Home Owners Association or Property Owner Association (POA) Is a private association often formed by a real estate developer for marketing, managing and selling homes in a subdivision or development. Once a certain amount of homes have sold the developer passes control to the homeowners. Any person who wants to move into this subdivision will need to become a member and obey the governing documents which typically include articles of incorporation, CC&Rs (convents, conditions and restrictions) and by-laws, which limit owner’s choices. So no purple home with pink dots unless the HOA approves it. Most HOAs are incorporated, and are subject to state statues that govern non profits.
HOA’s typically hire a management company that does the administration portion and there is a broad which is typically home owners in that specific subdivision. Most HOAs have anual dues that are due Jan 31st of every year. Some newer subdivisions now have what they call a foundation fee, or capitalization fee and this fee is charged to the buyer at the item of purchase from the builder and sometimes it will be changed every time the house sells until that provision exists. Some have it to where both the buyer and seller pay, sometimes only the buyer pays. Most closings I had last year (2019) had 1. Capitalization fee or foundation fee. 2. Transfer fee. and 3. HOA yearly dues prorated to the day of closing. After you close on the property you will be responsible for payment of the yearly dues. The HOAs can also charge you a fine that typically comes after they have sent you a notice of a violation which gave you time to remedy the problem, if not resolved within that time frame a violation will be issued.
Anyone looking to buy in a neighborhood with an HOA should read all the documents before they agree to purchase. I strongly encourage you to do so even if they are boring to read.
Make sure to pay your dues by January 31st to avoid any interest on late payment charges.
If you have any questions feel free to reach out to me.