HOA Terminology
Living and/or working in a community that is governed by a Homeowners Association requires becoming familiar with terminology that many people are
not otherwise familiar with.
The following are some of the most commonly used
terms that are associated with living in a common interest development that is
governed by a Homeowners Association:
“Amendment” - A written statement that expresses a change or revision to a prior document.
“Annual Report”
- A report that is distributed to members of an HOA every year.
“Articles of Incorporation”
- A document that is filed with a governing body within
a state (generally the Secretary of State) which evidences the creation of a
homeowners association. Most HOAs are created as nonprofit corporations.
“Assessment”
- An owner’s share of the amount of money that is required to pay
the common expenses of a homeowners association.
“Association” - The HOA, or entity that is responsible for the operation of the
common interest development.
“Board of Directors”
- An elected body of individuals that are responsible for the
management and administration of the Association.
“Board Meetings”
- A duly noticed gathering of an Association’s Board of
Directors for the purpose of conducting Association business.
“Bylaws”
- A written document that describes the administrative and operational
requirements of the Association including, but not limited to the calling meetings
of Members and the Board of Directors and the determination of voting
requirements and quorums.
“Common Area”
- The portion of the HOA’s property that is owned in common by
all of the Members of the Association and is not part of the Separate Interest of
the Members.
“Common Expenses” - All of the expenses of an Association that are incurred for the benefit to its Members.
“Common Interest Development” - A development that is governed by a
Homeowners Association.
“Common Surplus” - The excess of all revenue received by the Association over
the Common Expenses.
“Condominium”
- A form of common ownership where property consists of
different units that are each owned by Members of the Association along with
common elements that are owned jointly by all unit owners.
“Condominium Parcel” - The property containing all of the Condominium units
together with the Common Area.
“Conversion”
- A Condominium that has been created by converting a property
that was not originally developed as a Condominium.
“Covenants, Conditions and Restrictions (CC&Rs)” - Rules that govern the use of
real property which are recorded in public records and which obligate all owners
of that property to comply with said rules.
“Declaration”
- A document that is recorded in the office of the County Recorder
where a property is located which establishes the property as a condominium or
some other form of a common interest development.
“Exclusive Use Common Area”
- Those portions of an association’s common area
that are outside of an owner’s separate interest, but are reserved for the owner’s
exclusive use.
“Governing Documents”
- A collective term for an association’s internal
documents that govern the relationship between the owners and the association
and which provide for the legal structure and operation of the homeowners
association. They include articles of incorporation, bylaws, declaration or CC&Rs,
rules and policies.
“Leasehold”
- The interest of a tenant who occupies real property pursuant to a
lease with the owner of the property.
“Lien”
– An encumbrance on one’s property created by agreement or law in order
to secure the payment of a debt or the performance of some other obligation.
“Limited Common Elements”
- Portions of common area which are designed to
serve a single unit but which are located outside of that unit—such as shutters,
doors, windows, porches, balconies, and patios.
“Management Company”
- An organization that is retained to manage real
property for the benefit of the owners of the property.
“Manager”
- A person who directs the day-to-day operations of a homeowners
association under the supervision and control of the board of directors.
“Members”
- The owners of the units that make up the Association.
“Percentage of Ownership” - An ownership interest that is expressed as a percentage of the total.
“Proxy”
- An agent that is authorized to act for another person such as the voting
for a member in a homeowners association.
“Quorum”
- The minimum number of persons that must be present at an official
meeting in order to validly conduct business at that meeting.
“Reserves”
– Funds that are set aside by a homeowners association to pay for the
repair or replacement of different components of the association’s property.
“Separate Interest”
- The property owned exclusively by an Association Member
that is not owned in common by all of the Members.
“Special Assessment”
– An additional assessment to be imposed on homeowners
when there are insufficient reserves to cover unanticipated expenses that must
be paid by the association.
“Undivided Interest”
– The interest held by two or more parties that are co-
owners of real property and who have equal rights as to the control and use of
the property.
“Unit”
- A single interest that is part of something larger such as a condominium
unit that is part of a structure containing multiple units.