How to Start a Homeowners' Association

Have you ever wondered how to set up a Homeowners' Association (HOA) in your neighborhood or condominium building? With a HOA, the houses or condos in the community tend to be more uniform and the properties are maintained at a high standard. Whether it be custom mail boxes or custom street signs, neighborhoods run by an HOA are visually appealing. Your home will likely have a higher property value as well. With all these advantages, it's easy to see why you would want to start a HOA. Here's how:

1. Form a Group – Look for people who are willing to commit to the work that is required to run the association. Aim for 10 people or less, and figure out where and when to hold your meetings. Devise a strategy during your initial gatherings and set up your main goals before inviting residents to the first official meeting.
2. Research Laws and Regulations – There will be specific property codes within your state that you need to abide by when setting up a HOA. Research your local statutes online and think about hiring a lawyer or real estate expert who can make sure the association stays in line with local regulations.
3. Establish CC&Rs – These are covenants, conditions, and restrictions of the homeowners' association. These rules will establish how often meetings are held, how operations will be executed, and the voting guidelines for electing leadership of the HOA. Research existing CC&Rs in other communities as a rough guideline, and then tailor yours to your specific requirements.
4. Establish HOA as a Business – You will need to contact the IRS to obtain a tax identification number. Then you need to form an LLC or a nonprofit corporation. Open up a bank account to deposit the funds that will be paid to the HOA.
5. Create Committees – Set up a committee for internal matters and neighborhood affairs. The internal affairs committee will be in charge of social events, fundraising, and creating publicity. Neighborhood committees will be in charge of law enforcement, maintenance, community services, and traffic safety.

Following these steps will put you on your way in creating a valuable homeowners' association. People will be more likely to join the HOA if your buildings and community are well-kept and -ordered. Custom street signs, mail boxes, and other small amenities can all make your community one-of-a-kind.