Article: After you have a majority of property owners in your neighborhood willing to participate in an HOA, you should determine what services the HOA will provide to its members. You may have already compiled a list of desired services during your informational sessions. When deciding which services you want to offer you can consider the following: High speed internet. Satellite TV. Garbage pick up. Snow removal. Landscaping. As a way to maintain property values and create a consistent and pleasing appearance of the area, HOAs often place restrictions on what can be done on the outside of owners' properties. For example, an HOA may restrict owners from painting their house certain colors, such as hot pink. Some potential restrictions could include the following: Requirements to mow the lawn every week in the fall and spring and every other week in the summer. Limits on what color owners can paint the exterior of their home. Requirements as to where visitors can park. Required maintenance for backyards. Limitations on decorations. In addition to landscaping or other services meant to beautify the neighborhood, some HOAs build structures for the benefits of its members. This can be a costly undertaking but can provide long-term benefits and increase property values. These structures may be more or less desirable depending on whether HOA members have access to these types of amenities in the community already. Some examples of structures that HOAs can build and maintain include: Neighborhood swimming pools. Clubhouse. Playground. Picnic areas. After deciding which services and amenities that the HOA wants to provide, you should create a budget. Those who are helping to set up the HOA must determine the necessary expenses and costs of operating the HOA, as well as some reserve funds to guard against any unforeseen costs. Once a yearly budget is determined, you can then divide that amount by the number of homeowners participating in the HOA and then divide the total by 12 in order to calculate the monthly dues amount for each participant. Once you have calculated the monthly amount, you should hold a meeting to discuss the budget plan. Some members may think the amount is too high and you can decide what services to drop in order to reduce the overall monthly dues. The goal of the budget is to determine the amount of money that it will take to keep the property in good condition and have enough money in reserve to pay for unforeseen costs, such as repairs. Once the pledged HOA members agree to the monthly fee amount, you should determine a timetable that sets forth when fees are due, how they should be paid, and the consequences for late payments. While the HOA is not yet a formal legal entity at this stage, it is important that everyone knows and accepts their responsibilities before going through the process of forming a business. You should also elect someone who is responsible for collecting dues, preparing the budget, and handling the accounting matters for the HOA. This person will become the HOA's treasurer. When deciding to form an HOA and even after the HOA is up and running, it is important to involve as many people as possible in sharing the burden of running the HOA. By establishing committees to conduct the business of the HOA, you ensure that multiple people are getting a say in how the HOA is run. Committees may be divided into 2 major categories: Internal affairs committees include fund raising, publicity, bylaws and social events. Neighborhood affairs committees include housing conditions, traffic safety, law enforcement/neighborhood relations, neighborhood maintenance, economic development and community services.
What is a summary of what this article is about?
Decide what services to provide to members. Consider what restrictions to include. Determine whether the association will build any new structures. Establish a budget. Set forth a fees and collection schedule. Set up committees, if needed.