Residential Estate Industry Journal 4 - Page 46

KINGSWOOD GOLF ESTATE THE NUTS & BOLTS OF AN HOA SO NOW YOU ARE PART OF A HOMEOWNERS’ ASSOCIATION What is an Homeowners’ Association and why do they exist? Meeting. The board holds regular meetings to enforce One of the main purposes of the HOA is to enforce budget, authorise expenditures, collect levies, solve a set of promises that bind all owners. The promises are usually contained in a document called a Memorandum of Incorporation (MOI) or Constitution, and include a set of policies, procedures, rules and regulations. Many HOAs include common property, such as parks and roads, or what is known as common areas. Individual property owners are required to pay levies (usually monthly) to enable the HOA to operate the association and maintain that common property. Common property insurance, security, waste problems and oversee maintenance of the common property. The board acts in much the same way as a corporate board of directors, and many HOAs also utilise committees to help administer the association. For example, architectural control committees are commonly used to maintain architectural consistency in the community. What kind of legal power do such associations have to enforce their rules? management, office administration, staff costs and The main source of legal authority allowing an HOA common rates and taxes also come out of the levy. to enforce its rules comes from the recorded MOI and Who serves on Homeowners’ Associations? PAGE 44 the standard rules and regulations, to establish a is bound by the Companies Act. 2008 Because the documents are recorded with the registrar, property HOAs are governed by a board of volunteer owners, owners become legally bound by the valid provisions known as trustees or directors, elected by the remaining in these documents when they purchase their property. owners at a properly constituted Annual General HOA rules may also provide additional legal authority