What is a Property Owners Association?

When purchasing a property, you might come across a term you’re less familiar with: Property Owners' Association (POA). These organisations play a significant role in maintaining and governing many residential communities, ensuring shared spaces and amenities are well-managed while upholding certain community standards.

What is a property owners association?

A Property Owners Association (POA) is an organisation created to manage and maintain a residential community, typically consisting of homeowners or landowners within a specific area. These associations are common in neighbourhoods, private housing estates, or developments where shared services, amenities, or property features exist.

They ensure that communal areas are properly maintained, and they often set and enforce rules to uphold the community’s standards.

How do Property Owners Associations work?

A POA is similar to a Homeowners Association (HOA) but may have different scopes and responsibilities.

POAs are typically governed by a board of directors, which is elected by the property owners within the community. The board is responsible for making decisions on behalf of the property managers and for overseeing the day-to-day operations of the POA.

POA board members play a crucial role in ensuring that the community runs smoothly and that the interests of the property owners are represented.

Responsibilities of a Property Owners Association

A Property Owner Association has several key responsibilities that are essential for the smooth operation and maintenance of the community...

Maintenance of Common Areas

One of the primary responsibilities of a POA is to maintain the common areas within the community. This can include tasks such as:

• Landscaping and Grounds Maintenance: Ensuring that lawns, gardens, and other green spaces are well-kept and aesthetically pleasing.
• Repairing and Maintaining Common Facilities: Taking care of shared amenities like swimming pools, clubhouses, and playgrounds to ensure they are safe and functional.
• Cleanliness and Safety: Regularly cleaning common areas and addressing any safety concerns to provide a pleasant environment for residents.

Enforcement of Rules and Regulations

POAs are also responsible for enforcing the community rules and regulations, which are often outlined in the governing documents such as the CC&Rs (Covenants, Conditions, and Restrictions) and by-laws. This can include:

• Compliance with Governing Documents: Ensuring that property owners adhere to the community’s rules regarding property appearance, noise levels, and other regulations.
• Dispute Resolution: Mediating conflicts between property owners to maintain harmony within the community.
• Imposing Penalties: Enforcing fines or other penalties for non-compliance with community rules to ensure that standards are upheld.

Financial Management

Effective financial management is crucial for the sustainability of a POA. Responsibilities in this area include:

• Collecting Assessments: Gathering regular fees from property owners to fund the maintenance and services provided by the POA.
• Budgeting: Creating and managing budgets to ensure that funds are allocated appropriately for various community needs.
• Transparency and Accountability: Keeping the community’s finances transparent and accountable to property owners, ensuring that all expenditures are justified and beneficial to the community.

By fulfilling these responsibilities, a Property Owners Association can help to maintain property values, provide a sense of community and belonging among property owners, and ensure that the community is a pleasant and safe place to live.

Property owners association fees

One of the key aspects of a property owner’s association is the collection of fees, commonly referred to as POA fees or maintenance fees. These fees are usually charged monthly, quarterly, or annually and go towards the maintenance of communal areas, services, and any additional amenities provided by the association.

These fees are similar to HOA fees, which also cover community services and property maintenance.

The amount charged will vary depending on the size of the development, the number of shared amenities, and the general upkeep required. For example, a large estate with private roads and recreational facilities will typically have higher POA fees than a smaller community with fewer amenities.

Rules and regulations set by a property owners association

A POA creates and enforces rules to ensure the smooth operation of the community. Homeowners associations (HOAs) also set similar rules to maintain community standards and harmony.

These rules typically cover aspects like property appearance, noise levels, landscaping, and use of shared facilities. Some common regulations might include:

• Restrictions on exterior changes to homes, such as painting, roofing, or extensions.
• Guidelines for parking vehicles in the neighbourhood.
• Limits on noise levels and quiet hours.
• Rules on pets, including the number or type allowed.
• Maintenance requirements for yards and gardens.

These regulations are designed to maintain the aesthetic and functional harmony of the neighbourhood, and failure to comply can result in fines or other penalties. It’s important for property owners to understand and agree to these terms when purchasing within a POA-managed community.

Benefits of a property owner's association

There are several benefits to living in a community with a POA:

• Well-maintained common areas: The association ensures that communal spaces are cared for, meaning parks, roads, and recreational facilities are consistently maintained. Community residents often play an active role in the governance of the POA, contributing to decision-making and community well-being.
• Higher property values: By setting and enforcing community standards, a POA can help to preserve or even enhance property values over time.
• Amenities: Many POAs provide additional services or amenities, such as security, fitness centres, or community events, which can be a significant advantage to homeowners.
• Dispute resolution: The POA acts as an intermediary in conflicts between neighbours, offering a neutral party to help resolve disagreements.

Potential drawbacks of a property owner's association

While there are clear benefits to a POA, some property owners may find certain aspects challenging:

• Fees: The cost of POA fees can be high, especially in larger developments with multiple amenities. These fees are mandatory, and failure to pay can result in fines or legal action.
• Rules: The regulations imposed by a POA can sometimes feel restrictive, particularly if you wish to make changes to your property that are not permitted by the association.
• Limited control: Because the POA governs the community, individual homeowners may have limited say in decisions regarding the neighbourhood.

How do I find out if a property has a POA?

If you’re considering purchasing a property, it might be worth checking if it's a part of a property owner’s association. This information is typically disclosed during the purchasing process.

A real estate agent can provide valuable insights and necessary documentation to help potential buyers understand the implications of living in a POA-managed community. You can:

• Ask the estate agent or seller directly.
• Review the property ownership documents for any mention of a POA.
• Speak to current residents in the neighbourhood.

Understanding the fees, rules, and responsibilities that come with living in a POA-managed community is crucial before making a decision.

Summary: Worth the check...

A property owner's association can offer significant benefits, such as well-maintained communal areas, increased property values, and access to shared amenities. However, it also comes with mandatory fees and a set of rules that homeowners must follow.

For many, the advantages outweigh the disadvantages, but it’s important to fully understand the terms of the POA before buying a property in a managed community.

If you’re selling your home or a rental property and want to learn more about how a POA might affect your home’s value, feel free to get in touch with GetAgent for expert advice. We can help you navigate the selling process and find the right estate agent to meet your needs!