Cousins, but Nothing More

Too many times people think condominium associations and homeowners associations (HOAs) are the same. Those who think this would be wrong. They are cousins in the world of land use, but nothing closer than that. Understanding some of the differences between them can avoid a lot of problems.

In New Hampshire, we have a Condominium Act. It sets up statutory procedures for such matters as a lien process for delinquencies, as detailing what has to be in the Declaration and Bylaws, such as requiring an Annual Meeting, setting up procedures for Notices, and more.

Many states do have Homeowners Acts, that would give guidance and requirements for all, but New Hampshire does not. Thus, HOAs are strictly creatures of what is in the Declaration of Covenants and Bylaws. Phrased another way, if something is not addressed in the Declaration or Bylaws of a condominium association, it's likely it is covered in the Condominium Act. However, if something is not addressed in the Declaration of Covenants or the Bylaws of an HOA, there is no Act to look to for guidance, a situation which can leave the Association in a quandary.

On a practical level there are differences as well. Condo associations and HOAs are not interchangeable. Almost, but not always, HOAs govern detached single-family homes. Condos, though they can govern single family lots and homes, typically govern multi-unit buildings and/or semi-attached townhouses.

But HOAs will also have some administrative expenses, such as creating and maintaining a website, insurance for its Board of Directors and officers, so there is definitely some overlap between the two forms of ownership.

But what usually is the biggest difference between HOAs and condominium associations is the maintenance obligations between them. A condominium association, usually through its Board of Directors, is responsible for maintaining the common areas, which can be vast, encompassing everything outside the boundaries of the unit.

While an HOA is also responsible for maintaining the common area, the common area is likely much, much smaller. Usually in an HOA the Owner has a lot of land, not just a Unit. Frequently, theres's not much common area for which the Association is reasonable. It can be, for instance, just roads, an entrance sign and some lawn area around the entrance.

And while the ability of an owner to do whatever she or he wishes on their lot and to their home can be attractive, the lack of control by the Association can also create problems. And that's where the fun can begin.

For instance, what if someone is delinquent in paying their fees? The Condo Act has a collection process that includes the filing of a Memorandum of Lien and requiring the Owner to pay all collection costs incurred by the Association. But without similar language in the HOA documents, including adopting the Condominium Act's lien language, it can get expensive to collect and all costs would be borne by the Association, not the Owner, effectively punishing

What happens if someone leaves trash out on their common area, or their front (or back) yard looks little better than the town dump? It may be their Lot, but such a state of disrepair will negatively affect the value of surrounding units.

What if a neighbor becomes really loud, parks multiple cars on the lot, driveway and road? What happens if someone lets their dog roam the neighborhood? What if they put up a fence without permission or let it fall into a state of disrepair? Does the Board of Directors have any control over the members of the Association if their actions start creating problems in the Association? Is there a fine schedule?

It is likely none of these matters are addressed in the Declaration of Covenants of the HOA. For all of these reasons and more, it would be wise to talk among the owners and see what oversight the owners want the Master Association to have.