When Can a Subdivision Form a Homeowners Association?

Homeowners associations, popular with local governments for the benefits and tax revenue that they provide while minimizing local expenditures, have advantages and disadvantages to the members. An association can be mandatory or voluntary, and the objectives of each type may be very different. A subdivision can lay the foundation for the strongest type of homeowners association before it begins selling property.

Restrictive Covenants

If the plan is being written for the subdivision, and the property is still in the stages of development, the developer can write restrictive covenants in the deeds of the properties prior to their sale. Covenants can cover many aspects of the properties, such as what type of homes can be built and what type of improvements can be made. These covenants can give a homeowner's association broad powers to enforce the rules and even to create its own rules governing the homeowners. A mandatory homeowners association can only be imposed on the homeowners before they purchase the property through the property deed and the covenants in the deed.

Voluntary Association

A group of homeowners are free to form a homeowner's association with voluntary membership at any time. This would allow the association to collect dues from homeowners, but only those that choose to join and pay. A voluntary association has no right to enforce its rules or take possession of property in order to collect its fees.

Objectives

A voluntary homeowner's association can work for the betterment of its community in many ways. It can create common areas that residents can enjoy and also work for the goodwill of the community, forming close bonds between the residents. Charity events are also a common objective of a voluntary association, as well as working together to help a member who has fallen on difficult times. In addition, neighborhood watch and crime prevention programs sometimes are fostered through volunteer homeowner associations.

Disadvantages

While many people appreciate the strict management that mandatory homeowner's associations provide, others resent being told what to do. Some associations take a stand on what types of vehicles can be parked at your home and may also have a say if you want to repaint your home a different color. Rules are set by the board of the association, which is elected by the members. Even a good association is only one election away from becoming a meddling group with issues.

Photo Credits

  • Photos.com/Photos.com/Getty Images

About the Author

Craig Woodman began writing professionally in 2007. Woodman's articles have been published in "Professional Distributor" magazine and in various online publications. He has written extensively on automotive issues, business, personal finance and recreational vehicles. Woodman is pursuing a Bachelor of Science in finance through online education.

Zacks Investment Research

is an A+ Rated BBB

Accredited Business.