From The President
The Benefits of Homeowners Associations
Community associations offer one of the best opportunities for Americans to own their own homes. They are for the 21st century what land grants were in the 19th century, and what the New Deal and GI Bill were in the 20th century. Why?
Rules and Regulations Reduce Nuisance Activity and Promote Conformity
As a community, there are diverse opinions about what is attractive. While the neighbor next door, might find a purple house beautiful, others might have a different opinion. Association rules, regulations and covenants protect home values by defining what is acceptable and provide options within a defined range. When exceptions are needed or a change is desirable, an orderly process for changing the guidelines is provided.
Collective Management And Governing Documents Protect Home Values
For the most part, Americans have accepted the structure of community association living. Covenants and rules are no longer a new concept: Renters are familiar with lease agreements that contain restrictions; single-family, detached-home owners are accustomed to zoning ordinances and building codes. The difference is that in traditional, single-family housing, restrictions are administered by public governing bodies rather than by private boards. Most Americans have accepted private governance because they understand that collective management, guidelines and architectural controls protect and enhance the value of homes.
Privatizing Public Service Enhances Growth
Wherever a new community is built, local infrastructures are stretched. School populations, water management and conservation, road maintenance, utilities, traffic, everything increases leaving the local jurisdiction unable to support new community development. Yet housing is sorely needed. Therefore, local jurisdictions often require community associations to assume many responsibilities that traditionally belonged to local and state government. This privatization of public services has allowed local jurisdictions to continue developing needed housing without increasing local taxes. Instead, the developer must build the infrastructure and create an association to maintain it after it’s developed.
Community Associations Minimize Social Costs
Community associations also minimize social costs. Because they have mandatory covenants that require certain obligations from homeowners and the association, associations ensure that all who benefit pay their share and everyone is equally responsible. Community associations have sufficient enforcement authority that local government is seldom, if ever, needed to resolve assessment disputes. Many associations use alternative dispute resolution (mediation) because it’s a faster and cheaper way to solve problems than legal action, as a last resort.
Community Associations Make the Market Efficient
Many community associations—especially condominiums—have greatly reduced urban sprawl. Because of their collective management and protective covenants, they are precisely what the Housing Act of 1949 intended when it called for “decent home(s) and suitable living environments.” Community associations, as alternatives to traditional single-family homes, are shining examples of free-market efficiency. The factors that make community associations great places to live are easily ignored or misunderstood. Critics prefer to look at a few sensational issues instead of the whole picture. But for many community associations are affordable, enjoyable, efficient places to live.
As a recognized and corporate community association, Desert Ridge Community Association has a board to help our community run smoothly. The board consists of volunteers who execute a wide variety of tasks you may not be aware of; however, their work affects every single resident.
Members of our community association board have a big responsibility, and they have the legal authority to carry out their roles. Where do they get this authority?
First, most states like Arizona have statutes—such as a condominium act or homeowner association act—that legally empower elected volunteer community association boards to act on behalf of all owners collectively. Also, our association is subject to the state’s nonprofit corporation code, which confers on the board the authority to act on the corporation’s behalf.
Second, the association’s governing documents—such as the articles of incorporation, declaration; bylaws; and covenants, conditions and restrictions—which are recognized by the state as binding documents, bestow legal authority on the board and define the scope of that authority.
On the flip side, however, the same statutes and documents that give boards legal authority to levy assessments, make and enforce rules, also create an obligation for elected board members to act responsibly.
One way to think of our community association is as a service organization that provides three types of services to owners and residents.
- Community services—maintaining a community website, publishing the magazine, conducting meetings and sponsoring social activities, events and programs.
- Governance services—fulfilling legal obligations, resolving disputes, enforcing community policies, administering design review guidelines, and recruiting new volunteer leaders.
- Business services—operating and maintaining the common areas, competitively bidding maintenance work, managing association finances, investing reserve funds, developing long-range strategic plans and collecting assessments.
The board and manager make every effort to deliver these services fairly and effectively to protect and enhance the value of our homes—and the lenders’ interests in our homes. They also strive, through collective participation and mutual decision making, to preserve that intrinsic value called “quality of life” that is at the heart of the community association concept.
One of the most important things the board does is create and enforce the association rules. While some residents may not like being told what they can and can’t do, ultimately the board is looking out for the greater good. By enforcing the rules, the board is doing its best to keep property value up and conflicts down. Of course, the board wants to make sure the rules are beneficial for the majority—and hopefully all—residents. You are welcome to raise concerns about the rules at open board meetings.
Another major responsibility of the board is to collect assessments from homeowners. Collecting this money is important for the stability of the association, because the assessments pay for the common elements enjoyed by all residents. Assessments also help to replenish the reserve funds, which pay for any major repairs the association may need. The board has a fiduciary responsible for the association’s finances, and collecting assessments is how it ensures that the association remains solvent.
Finally, the board acts on behalf of the association by hiring managers, attorneys, contractors and other professionals who help better the association. Board members also help conceive and lead many of the community projects that will improve the community in the short and long-term.
While it’s a big job, board members are happy to serve the residents and make the community a great place to call home. So why not learn more about what these volunteers do by talking to your board members, attending an open board meeting or even volunteering to serve on a committee? The more people we have looking out for our community association, the stronger it will be for everyone’s betterment.
