How HOA Boards of Directors Decide Which Services They Provide Their Residents

Homeowner associations (HOA) are becoming more common in Arizona, with a majority of new developments managed by an HOA. HOAs can be divided into two primary types: condominiums, which are where owners have proportional ownership of the common areas, and planned communities, where the HOA actually owns the common areas. Distinguishing between the two is important because different Arizona laws will apply to each. Ensuring your HOA is following all the applicable laws is one of the ways using a Scottsdale HOA property management services company can be beneficial.

How HOAs are Created

HOAs are usually formed by the developer when constructing the new community. Someone who wants to purchase property in the community is obligated to join the HOA. The steps to form an HOA can vary based on the location, but the general process is to:

  • Form a business structure for the HOA
  • Create your CC&Rs, which are the covenants, conditions, and restrictions
  • Include a procedure of how CC&Rs are to be modified in the future
  • Spell out the rules and restrictions in clear language so homeowners and renters can understand
  • Create your governing documents, like bylaws and articles of incorporation
  • Elect a board of directors and officers

Deciding on Finances

One major function of an HOA is to collect dues, as the association needs money in order to function. Some funds are earmarked towards administrative costs like accounting costs and legal expenses, but most of the money will go toward maintaining the common areas. A certain portion of the money will be set aside in a reserve fund which is like a savings account for the association. But how are fees determined? A new HOA will perform a funding analysis and create a budget to decide how much needs to be collected in dues.

Enforcing Rules and Regulations

Rules and regulations are typically decided on when the HOA is initially formed. State law sets forth what HOAs can legally have control over and enforce, otherwise, there is the risk a homeowner association will try to exert too much control over a community.

Using an HOA Property Management Services Company

The use of a Scottsdale HOA property management services company can be helpful, especially with a new board of directors. They can streamline the organization and find out what works and doesn’t work within a particular community. They can assist with accounting and ensure there is a reserve fund in place, suggest vendors that have a good reputation and fair price, and help determine when a special assessment is needed.

Seeking Legal Guidance

HOAs often have attorneys on retainer or a knowledgeable law firm they can call with questions. If an HOA is just forming in an already completed development, the board of directors may need legal guidance on what they can legally do in regard to rules and regulations.

Hiring a Scottsdale HOA Property Management Services Company

If you are a member of a Scottsdale HOA that needs assistance, contact our knowledgeable team at City Property Management Company. Call our Scottsdale office at 602-437-4777 to schedule an appointment. Let us help answer all your questions and help streamline your community’s HOA.

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