A homeowners’ association (HOA) is a non-profit organization that maintains and enhances the quality of life in the development while protecting property values. An HOA can be beneficial for both homeowners and developers alike, but it is important to understand what setting up an HOA entails before starting one.
The main benefit of an HOA is that it provides a centralized system for managing common areas, such as landscaping, lighting, sidewalks, driveways, parking lots, and recreational amenities. This ensures that all residents are held accountable for maintaining these areas in accordance with the rules set forth by the association. Most HOAs have rules that regulate noise levels and other issues related to living in close proximity with others. This helps create a more pleasant atmosphere for everyone involved.
HOAs also benefit developers by providing them with revenue from monthly dues paid by homeowners. These dues are typically used to pay for common area maintenance as well as administrative costs associated with running the association. In addition to providing a steady stream of income for developers, HOAs can also make it easier for them to sell homes since they provide an added layer of security with respect to neighborhood upkeep standards.
Are There Downsides?
While there are many advantages, there are also some potential drawbacks worth considering. For example, HOAs require significant effort on behalf of both homeowners and developers in order to be successful. This includes regular meetings between board members and residents and careful record-keeping of finances.
HOAs may not be suitable for every type of development due to cost or space constraints. If this is the case, then other alternatives should be explored instead.
How to Create an HOA?
The steps to creating an HOA typically include:
- Establish ownership: All property owners must agree on and sign off on the formation of the association. This is done via a deed or other written agreement between the owners.
- Draft bylaws: The bylaws are a set of rules, regulations, and standards that govern members of the association. These rules should be tailored to the specific needs and goals of your community and must be approved by all members before being finalized.
- Create funding mechanisms: HOAs need funding in order to run effectively, so all members must agree on how money will be collected from homeowners. When drafting these mechanisms, consider how much money each homeowner should pay in comparison to the size of their property and what services will be included with those payments.
- Appoint leaders and board members: A board should be elected from among homeowners in order to manage day-to-day operations, organize events, and enforce rules if necessary. Each board member should have an understanding of their duties as well as their responsibilities toward other members within the HOA.
- Register your organization: Lastly, once all steps have been completed, you will need to register your organization with local authorities so that it can operate legally and maintain its status as an official entity within your area or state laws. This will also make sure that everyone involved is aware of their rights when it comes to disputes or conflicts within the HOA that require legal action or enforcement measures, such as fines or other penalties for noncompliance.
Ocean City HOA Lawyers at Oliveri & Larsen Can Help You Set Up Your HOA
There are many legal challenges and complexities surrounding the creation of an HOA. Weighing the pros and cons can seem overwhelming. To help you navigate these challenges, speak with our Ocean City HOA lawyers at Oliveri & Larsen. Contact us online or call us at 410-295-3000 to schedule a consultation. Located in Annapolis, Maryland, we serve clients in Ocean City, Anne Arundel County, Baltimore County, Baltimore City, Calvert County, Harford County, Howard County, Queen Anne’s County, St. Mary’s County, Worcester County, Kent County, and the upper and lower Eastern Shores of Maryland.