The Community Owners Association (COA) is the governing structure for many residential communities. Understanding the COA’s role is important for anyone purchasing property in a managed development, as this entity dictates shared responsibilities and standards of living. The COA acts as the centralized authority responsible for the collective welfare and management of the shared environment.
Defining the Community Owners Association (COA)
A Community Owners Association is established as a legal entity, frequently structured as a non-profit corporation, designed to manage and maintain the shared elements of a common interest development. These associations are prevalent in planned unit developments, master-planned communities, townhome complexes, and condominium buildings. The COA ensures a consistent quality of life and protects property values for all members.
Membership in the COA is a mandatory condition of ownership for any property within the community, legally tied to the property deed. The COA operates through a volunteer Board of Directors, typically composed of property owners elected by the general membership. This board is tasked with making administrative and financial decisions on behalf of the entire community, adhering to the legal framework established at the community’s inception.
The Governing Documents and Legal Framework
The operational power and legal authority of a COA are derived from foundational documents that establish the rules and structure of the community. These legally binding documents often reference specific state statutes, such as Condominium Acts, which grant the association enforcement power. Understanding this hierarchy of rules is necessary for any current or prospective homeowner.
Covenants, Conditions, and Restrictions (CC&Rs)
The CC&Rs are the most comprehensive of the governing documents, outlining property rights and limitations within the community. These covenants define what owners can and cannot do with their property, covering areas like exterior color palettes, landscaping standards, parking rules, and property uses. The CC&Rs are recorded with the county recorder’s office and are legally enforceable against all current and future owners.
Bylaws
Bylaws focus on the internal operations of the COA, providing procedural rules for how the association is run. They specify details such as the number of directors, the length of their terms, the frequency of board meetings, and the process for conducting elections. The bylaws also establish procedures for calling membership meetings and the required quorum needed to conduct official business.
Articles of Incorporation
The Articles of Incorporation are the foundational document filed with the state to recognize the COA as a legal corporate entity. This document formally establishes the association’s existence and non-profit status, defining its overall purpose and corporate powers. While less involved in day-to-day operations than the CC&Rs or Bylaws, the Articles are the legal basis for the association’s authority.
Core Functions and Responsibilities of the COA
The COA Board of Directors executes a broad range of management functions that directly impact the community’s appearance, financial stability, and overall operation. These responsibilities are delegated to the board by the governing documents and are carried out to preserve the collective assets of the community.
Maintaining Common Areas
A primary function of the COA is the upkeep and maintenance of all common property shared by the owners. This includes regular services such as landscaping for shared grounds, snow removal on private streets, and maintenance of recreational facilities like pools, clubhouses, and fitness centers. In condominium regimes, this responsibility extends to structural elements like roofs, exterior walls, and elevators.
Managing Association Finances and Reserves
The board is responsible for financial oversight, involving creating and approving an annual budget for operating expenses. A significant component is managing the reserve funds, which are monies set aside for the future replacement or repair of major components like pavement, roofs, or mechanical systems. Adequate reserve funding measures the association’s long-term financial health.
Rule Enforcement and Architectural Review
The COA must enforce the CC&Rs uniformly across the community to maintain aesthetic consistency and order. Enforcement involves issuing violation warnings and levying fines against owners who fail to comply with established rules, such as parking violations or unapproved exterior modifications. Many associations also employ an Architectural Review Board (ARB) to review and approve or deny owner requests for exterior changes, ensuring adherence to design standards.
Securing Association Insurance
Protecting the community’s physical and financial assets requires the COA to secure comprehensive insurance policies. This includes a master hazard insurance policy that covers common elements and structures against damage from perils like fire or severe weather. The association must also carry general liability insurance to protect the COA and its directors from claims arising from injuries on common property.
Understanding COA Fees and Special Assessments
Property ownership within a COA requires a financial contribution from each homeowner to fund the association’s operational and reserve needs. These recurring payments, known as COA fees or dues, are collected monthly or quarterly. They cover routine costs like common area maintenance, utilities, insurance premiums, and management fees. The amount is determined by the annual budget and distributed proportionally among the members.
Beyond the regular fees, a Special Assessment is a separate, one-time charge levied against all owners. This occurs when the association faces an extraordinary expense not covered by the operating budget or sufficient reserve funds. These assessments are typically required for unexpected major repairs, such as storm damage or the premature failure of a large system.
Failure to pay regular dues or a special assessment can lead to severe consequences. The COA often has the legal authority to place a lien on the property, which can eventually lead to foreclosure.
The Rights and Obligations of Property Owners
While the COA imposes certain restrictions, property owners retain rights that ensure their voice is heard in the community’s governance. Owners have the right to vote in board elections and on major community decisions requiring membership approval, such as amending the governing documents. They are also entitled to attend open board meetings and review the association’s financial records, promoting transparency.
Conversely, property owners assume specific obligations mandatory for maintaining community standards and financial stability. The primary obligation is the timely payment of all COA fees and assessments to ensure the association can meet its financial commitments. Owners must also adhere to all rules outlined in the CC&Rs, including maintenance standards for their individual property and compliance with architectural guidelines for any planned exterior changes.
Common Challenges and Potential Drawbacks of COAs
Despite the benefits of shared maintenance and amenity access, COAs present potential drawbacks that prospective buyers should consider. A frequent source of conflict is the enforcement of rules, which some owners perceive as overly restrictive or intrusive, particularly regarding minor aesthetic choices for their private property. Disputes often arise when owners feel the board is not applying the rules consistently or fairly across the community.
Financial issues also pose a challenge, including sudden fee hikes or the necessity of large Special Assessments due to past mismanagement or underfunding of reserve accounts. The COA’s effectiveness relies on the competence and transparency of the volunteer board members; poor decision-making can lead to community dissatisfaction. Buyers are advised to conduct due diligence by reviewing meeting minutes and financial statements to assess the association’s operational history and financial stability before committing to a purchase.