By Deborah Goonan Independent American Communities Blog
From time to time, you will hear elected officials refer to Homeowners’ Associations (HOAs) – using the term generically to include condominium associations, cooperatives, and property owners’ associations – as “mini-governments.” But are HOAs really comparable to U.S. local governments, as guided by the principles of our Constitutional Republic? Let’s unravel the truth.
Your HOA is a corporation like no other.
The very first thing a real estate buyer or property owner should know is that HOAs, with very few exceptions, are set up as non-profit or not-for-profit corporations. Even though HOAs often perform maintenance, security, and code enforcement functions of a local government, they are not municipalities. Therefore HOAs are not governed as cities or towns.
Instead, HOAs are governed by a set of documents that includes the Articles of Incorporation, By-Laws, and Covenants, Conditions, & Restrictions often referred to as Restrictive Covenants (1) or CC&Rs. (In a condominium, these restrictions are called Declaration of Condominium.) Most legal experts view CC&Rs as a contract between individual owners and the Association, even though individual buyers have no power to negotiate the terms of this contract prior to purchase.
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