HOA Terms Everyone Should Know
If you’ve recently joined your Aurora community’s HOA board or have recently moved into a neighborhood with an HOA, you may be unfamiliar with some crucial terms that every community association member should know. From governing documents to your fiduciary duties, you’ll get the most from your time in a community association by familiarizing yourself with the most important and most common HOA terminology.
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Fiduciary Duty
HOA board members have fiduciary duties that they must fairly and consistently carry out. A fiduciary duty is defined as one party acting for another, specifically when entrusted with the care of property or funds. Essentially, the law dictates that HOA board members must act in the best interest of their community members. Regardless of personal relationships, financial circumstances, or any other factors, board members must always fairly exercise the duty of care, the duty of reasonable inquiry, and the duty of good faith.
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Quorum
A quorum is the minimum number of board members necessary to legally conduct your HOA’s business and make decisions. If you do not have a quorum, you cannot take votes, propose changes, or conduct any other type of official HOA business. Most community associations define a quorum as a simple majority. However, you should check your HOA’s bylaws for their official definition.
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Governing Documents
Every HOA has a set of governing documents that outline exactly what board members can and can’t do in terms of governing their neighborhood community. Although homeowners may sometimes feel as if they’re the only ones restricted with a set of rules, the HOA board similarly has sets of rules and regulations that they must follow when governing their community. Virtually every community association has the following governing documents: Articles of Incorporation, Bylaws, CC&Rs, Rules & Regulations, and Plats of Survey & Easement Agreements.
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CC&Rs
Of the governing documents listed above, new planned neighborhood homeowners often have the most questions regarding the CC&Rs. CC&Rs stands for the Declaration of Covenants, Conditions & Restrictions. It contains the rules of your neighborhood, which makes it an important document to be familiar with. The CC&Rs will outline the limitations of what you can do with your property, such as lawn maintenance requirements or parking rules. The main goal of the CC&Rs is to protect and preserve property values in your community, and it’s an integral part of any successful homeowners’ association.
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Assessments
Assessments are mandatory dues or fees that all community members must pay. There are several types of assessments that you may have to pay: Regular Assessments, Maintenance Assessments, Extraordinary Assessments, or Special Assessments. Your Maintenance Assessment is also known as your HOA fee. These fees pay for the maintenance of everything that falls outside of your property line, also known as the common area. An HOA has more items to upkeep than you may think: street lights, entry gates, landscaping, irrigation, recreational centers and facilities, main office utilities, and community events. Your HOA fees, or assessments, go toward paying for these and allowing you to continue to live in a well-kept, desirable neighborhood with high property values.
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Community Association Management Company
A management company is a third party that is hired by an HOA’s board to execute the decisions made by the board. From collecting assessments to scouting reliable vendors, a community association management company helps build a stronger sense of community by enabling board members to spend more time in their community and making decisions that will most benefit it. It’s important to note that the management company does not make any decisions on behalf of the association. It merely acts at the direction of the board to execute duties and enforce rules where needed.
The Management Trust is one such community association management company that has helped communities throughout Aurora become stronger and operate more smoothly. Just like an HOA board is composed of its fellow residents, The Management Trust is entirely owned by its employees. This makes us uniquely positioned to understand the diverse needs of HOA board members and offer exceptional, personable customer service with every interaction. From vendor billings to record-keeping services, The Management Trust can do it all and leave your HOA with more time to focus on building community relationships. For more information about our services or to request a proposal, give us a call at (253) 472-0825 today.
