Homeowners’ associations (HOAs) play a crucial role in maintaining community standards and property values, but HOA terms and terminology can sometimes be confusing. Whether you’re a homeowner trying to understand your dues or a board member navigating financial and legal responsibilities, knowing commonly used acronyms, terms, and phrases can help you stay informed and engaged.
Here’s a breakdown of key HOA terminology every resident should know.
Assessments (Dues or Fees)
The regular payments homeowners make to the HOA to cover operating expenses, maintenance, and community services. The frequency will be different depending on the association such as, monthly, quarterly, semi-annually or annually, for example.
Articles of Incorporation
Legal documents that officially establish an association as a nonprofit corporation with the State of Arizona.
CC&Rs (Covenants, Conditions & Restrictions)
The governing documents that outline the rules and restrictions for the community, including property use, architectural guidelines, and homeowner responsibilities.
Bylaws
The rules that govern how the HOA operates, including board elections, meeting procedures, and decision-making processes.
Reserve Fund
A savings account set aside for major repairs and long-term capital improvements, such as road resurfacing or pool renovations, irrigation, roofing, etc.
Special Assessment
A fee charged to homeowners when expenses arise, such as emergency repairs, not covered by the operating or reserve funds.
Quorum
The minimum number of board members or homeowners required to be present at a meeting to conduct official business.
Common Areas
Shared spaces maintained and owned by the HOA, such as parks, pools, clubhouses, and landscaping.
Architectural Review Committee (ARC)
A group responsible for reviewing and approving homeowner requests for exterior modifications to ensure they comply with community guidelines. Also known as design review committee, architectural control committee, or similar.
Violation Notice
A formal notification sent to a homeowner who is not complying with HOA rules or regulations.
Board of Directors
A group of elected homeowners who oversee the HOA’s operations, financial management, and enforcement of community rules.
Management Company
A professional firm hired by the HOA to handle daily operations, financial management, vendor coordination, and resident communication.
Governing Documents
The collective set of rules and policies that dictate how the HOA functions, including the CC&Rs, bylaws, and articles of incorporation.
Fiduciary Duty
The legal responsibility of HOA board members to act in the best interests of the community when making financial and operational decisions.
Delinquency
When a homeowner fails to pay their HOA dues on time, leading to potential late fees or legal action.
RFP
A Request for Proposal is a document issued to solicit bids from vendors or service providers for projects such as landscaping, security, insurance, or community management. A well-crafted RFP helps the HOA compare vendors, ensure transparency, and select the best provider for the community’s needs.
Annual Meeting
A yearly meeting where members of the association elect the board of directors and other appropriate association business. The annual meeting is a crucial opportunity for homeowners to voice concerns, stay informed about community operations, and participate in governance.
DRV (Deed Restriction Violation), Violation, Compliance Letter
A notice issued to a member notifying them on noncompliance.
Community Association Manager (CAM)
A professional hired by the HOA or management company to oversee daily operations, enforce rules, manage vendors, and assist homeowners. The community manager acts as a liaison between the HOA board and residents, ensuring smooth operations and a well-maintained association.
Why Understanding HOA Terms and Terminology Matters
Being familiar with these terms helps homeowners and board members make informed decisions, stay engaged in community affairs, and ensure smooth HOA operations. If you’re unsure about any HOA-related terms, your local management company can help clarify and guide you through the complexities of HOA governance.
At Arizona Community First Management, we’re here to help HOAs and homeowners navigate their communities with ease. Contact us for expert guidance and professional management support tailored to Arizona communities!
