The first few months of a new association, or a new management company’s engagement with an existing community, often establish the expectations and practices that will shape the community for years. A few simple steps at the beginning can prevent misunderstandings, reduce disputes, and make the transition much smoother.
New homeowner and condominium associations often begin with the same goals: building community, collecting assessments, maintaining common areas, and operating consistently with the governing documents. New management companies stepping into an existing community often have many of the same concerns. The challenge is that small mistakes early on can create confusion, owner frustration, collection delays, and avoidable legal issues for the HOA.
This article addresses five practical tips for new associations, new boards, and management companies beginning work with a community association.
1. Provide Homeowners with the Governing Documents
New homeowners should receive, or at least be directed to, the association’s governing documents by the HOA. These typically include the declaration, bylaws, articles of incorporation, rules and regulations, architectural guidelines, and any amendments.
Associations should not assume homeowners have read or understood them. Simply providing the documents is not always enough. Associations should consider directing owners to the provisions that most commonly create questions, such as architectural approval requirements, leasing restrictions, parking rules, and assessment obligations.
This may seem obvious, but it is one of the most important steps an association can take. Owners are more likely to comply with the governing documents when they know what the documents require. Associations should also make sure they provide up-to-date information. Sending out outdated information can create confusion and make enforcement more difficult.
2. Explain That Mortgage Payments and HOA Dues Are Separate
Many owners understand that they must pay their mortgage, but some do not realize that association assessments are a separate set of obligations. This misunderstanding can be especially common among first-time buyers, owners who are new to homeowner association communities, and owners from different cultural or language backgrounds who may be unfamiliar with how private community associations operate.
During my time working with collection matters, the most common statement I heard from homeowners at foreclosure hearings was that they believed their mortgage payment included their HOA dues. Initially, I assumed this was simply an excuse. After hearing it repeatedly, however, I came to believe many owners genuinely misunderstand the distinction.
For that reason, associations and management companies should clearly explain to new homeowners that mortgage payments are owed to the lender, while HOA assessments are owed separately to the association. Making this distinction early can help prevent missed payments, costs, and unnecessary disputes.
3. Provide Clear HOA Contact Information
Homeowners should know who to contact with questions. Welcome materials should identify the management company, the community manager, how to access the owner portal, and where payments should be sent.
Owners should also know how to report emergencies after business hours, such as water leaks or other issues involving the common areas. Providing this information early can help prevent confusion when a problem needs immediate attention.
Homeowners should also be informed about what happens if an account is sent to the association’s attorney. Once this occurs, the homeowner generally needs to contact the attorney’s office to make payments, discuss the balance, or avoid further legal action. Clear contact information can help prevent delays, misunderstandings, and frustration.
4. Understand Important Time Limits
Associations should be aware that certain rights and enforcement actions have time limits. For example, in North Carolina, a claim of lien for unpaid assessments is extinguished unless proceedings to enforce the lien are instituted within three years after the claim of lien is filed.
Restrictive covenant violations are also subject to legal deadlines. Associations should not assume they can wait indefinitely before enforcing known violations. Waiting too long may affect available remedies, so boards and managers should consult legal counsel when significant violations arise.
Other practical deadlines can arise in day-to-day association operations, including deadlines for responding to architectural applications, preserving evidence after property damage, reporting insurance claims, and filing liens. Boards and managers do not need to memorize every deadline, but they should recognize that timing matters and seek guidance when collection or enforcement issues arise.
5. Be Consistent
Consistency is one of the most important practices for any association. Homeowners should be treated similarly when similar issues arise. This applies to assessment collection, violation notices, architectural requests, hearings, payment plans, and general enforcement. Inconsistent treatment can lead to frustration, claims of unfairness, and difficulty defending board decisions.
Consistency does not mean every situation will have the same result. Facts matter. But associations should make decisions based on the governing documents, past practice, and the specific circumstances involved. Inconsistent enforcement can also create allegations of selective enforcement or waiver and may make future enforcement more difficult.
Conclusion
New associations rarely encounter problems because they lack good intentions. More often, problems develop because expectations are not communicated early and procedures are not followed consistently. Investing a little time at the beginning can save substantial time, expense, and conflict later.
Associations and management companies should also develop a relationship with association counsel early. Developing relationships with supporting counsel helps managers learn the governing documents, helps boards understand when legal advice is appropriate, and helps ensure that enforcement and collection procedures are established correctly before problems arise.
Fred Hulse is an associate with Law Firm Carolinas, having gained experience in employment and labor law, civil litigation, and real estate law. His work includes legal research, memorandum drafting, discovery, and more.