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HOA’s more common, but not to be taken lightly
By Shelia Watson
Contributing Writer
The market has spoken. Community living is more popular than ever and is such the norm that finding quality housing free of restrictions is increasingly difficult today.
According to the Community Association Institute, a national nonprofit group that provides resources to homeowners associations, more than one out of six people in America lives in a community regulated by some type of association, whether homeowners, community, condominium or cooperative owners.
HOAs have experienced prolific growth in the past few decades. The CAI reports that in 1965 there were only 500 such associations in the country; today there are approximately 500 in the tri-county alone. Nationally, there are currently more than 280,000 HOAs, with 57 million people residing in developments governed by them. Approximately 60% of all new homes built in major metropolitan areas are within associations.
Such tremendous growth is driven by several factors. One is attributed to baby boomers leaving the homes in which they raised children to move to low-maintenance developments. Another factor is the cyclical weakness in residential rental markets, which leads to the conversion of apartment buildings to condominiums or cooperative ownerships. Yet another is the competitive advantage of constructing new subdivisions with common recreational amenities and services, which require an association to manage them.
Three features define a HOA. The first is shared ownership of common land and access to facilities such as swimming pools and tennis courts. The second is automatic membership in the HOA upon purchase of the home, along with agreement to abide by a set of covenants, conditions and restrictions. The third is a regular fee, often monthly, used for upkeep of the common areas and amenities.
Potential buyers often must qualify to live in a community run by a HOA, and membership is not voluntary.
Often one management company handles several HOAs, and in some cases, the HOAs are in close proximity to each other.
“It’s a very common practice to have one company manage several associations,” said Kati Segar, executive director of the South Carolina chapter of the Community Association Institute. “It makes sense to hire your own staff, to have an executive director and a manager and have staff under them who are direct employees.”
It’s even more common for third-party companies to manage the larger properties, Segar said.
“The difficulty of managing multiple properties depends on the size of the properties,” she said. “Portfolio managers can usually manage two to 15 properties. What makes the difference are the specific amenities, the number of units and the exact job the manager does.Management of multiple HOAs is not as taxing as it may sound, Segar said.
“Each of the properties has its own articles of incorporation,” she said. “And each has its (covenants, conditions and restrictions). It would be quite manageable to keep particulars of two associations separate.”
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