Q: What is a “management company” and what do you do?
A: A management company is contracted by the Board of Directors to provide such services as: Collection of assessments, supervision of subcontractors, obtaining estimates for subcontracted services and providing financial statements/information and income and expense reports. Also, a management company is used for problem solving, communications with homeowners and the Board of Directors and to serve in an advisor capacity. The management company reports directly to the Board and/or a designated member of the Board. All decisions are made by a majority vote of the Board of Directors.
Q: What and who is the Board of Directors?
A: The Association is most often a non-profit corporation by law, and therefore a governing body is needed to oversee the business of the Corporation. The Board of Directors is the elected governing body of the Corporation or a non-incorporated association. These Directors (the number is determined by your Articles of Incorporation and your Bylaws), create the rules and regulations for enforcement within the community, oversee that funds are being properly budgeted and have the duty to enhance, maintain, and protect the property values of the Association. The Board of Directors usually organizes several committees to aid in the decision making. The Board of Directors is generally comprised of homeowners that are residents within your community.
Q: How is the amount of my assessments determined and what does it pay for?
A: Your assessment covers the operation, maintenance and repairs for which the association is obligated in accordance with the Covenants, Conditions & Restrictions (CC&Rs). Items such as insurance, taxes, water, electricity, refuse collection, landscaping, pest control, and security services (if needed) are just a few items covered by the monthly assessments.
A portion of your monthly assessment should go towards funding the reserve account, which are for future repair or replacement of major components. Roof repair (in condo associations), pool/spa resurfacing, fencing, painting and mechanical replacement are just a few of the long term components that are funded via the reserve account. The reserves vary for each community association.
Q: What happens if I do not pay my assessments?
A: The Declaration states that not paying the monthly assessment causes the owner to be subject to a lien notice, as well as interest and possible late charges. If there is no response from the owner a lien is then filed which could eventually result in foreclosure of the unit. The governing documents of your Association provides further information as it applies to your homeowners association.
Q: What are the Governing Documents?
A: Governing Documents give the Board of Directors authority and direction to govern the association. They consist of: Articles of Incorporation- Provide the legal basis for operating within Aizona Corporation Codes
By-Laws- Outline how the association shall be governed and deal with the association as a corporation, i.e., elections, terms of office and duties of officers
CC&R’s- Conditions, Covenants & Restrictions that deal with the physical entities that comprise the association, i.e., use restrictions, easements, and annexation, and assessment obligations
Rules & Regulations- Rules and Regulations adopted by the Board of Directors within the guidelines of the CC&Rs.
State Statutes- Arizona Corporation and Civil Codes are legislated statutes that take precedence over all other legal documents, unless stated otherwise in the statute.
Budgets- Annual Budget prepared. Your budget consists of anticipated operating expenses for the year as well as an outline of reserve allocations. Operating expenses include utilities, and maintenance of your association's common areas. Your Reserve Fund is a type of savings account that covers (future) major expenditures and replacements (i.e., roofs, painting, pump/motor replacement, paving etc.).
Q: What are the most common violations experienced in community associations?
A: Some of the most common violations are:
- Failure to be current in Association dues and/or assessments.
- Disturbing the peace.
- Failure to maintain attractive landscape (weeding, fertilizing, trimming, pets soiling lawn).
- Making exterior improvement WITHOUT prior written approval of the Architectural Committee and/or in violation of governing documents (antennas, fencing, trees, etc.).
- Parking (not utilizing garage or designated space for parking, abuse of guest parking spaces, RV/ Boat parking).
- Violations involving pets (i.e., clean-up, leashed, noise, waste)
- Driveway oil stains.
- Improper storage of trash & recycle cans.