Technically, a Homeowners Association, according to Investopedia, homeowner’s association (HOA) is an organization in a subdivision, planned community, or condominium building that makes and enforces rules for the properties and its residents. Those who purchase property within an HOA’s jurisdiction automatically become members”. In the Indian context, it’s like an Apartment Owners Association that is formed and operated by volunteers of a residential complex.
Features of an HOA/AOA
AOA/HOA is a team of seven members, required to form an Apartment Owners Association.
It is an arbitrator for disputes and has the right to collect the maintenance and other dues.
The Apartment Ownership Act 1989 as well as state pertinent AOA Acts apply.
It includes a general body, associate member, and a management committee that includes a president, vice president, secretary, and treasurer.
What are the documents required for an AOA?
- Society name and address
- A signed and stamped proposal letter by the executive committee/MC/RWA addressed to the Registrar of Societies requesting registration
- Associations memorandum
- Proceedings (MOM) of the first general body meeting
- A standard fee which may vary according to districts and states
Pros of Homeowners Associations
1. Maintenance and management
Having an official body of officers in charge of running simple and complex affairs is necessary for a gated community for a good and comfortable standard of living. This includes landscaping, security, financial administration, maintenance collection, repair and restoration, and other maintenance activities. HOA/AOA or a Resident Welfare Association are also responsible for the apartment complex/housing society’s bye-laws which have to be registered through the Cooperative Societies Act or the registration rules of the city /state government.
2. Arbitration and dispute resolution
Any apartment complex needs to create an HOA/AOA/RWA sooner rather than later as it’s important to resolve conflicts, complaints, and oversights in a lawful manner. If there are problems or disputes arising between neighbors, the HOA Committee has the right to intervene and mediate to arrive at a mutually agreeable resolution.
3. Access to amenities and common spaces
Members of HOA are responsible for appointing caretakers and managers for the clubhouse, gym pool, and other facilities as well as a service staff/waste management vendor, paying common utility bills, maintenance of financial records, statements, and legal documents, builder handover documents for the society and information of the members, government departments, and manage water supply issues, appoint reliable security services or fulfill any other administrative need of the residents.
4. For security and privacy
HOA members are the point of contact for overall safety concerns that the residents have. Apart from individual security measures, an apartment complex must have responsible security guards who should be trained in fire safety protocols and basic equipment handling such as LPG/Electrical meters, etc.
5. Legal and operational needs
In matters of grievances against the builder or legal disputes arising due to construction or ownership issues, an AOA can be the reliable source to figure out lawful solutions by approaching the right authorities, National Consumer Disputes Redressal Commission (NCDRC), or any other local authority concerning with the nature of the disputes. Also, AOA is required to keep immaculate records including banking account management for the apartment and property taxes, applicable GST, etc. Coordinating with different outside service vendors like waste management, electrical boards, composting vendors, etc., is also a task that befalls the HOA.
Cons of an HOA/AOA
1. A standard fee
Every apartment owner has to pay a predetermined monthly fee to the homeowners association as it’s necessary to have finances in order to maintain and run the complex efficiently. The monthly maintenance fee depends on the sq feet rate (based on the size of the flat), flat rate (for all apartments), or hybrid rates (a combination of both charged for the type of service). The more the amenities and services under possession, the more the fees.
2. Abiding by the rules
An HOA is responsible for forming all rules and regulations regarding monthly payments, code of conduct, waste disposal, and other society-specific rules. These bye-laws are formed in accordance with the government laws (central and state), and contain Do’s and Don’ts with respect to community etiquette and regulations that need to be followed.
3. Liable to pay fines
The HOA has the right to charge penalties to the apartment owners if they default on payments, ignore rules repeatedly and create any kind of nuisance or conduct unlawful activities within the complex premises. In cases of extreme non-compliance, the HOA can even take legal action against the members.
Although listed as cons, the aforementioned rules are necessary to keep the apartment complex safe, secure, and disciplined so that community living becomes delightful.
In summary, an HOA is a necessary official body for any society, with its pros far outweighing the cons. However, the HOA members should be picked wisely and have the necessary expertise and wherewithal to operate the society.