Condo Association Management FAQs
What is an assessment?
An assessment, sometimes referred to as an "association fee", is
the dollar amount paid each month by the condominium owner to cover
a proportional share of the common expenses for the property-such
as hallways, roofs, gas, sewer, and exterior structures. Expenses
are usually per-unit or based on square footage.
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Are dues different than assessments?
Assessments, whether billed monthly, quarterly, or a determined
interval, are the same as Homeowners Association dues. The terms
can be used interchangeably.
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What are the different types of associations?
A Homeowners Association (HOA) is a legal entity
created by a real estate developer for the purpose of developing,
managing, and selling a development of homes. It allows the
developer to exit financial and legal responsibility of the
community, typically by transferring ownership of the association
to the homeowners after selling a predetermined number of lots.
Associations provide services, regulate activities, enforces the
conditions, covenants, and restrictions (CCR's) of the development,
levy assessments, manage common amenities, and may impose fines.
All members of the HOA must pay assessments and abide by the
regulations and restrictions of the association.
A Community Association is a general name for any
organization of property owners to oversee common interests. It is
a non-governmental association of participating members of a
community in a defined geographic area.
A Neighborhood Association is a voluntary membership
organization that deals with social, political, zoning, and other
issues that typically affect the members' properties, but usually
does not maintain commonly owned properties. A neighborhood
association may advocate for, or organize, activities within a
neighborhood and can provide recommendations to the City Council on
topics like land use and capital improvements.
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What is the difference between a Homeowners Association and a
Neighborhood Association?
Homeowners Associations and Neighborhood Associations are two
separate entities. HOA membership is mandatory through rules tied
to the ownership of property. Neighborhood association membership
is voluntary. Also, HOA's are primarily concerned with the internal
business of the property and are generally established at the time
the property is built and sold, whereas neighborhood associations
typically exist is established neighborhoods, and are united by a
common geographic area.
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What is Association Management?
Association Management is a field of management that is unique to
the environment of associations. Property owners are dues-paying
members that comprise the association, and the association is
managed by a governing body, such as an elected board, committee,
or task force. Although management within the association
environment shares many aspects of other organizational contexts,
certain tasks such as development of non-dues revenue and
fundraising and membership recruitment are unique to association
management.
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What is an Association Management Company and what do they
do?
An association management company is a property management entity
contracted by the association, in which the association delegates
major responsibilities of the property to the management company.
These responsibilities can include general maintenance, advisement
on property-related matters, and assessment collection. Association
management companies may manage several properties simultaneously,
whereas others focus on individual properties.
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Does my community have an Association Management Company, and if
so, how do I contact them?
If your community is not self-managed, the Association
Management's contact information can be found online, generally
listed on the company website, or in the phone book.
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What is a managing agent?
A managing agent is a third-party organization or person that
manages a property. A managing agent can be used to maintain
property, collect assessments, manage building staff, etc.
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What is a proxy?
A proxy is an individual appointed to act or vote on behalf of
another owner by representing them at an association meeting. Proxy
can also refer to a written document granting that power.
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What is a quorum?
A quorum is a gathering of a minimal number of owners required to
hold an official meeting of the association. The number required is
outlined in the association's governing documents.
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What is a recuse?
A recuse is an act that involves temporary removal of an
association member or board member, or the act of disallowing his
or her participation in a particular vote, typically because of a
conflict of interest.
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What is a board of directors?
Directors, in relation to an HOA, are officers charged with the
conduct and management of its affairs, collectively referred to as
a board. The board can be appointed or elected, with one member
appointed to be the chairperson. Contact information for your
community's Board of Directors can be found on the Board's website.
Contact information, meeting times, and minutes should be
available.
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What is CAI?
The Community Associations Institute is a national organization
that provides education, tools, and resources to people who govern
and manage homeowners associations, condominiums, and other planned
communities. The CAI was initially formed to deal with problems
involving association management, but has since turned its focus to
advocating and lobbying state legislatures for policies that
support responsible and effective management.
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What are CC&Rs?
The term CC&R refers to 'Covenants, Conditions, and
Restrictions,' the governing documents that dictate how the
Homeowners Association operates and what rules the owners-and their
tenants and guests-must obey. Many covenants are simple and meant
to protect property value. Some are more specific-acceptable
exterior color, satellite placement, etc.
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What Are bylaws?
Bylaws are a set of rules adopted by an organization to govern
its own meetings or affairs. Bylaws can include voting rights,
meetings, and other areas involved with the operation of the
association.
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What are governing documents?
Governing documents are any documents, including bylaws, which
govern the standard operating procedures of the association.
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What is a lien?
A lien is a legal claim to property used to secure or obtain a
debt, making it collateral against money or services owed to
another person or entity. A lien can also refer to the security
interest created by a mortgage.
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What is the declaration?
The declaration, sometimes referred to as the master deed, is a
document that must be registered by the original property owner
prior to the conveyance of the first unit sold. The declaration
describes the CC&R's and the owner's responsibilities to the
association. The person or group of persons who either signs the
original declaration governing the development and association, or
acquires the original developer's rights, is referred to as the
'Declarant.'
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What is an estoppel letter?
An estoppel letter is a document used to facilitate the transfer
of real property, and determines payoff amounts, assessments, and
dues to be paid at the time of the closing. The document is sent to
an HOA requesting payoff of a mortgage, and incorporates that
amount into the Settlement Statement for the buyer and seller of
the real estate.
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What is an easement?
An easement is a right in real property which grants the ability
to a landowner to use the land of another for a special purpose. An
association may have an easement for repair purposes.
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What is a notice of noncompliance?
A notice of non-compliance is similar to a lien, in that it is
sometimes authorized under the CC&R's, and notifies prospective
buyers the property is in violation of the documents.
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What is a common area?
A common area is any property intended for shared use by members
of the association, i.e. Hallways, laundry rooms.
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What are ordinances?
An ordinance is an individual or set of laws adopted by a
governing authority, specifically, a municipal regulation.
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