to as “unfinished business” and is considered before “new business”. For the Association budget, best practice dictates that the Chair delegates to the Treasurer to make or hand out a report when called for as per the agenda or By-Laws.

How do I introduce new business?

This process is always governed by the By-Laws. Most Associations allow for members to “make a motion” for new business; some Associations require you to submit your “agenda item” to the Secretary or other officer at some point prior to the meeting to be considered. Being familiar with the nuances of the Association, the By-Laws as well as the Rules will help you in determining the best strategy in dealing with your interests.

What if I have an issue with an issue?

There are a number of ways to proceed with dissent. If someone brings up something during a meeting with which you disagree, Robert’s Rules provides various mechanisms than can be used to alter, hinder, or even attempt to stop that issue from moving forward. Depending on the Association, try talking with an Officer before or after the meeting. This requires a good dose of diplomacy as most people don’t understand that “this is only business; nothing personal.” So, try to “survey the landscape” and bring facts to the table, as opposed to trying to alienate.

Never hesitate to request documentation — meeting minutes, budget reports, etc. — from the Association. The By-Laws or officers will always know how to handle such requests; after all, you are a member and therefore are entitled to reasonable access to all Association paperwork from time to time.

It’s important to note that a “runaway Association” may try to “run over” its own By-Laws. It is perfectly acceptable — and some see it as a moral obligation — to point these infractions out to the officers and/or Association. When done correctly, helping keep the organization within the scope of its own rules is ultimately beneficial to all involved.

I can do better than them!

Of course you can — now the only thing to do is nominate yourself or be nominated as an officer! Just remember — the world does not automagically align with the forces of right should you become elected. You may have personal interests that you’d like to see executed but you now have to deal with everyone else’s interests as well. It can be even more daunting in a larger Association, especially one with lots of responsibilities.

Be aware that parliamentary procedure stipulates that the Chair/Officers of the meeting preside at the consent of the members. That is, the Chair can and sometimes will do things according to their own interests as long as the membership allows.

Hopefully this post will bring some insight into general Association concepts. While Associations can be frustrating because of the relationships involved, they form an important part of community culture by providing the conduit that gives members a piece of responsibility in keeping up with their neighborhood.

Poster note: While I am not a lawyer and cannot offer official individual advice, I am currently involved in my community Association and have drafted a set of By-Laws for it. Part of my family also helped to develop a sizeable retirement-type community and was involved in its incorporation.

About the author: My name is Phil and I’m a guest poster here at Bargaineering. My family and I live in the great State of Georgia. I’m a technologist by trade and hobby, and I also enjoy dabbling with finance, politics, theology, and anything else I happen to find interesting when not enjoying the family. It’s my hope that the views I express will be practical and beneficial to you. If you feel the need to opine in my specific direction, I can be reached at phil dot the dot blogger at gmail dot com.