Homeowners' Association

Characteristics

Developer-created homeowners’ associations have a distinct set of characteristics, including common property ownership, a set of fully enforceable governing documents, and corporate private government that enables them to perform traditional local government functions.

The system of common property ownership in a homeowners’ association-run development is structured so that each owner has title to a lot, but the homeowners’ association is the owner of the “common areas” of the project. This can include a wide variety of facilities. Typically, the association would at least own any private streets in the development. Going beyond that, the association might also own parking lots; private water and sewer systems; utilitarian water features, such as drainage areas and retention ponds; and recreational facilities such as parks, golf courses, and lakes.

All homeowners’ associations employ a set of governing documents that typically include articles of incorporation for the association itself, a declaration of restrictive covenants, corporate bylaws that detail how the association will conduct its business affairs, and often special sets of rules governing parking, pools, pets, architectural modifications, and other matters of routine administration. The most important document is the declaration of restrictive covenants, a detailed document often running into the hundreds of pages that is often referred to informally as the “constitution” of the development. The declaration creates the system of property ownership, defines the duties and powers of the members, association, and board of directors, and includes many limitations [Page 291]on how the owners can use their own property. For example, home-based business may be banned, owners may be held accountable for maintaining their yards to certain standards, particular color schemes for houses may be prescribed, and activities such as outdoor parties and recreation on individual lots may be restricted. Taken as a whole, these documents give the association the power to dictate a particular style of life in a neighborhood, and in most cases, that lifestyle would have been envisioned by the developer and incorporated into the marketing literature in order to attract particular demographic groups who are in search of such a way of life. Homeowners’ association-run developments can be used in this way to facilitate marketing projects to very particular slices of the public, such as horse fanciers, boaters, retirees, families with young children, and those who desire a high level of physical security.

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