A Detailed Guide to HOA Documents | What Documents Should You Have?
Some of the documents you should review as a homeowner includes the association's governing documents, its official records as well as the reserve study.
Note that an association's documents are legally binding. Therefore, we recommend that you familiarize yourself with all HOA documents. It will shield you from unnecessary scuffles during and after your buying or selling process.
Here is a guide to what you should review.
1. HOA Governing Documents
An HOA will always have governing documents.
i. The Federal and State Laws — This section regulates what the association can or cannot do, thus protecting the interests of homeowners.
ii. CC&Rs (Declaration of Covenants, Conditions & Restrictions) — It contains member's responsibilities and obligations. It also states the responsibilities of HOA to its members. Lastly, it governs rules made by the board, which should neither conflict with the federal law nor the CC&Rs.
iii. Articles Of Incorporation — Homeowners' associations are formed similarly to business corporations. Therefore, they must file articles of incorporation which bear information such as an HOA location, name, and purpose.
iv. Bylaws — Generally speaking, bylaws establish the rights and responsibilities of the association. Through a board of directors, an HOA declares its right to protect the community. They include rules and procedures about term limits, voting processes, and the election of directors.
v. Rules And Regulations — The section talks about the interpretation and implementation of CC&R
2. HOA's Official Records
Also known as official documents, a member is allowed to copy and review an HOA's official records. Here is a list of associated documents:
i. HOA's community management records.
ii. Board and members' minutes and meeting notices.
iii. The developer's documents such as maps, land surveys, permits, and plans.
iv. Membership roster indicating members' telephone numbers, mailing addresses
v. Documents about membership voting, the election of directors and officers, directors, and membership approvals such as notices, minutes, ballots, and proxies.
vi. Copies of judgments, liens, or encumbrances recorded against or on behalf of the HOA.
vii. Past-due assessment notices.
viii. Recorded instruments related to properties owned by the HOA.
ix. Architectural guidelines.
x. Age restrictions since some associations only allow a specific age group within the community.
3. The Association's Financial Records for The Past Few Years
This will essentially give you an overview of the amount of fees you will be expected to contribute and how often you're required to do so. This records mainly entail;
- Records of expenditures and all receipts.
- Association's members updated account ledgers indicating the member's name, amount, and the due date of annual assessments, payments made, and the outstanding balance.
- The association's financial reports, audits, and reviews.
- Contract records of work performed, including bids.
- Invoices of purchases.
4. The Association's Reserve Fund
This simply refers to money that is kept aside by the HOA for expenses that may occur later. It determines an association's ability to plan its short and long-term activities such as building swimming pools and extensive renovations like getting new roofs for the community.
5. The Master Insurance Policy
The master insurance policy covers common areas and buildings against destruction. Reviewing it will help you understand the extent of protection against damage. It is essential to confirm all the details regarding the master policy to be certain of the extent of cover and determine whether you may need extra insurance.
You will need to access HOA documents for you to review them. Documents such as articles of association are available for the public. Another option would be writing to the homeowners association and expressing your interest. Neighbors are a reliable resource. They can also assist.
Lastly, when selling your property, be sure to disclose the association's documents.