So … you are purchasing a home or other piece of residential real estate in Florida, and you have been told that the property you are purchasing is subject to a homeowners’ or condominium owners’ association. What does that mean for you and your soon-to-be home or investment property?
In Florida, it is becoming more and more prevalent for single family homes to be located in neighborhoods that are part of homeowners’ associations (HOAs). For condominiums, it is mandatory in the state of Florida that all condominiums must establish a condominium association (COA), and all condo owners shall be subject to that association.
So, what exactly are HOAs and COAs? Why do they exist? Do they benefit the property and its owner, or are they just another level of costly and painful regulation? These are questions that many property owners in Florida ask themselves regularly.
HOAs and COAs are corporate organizations, established under specific laws of the state of Florida, that are wholly owned by the owners of the individual homes or units that make up the community. They exist to manage the overall affairs of the community, maintain common property like community centers, gates, amenities, and other parts of the community that are not owned by the individual owners. In general, HOAs and COAs are set up to provide significant benefits to the individual home or condo owners and enhance the values of their respective properties. Despite the bad reputation these associations sometimes face, numerous studies have shown that an overwhelming majority of owners believe that they do enhance property values and serve a valid purpose in increasing the health, welfare, and aesthetic appeal of their communities.
But then you might ask, why do they have such a bad reputation? Well, to begin with, in order to manage the community and perform essential functions with respect to common property, sometimes associations have to perform difficult tasks like collecting money from owners, making rules and regulations that limit owners’ use and enjoyment of their properties, and taking administrative or punitive actions against owners who fail to pay or fail to comply.
Also, much like corporations, by law, both HOAs and COAs are run by a board of directors, elected annually by the individual unit owners. These directors then appoint officers to handle daily decision-making and administrative tasks for the organization. Most medium or large (and some small) HOAs or COAs hire a professional management company to prepare and present annual budgets, negotiate contracts as required to perform community functions, and run the day-to-day operations of the community. Directors and officers usually serve for one year and have tremendous power in making decisions that affect the community in general and individual owners. Additionally, both HOAs and COAs are heavily regulated by statute and regulation. These rules are often complex and subject to interpretation when they are applied to real-life situations.
In short, HOAs and COAs perform important functions that enhance the living experience and increase the property values for their member owners. The way they are set up and run, especially when combined with the intricate laws and regulations they must follow, often causes consternation and disputes between individual owners or groups of owners and the association itself. Additionally, their need to collect assessments and make rules and regulations for the community further complicates matters. Disputes also often arise between the association and the various contractors it must hire to manage the association’s affairs, upkeep the grounds, amenities, and common areas, or perform financial or other services.
All this complexity, collection of fees and assessment, spending common funds, rulemaking and regulation often causes conflicts that, unfortunately, require the assistance of legal professionals who concentrate their practice in the area of HOA and COA law. If you are an owner of a house or condo that is part of an HOA or COA, it would be wise to read the association documents, attend meetings of the board and owners’ meetings, and remain up to date on important issues faced by your association.
If you have a question involving HOA or COA-related matters, please contact David Charitat at dcharitat@uslegalteam.com for further assistance.
Real estate and business litigation attorney David Charitat focuses a large percentage of his practice on HOA and COA legal issues. He has over 30 years of legal, real estate, and organization management skills related to these issues with an eye to preventing problems and resolving them efficiently and favorably when they do arise.
