What do you know about forming an HOA?

TarHeels&Rebels

The developer of our neighborhood, after years of saying he wanted to keep the HOA under his own control, has just decided out of the blue that he wants the HOA to stand up on its own. 

He's asked me to meet with him Tuesday for an initial planning session since we've worked together some in the past.  He's not a big developer, just a local businessman who dabbles in real estate, so I don't know that he'd be able to lead the conversation.

What do I need to consider?  The neighborhood has maybe 15 houses right now, though lots are cleared for maybe about 30 more but the economy has brought everything to a standstill.

Sunshine+Wine

We were in a similar situation about a year ago. Our developer decided to relinquish the HOA to the residents. We (the active residents) spent the most time discussing the community pool, walking trails and play areas that are part of our subdivision. We put more specific rules and guidelines in places for those areas and assigned one household to watching over the pool, one to general neighborhood upkeep, one to a neighborhood watch program etc. Our neighboor has actually grown substantially in the past year, so it has been beneficial to us to have a resident-operated HOA. Does he already have guidlines in place for neighbor ordinances (like basketball goals, fences etc)? I assume he would, so you'll want to spend some time adding to his list and perhaps deciding who will enforce what etc.

MrsPez07

In addition to PP notes, you may also need to understand the finanacials, especially if HOA dues are being collected and there are common areas, such as a pool or playground that require maintenance. Those undeveloped lots may also still have some responsibility for fees and/or general upkeep of their "property".

Make sure that there are design standards/guidelines or Covenents-Codes and Restrictions (CCR's) in place to control and/or enforce things (like aesthetics, BB hoops, etc) outside of the City or County code (health and welfare stuff like weeds, dogs, appropriate use), if you want them. I am guessing that there were some standards in place at the time of initial development, but it is up to the existing residents as to whether you want future development to follow those or any others or not (some people prefer no design or development restrictions in their neighborhood).

You could also consider hiring a management company as a third party if the residents aren't really feeling like being that involved. A management company would help you track the expenses for the common areas (parks, pools, etc.) as well as HOA dues. They can also be responsible for writing the CCR violations, etc. on behalf of the HOA, doing design review for any new homes, homeowner exterior improvements, etc. Otherwise, that falls on the HOA's shoulders.

 Good luck!

R&B3.26.05

I highly recommend getting a management company involved.  I served on our condo community's board of directors back in 2005-2006.  We were a new construction neighborhood and once construction was mostly completed, the builders turned over "control" of our neighborhood to us.  We had a board of directors (President, Vice President, Secretary, Treasurer, and Committee Chairs) that worked in conjunction with the management company to negotiate landscaping contracts, repairs with the city, etc.  So worth it IMO.