Homeowners Association

In the United States, a homeowner association (HOA) is a private association formed by a real estate developer for the purpose of marketing, managing, and selling homes and lots in a residential subdivision. It grants the developer privileged voting rights in governing the association, while allowing the developer to exit financial and legal responsibility of the organization. Typically the developer will transfer ownership of the association to the homeowners after selling a predetermined number of lots. Generally any person who wants to buy a residence within the area of a homeowners association must become a member, and therefore must obey the several restrictions that often limit the owner's choices. Most homeowner associations are incorporated, and are subject to state statutes that govern non-profit corporations and homeowner associations. State oversight of homeowner associations is minimal, and it varies from state to state. Some states, such as Florida and California, have a large body of HOA law. Other states, such as Massachusetts, have virtually no HOA law. Homeowners associations are primarily associated with mid- and late 20th-century and 21st-century residential development.

The fastest-growing form of housing in the United States today are common-interest developments (CIDs), a category that includes planned unit developments of single-family homes, condominiums, and cooperative apartments. Since 1964, HOAs have become increasingly common in the United States. The Community Associations Institute trade association estimated that in 2010, HOAs governed 24.8 million American homes and 62 million residents.

HOAs were first established by land developers in the United States in the mid-19th century. Their growth was limited, however, until the 1960s, when several factors led to a period of rapid national growth. Large-scale suburban residential development was encouraged by the Federal Housing Authority and the Urban Land Institute, as the construction of highways had made commuting to cities from outside areas easy. There was an increasing social preference to control and preserve architectural quality in developments. The amount of readily available land declined near business centers. Rising construction costs made large-scale development and savings more attractive; and federal mortgage insurance rules were changed to include cooperatives and condominiums, as well as such planned developments controlled by HOAs.

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