Starting a homeowners association (HOA) is an excellent way to keep property values high in the neighborhood by establishing formal standards for the community. Owners of homes in a subdivision, condominium complex or apartment building can guarantee a certain degree of order among the residents through an agreed upon set of covenants, codes and restrictions. Issues including lawn care, gardens, children’s outdoor play sets, swimming pools, garbage collection, parking lot maintenance, snow removal, fences and noise levels can be addressed by the formation of a homeowners association.
How do I Start a Non-Profit Homeowners Association?
The homeowners association is a non-profit entity that is regulated by state and local laws. The first step in forming an HOA is to find a small group of people who will represent the interests of the community. They should decide on a schedule of meeting times and places, develop goals for the community, and elect leaders.
Next, hire a real estate lawyer to assist the neighborhood in forming the homeowners association. The attorney can ensure that all local and state laws are obeyed during the development of by-laws, covenants, codes, and restrictions. Paperwork will need to be filed with the municipality; including a unique name for the HOA, articles of incorporation, and application for a tax ID number. These important steps will establish the homeowners association as a non-profit business within the state. As the HOA continues to serve its residents, the real estate lawyer should be consulted regularly, to be sure that the code is being carried out in a legal manner.
A bank account will need to be opened for the non-profit homeowners association. Dues are collected from community members and will be used on behalf of the HOA. The group can decide the amount of membership fees and the schedule for collection such as whether it will be yearly, quarterly or monthly. It should also be decided what type of account will best serve the needs of the group; the elected treasurer will manage the funds for the homeowners association.
The first meeting will be when the homeowners association becomes an official non-profit organization. The by-laws will be formally adopted at this first meeting.
After the common goals have been initially set for the neighborhood, an ongoing public meeting schedule should be developed for the neighborhood. These meetings should be advertised for the residents and will be the forum for managing the HOA. Committees can be formed to address and oversee specific concerns or areas of interest for the common good, such as maintenance, seasonal events, fundraising and community affairs. Ongoing elections may be held at regular, pre-determined intervals to ensure that all residents will have a voice and be pleased with the management.
A non-profit homeowners association is a great way to help ensure that your community will be a safe and desirable place to live for years to come.
If you are forming a homeowners association, you may need the services of a property management company. Contact Son-Rise Property Management.