Community Associations
When you buy a home in a subdivision or a condo in a complex, you are buying a place in a community with its own rules and regulations.
Whether you own the land under your home (subdivision) or just the air space between the walls and ceiling (condo), these types of cooperative arrangements, also known as "community associations", share three basic concepts: membership is mandatory, certain documents bind all owners, and mandatory fees are imposed on the owners to operate and maintain the association.
CCRs: The rules, commonly known as Covenants, Conditions, and Restrictions (CCRs), govern the way each owner can use his or her property in the community. The idea behind the rules is to create relationships among the property owners, to establish standards that protect the property values and promote harmonious living, to establish fees to support the maintenance and repairs on the shared amenities.
Sometimes the community shares a pool, a golf course, or a road system. Sometimes, in a smaller project, the community shares a roof or a driveway, or landscaping. In either case, the owners in the association will share the benefit and responsibility for the shared spaces.
Association: The CCRs are generally administered by a community association (also known as a homeowners or condominium association). The purpose of the association is to manage common areas of the property, manage property interests of owners, provide services for owners, and develop a sense of community through social activities and/or amenities. Property owners are responsible for paying assessments to cover the expenses of the association.
Bylaws: Most often, the association is incorporated, and is governed by a set of bylaws which lays out the rules of operation. The bylaws direct membership meetings, voting rights of the owners, establishment of a board of directors, and the powers and duties of the board. In most associations, the board runs the association for the benefit of the owners by enforcing the governing documents, maintaining the property (repairs and construction), maintaining the association's financial stability (budgeting and assessments), purchasing adequate insurance, entering into contracts for services, establishing committees, and holding annual meetings and board meetings.
Recommendations: If you are moving into a community with an association, you should read the CCRs carefully to make sure they are compatible with the way you want to live. In most cases, the rules cover pets, parking, noise, nuisance, snow removal and road maintenance. In some cases, the rules can regulate such things as, whether you can put up a clothesline, basketball hoop or what color you paint your house. If you have questions, you should ask your realtor or consult an attorney before you purchase. Once you own the property, you've agreed to the conditions.
Also, you should review the association budget and the assessments provisions. The budget will indicate what the assessments are and what they are used for. Some budgets place an amount in reserve to cover major costs (e.g. new roof, pool repairs). However, if there is no reserve in the budget, the association may pass a special assessment to pay for a major improvement.
If you live in a planned community, get involved. Your association will only be as good as the people who run it, so get involved. Whether you have the time and energy to serve on the board, or only enough to attend an owner meeting, make your involvement count.