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A homeowners association (sometimes HOA) is an organization comprised of all owners of units in a housing development, which may or may not be part of a gated community.
United States In the United States, the vast majority of homeowners associations are incorporated and are therefore governed by a board, which is in essence a private government. Other associations are informal and not forced upon residents; these are often called neighborhood associations. Some of the developments that real estate developers build are common-interest developments, a category that includes planned-unit developments of single-family homes, condominiums, and cooperative apartments. Before the first unit is sold in one of these developments, the developer records restrictive covenants on all of the properties. These "run with the land", meaning that all successive buyers are bound by the same covenants as the original purchaser (though some jurisdictions require renewal after 20 or more years). These covenants, among other agreements, form the basis for the homeowners association. Homeowners associations collect fees, fines, and other assessments from homeowners, maintain the common areas of the development, and enforce the association's governing documents. These may include detailed rules regarding construction and maintenance of individual homes. The common areas maintained and governed may include landscaping, common buildings (e.g., clubhouses) and recreational facilities such as swimming pools), common walls in attached housing developments, and infrastructure such as streets, mailboxes, sidewalks, and parking lots. Often, a homeowners association collects special assessments from all its members in addition to set fees. Assessments can be made to cover legal expenses for a judgement against the homeowners association, to repair damage from a natural disaster, or to make improvements. In some U.S. states, California or Texas for instance, a homeowners association can foreclose a member's house without any judicial procedure in order to collect a fine. Other states, like Florida, require a judicial hearing. Homeowners associations have also begun to assume a more active role in litigating construction defect claims in recent years. In states such as Colorado and California and others that have adopted the Uniform Common Interest Ownership Act, homeowners associations may have standing to represent their members in an action against the community's builder for negligence or other causes of action. Some of the responsibilities that the covenants delegate to homeowners association boards would otherwise be performed by local governments or require private legal action under civil law. Nevertheless, only owners -- who need not be residents -- are allowed to vote in elections to choose the board. Residents of the community who are not owners (e.g., renters) do not typically receive a vote. Some of the first homeowners associations in the United States were the private places, or private streets, of St. Louis, Missouri. The earliest, Benton Place, opened in 1867. In the next five decades, over one hundred of these streets were laid out in St. Louis. Many more appeared in nearby suburbs, such as University City, Missouri. Under the covenants of these private places, the residents not only owned the street but the utility easements and sewer and water mains as well. After years of decline, the places underwent a revival in the 1960s. Most are in the prosperous Central West End, but a few homeowners associations were all-black, such as nearby Lewis Place, and were prosperous enclaves surrounding by blighted neighborhoods. Studies by urban planners, such as Oscar Newman, found that these private places were less likely to suffer from crime and other aspects of urban decay than the nearby public streets. In recent decades, homeowners associations have become increasingly common in the United States, exercising control over 22.1 million American homes in 2005, according to the Community Associations Institute. Rest of the world United Kingdom In many countries, including the United Kingdom, homeowners associations are rare. However they seem to be on the increase in the UK with gated communities and closes. Having had the misfortune to have lived in one in West Sussex, I can guarantee that self-styled CEOs of residents associations provide little benefit yet draw a large income from fees and fines that have no transparency and have no elected board or mandate from the residents. This is an alarming trend with property prices being driven down by subsequent inability to sell houses. I am aware that residents find it difficult to question the CEOs of their residents association, fearing reprisals. Therefore I ask that people expand this page to include typical residents association covenants (for freehold properties) and details of how they can be taken to court where they fall foul of the law and areas that we need to recognise where they adhere to the law. The aim is to build a community with good links to property lawyers in order to set up representation for those homeowners caught out by sharp practice. Given that this area appears to be quite new to the UK, our aims are also to avoid the US model and provide a fair and democratic system should there be a rise in the 'residents association'. Advantages and benefits An association can be helpful in places where local government is somewhat lacking in its level of regulation or services. Associations can require the protection of trees and other native vegetation, such as requiring that landscaping and construction be done in a manner that is not harmful to the environment, including both the ecology and the neighbors. This however is mainly limited to natural areas, such as those surrounding resort communities, as newer suburban developments typically are dense and therefore destroy most existing natural features. Where neighborhood roads are private, an association can compel residents who share the road to pay equally for maintenance, particularly where crusher run must be occasionally put down to keep up a gravel road. This also goes for running wells to provide drinking water. Again, this is most applicable to semi-rural areas, as municipalities (or counties and townships) typically provide these services in urban and suburban areas. Homeowners associations can also mount legal challenges to other developments in the area that are out of place or character, and threaten the enjoyment of the community. This however may cause conflict within the association if some residents disagree. The goal of a homeowners association is the preservation of property value. It does this by enforcing its governing covenants. It makes sure that all properties are attractive and consistent with each other. As an example, this prevents one home from being painted pink while all the other homes are painted brown. Without covenant enforcement, one home left unkempt, can lower the property value of the entire neighborhood. This is the reason that the homeowners associations get a large amount of support from local governments. The homeowners association will help keep property value up, therefore, increasing property taxes. Also, the homeowners association essentially reduces the amount of government resources required to enforce local government restrictions. Also, an active homeowners association will have numerous subcommittess, such as social committees, pool committees and neighborhood watch committess. Controversies and criticisms There are many criticisms of homeowners associations, most notably that they can wield the power of a government without having to submit to the checks and balances and other responsibilities of one. While in some sense similar to zoning-related laws, covenants often include other things that a government would never be allowed to regulate, such as the color of window blinds. Associations, particularly those led by people who enjoy power and control, may enforce covenants in a pedantic manner, which can exacerbate rules that are already extremely numerous and detailed. Some have been known to threaten residents for having brown lawns, even when local government has enacted a total outdoor water-use ban. This caveat means that homeowners would unavoidably be fined either by the association or the government. Associations may, on the other hand, be lax in enforcing particular covenants, which can cause a totally different set of problems when owners who value exact rule adherence switch roles with association leaders. Developers often retain control of the association until most or all of the homes are sold, meaning that it is essentially a dictatorship with no recourse. If the developer has failed to fix problems in one of its homes, the homeowner may be prohibited from speaking out, violating his or her freedom of speech. Some feel that these associations are more for the benefit of the developer than the residents. Homeowners may be victimized without due process or appeal. They can be evicted from their own home, which can then be sold or auctioned against their will for a fraction of its market value. This can leave the owner with a large mortgage but no house to live in. Besides financial ruin, this can also destroy a person's credit score for years. This can happen if a person becomes unemployed or even terminally ill and is late by as little as a month. However, this seldom happens because selling a home at below market value hurts the entire neighborhood. This is the complete opposite of what the association is trying accomplish. Some associations and their lawyers have initiated foreclosures for amounts due of less than 100 U.S. dollars, then adding hundreds or even thousands of dollars in late and legal fees, making it impossible for the homeowner to get out from under. However, a homeowner typically will not be evicted unless he/she is in serious covenant violation or behind on homeowners association dues. The homeowner is in theory given a fair amount of time to rectify the problem before the homeowners association takes legal action. Legal action is typically a lengthly and expensive process and will usually be avoided unless absolutely necessary. Foreclosing on a home does not guarantee the association will receive any proceeds from the sale. The level of enforcement (and sometimes aggression) tends to vary widely. Notes | ||||||||
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