• What is a Common Interest Development (CID)

A common interest development (“CID”) is a real property development where property owners share a common set of financial obligations, property and easement rights established within the Codes, Covenants & Regulations (CC&Rs). Those restrictions require property owners within the CIDs to “give up a certain degree of freedom of choice which [they] might otherwise enjoy in separate, privately owned property.

The Davis-Stirling Act defines a CID to include any one of the following:

– Community Apartment Project – this CID provides each property owner with an undivided ownership interest  in the entire project as well as an exclusive right to lease an apartment within the project. (Civil Code § 4105.)

– Condominium Project – this CID provides each property owner with an undivided ownership of a portion of the project together with an individual ownership interest in a separate interest in space called a condominium (or “condominium unit”). (Civil Code § 4125.) The condominiums within condominium projects are typically structured as “airspace condominium units.”

– Planned Unit Development – this CID is commonly utilized for single-family home communities. A planned unit development (or “PUD”) has either or both of the following: (a) common area that is owned by the association or by the property owners in common, and/or (b) common area and an association that maintains the common area with the power to levy and collect assessments. (Civil Code § 4175.)

– Stock Cooperative – this CID in which a corporation is formed for the purpose of owning the development. The property owners are “shareholders” of that corporation and receive a right of exclusive occupancy in a portion of the development (a unit). (Civil Code § 4190.)

CIDs may be developed and structured in numerous ways based upon the desired use and ownership composition of the CID (i.e., senior communities, high-rises, lake developments, commercial developments, mixed-use developments, golf course developments, equestrian developments, etc.).

Maintenance of a CID’s common areas, as well as enforcement of its use restrictions, are actions fulfilled by the association (aka “HOA”, “owner’s association,” or “community association”) formed to manage the CID. CIDs are legally required to be managed by an association, and the association may be incorporated or unincorporated. (Civ. Code § 4800.).

• What is an Association Management Company

A Management Company allows owners to take a hands-off approach while the their manager uses their expertise, skills, and time management to protect the owner’s investment.

Common Interest Developments (CID) are presented with very complicated issues. CIDs exist when multiple people buy a condominium, townhouse, commercial units or other types of properties in a planned unit development, such as in building, a gated community or subdivision. Each owner is required to pay associaiton fees for routine maintenance of the common areas and the building, and the Association usually maintains a reserve for more expensive repairs. CIDs might also enforce the property’s covenants, conditions and restrictions (e.g. the community’s “rules,” which might include guidelines around traffic, common area maintenance, subletting, etc.).

A management company’s duties may include handling the association’s bills, financial records, maintenance issues, and owners’ needs.

While management companies provide a range of services, most are equipped to handle the monthly collection of association dues, fines and fees. Other responsibilities include managing the annual budget; development of a long-term capital improvement/replacement plan; ongoing maintenance; finding and managing contractors; and providing adviceto the Association’s Board Directors.

• What is an HOA (Homeowner Association)

A homeowners association, or HOA, is a legal corporate entity that oversees a community of homes. They operate within state statutes to enforce community regulations and to collect periodic assessments from homeowners. HOAs are designed to proactively protect the interests of the entire community while working within a strict set of bylaws.

DID YOU KNOW​
Homeowners’ associations (HOAs), are formal, legal Non-Profit Corporations, created to maintain common areas; they have the authority to enforce deed restrictions. Covenants, Conditions & Restrictions (CC&R’s) are issued to each owner and HOAs are established to ensure that they are adhered to in order to maintain the quality and value of the community. According to the Community Associations Institute: An estimated 50 million Americans live in association-governed communities. Some 1.25 million people serve on community association boards, with another 300,000-plus serving as committee members. About 6,000 to 8,000 new community associations are formed every year. This includes condominiums, cooperatives and planned communities. It is estimated that more than four in five housing starts during the past 5-8 years have been built as part of an association-governed community. The estimated real estate value of the homes in all community associations is about $2 trillion, approximately 15 percent of the value of all U.S. residential real estate. Estimated annual operating revenue for U.S. community associations is $30 to $35 billion.

• What are the Governing Documents?

The term “governing documents” is used as a general reference to the entire group of legally recognized paperwork that creates and controls a condominium project or planned development. The governing documents typically include a subdivision map and/or condominium plan, a Declaration of Covenants, Conditions and Restrictions (or “CC&Rs”), Articles of Incorporation (if the project is incorporated), Bylaws, and Rules.

• Who runs an Common Interest Development (CID)?

An Owners association is led by a board of directors who have been elected by the unit owners. Most often, the board consists of fellow owners with an interest in keeping the neighborhood strong.

• What is an Assessment?

An assessment is the amount that is periodically due from each owner to cover the operating expenses of the common areas, hazard insurance, and to provide reserve funds for future improvements. All owners are expected to pay this assessment.

• What Do Fees Pay For?

Like any budget, a owners association budget is designed to reflect upcoming debts such as utilities, landscaping and administration. The reserve fund is money that has been set aside for future expenses, such as new lighting, fencing, and street resurfacing. A rule of thumb is that the bigger the building, the bigger the HOA dues. It stands to reason that when there are more windows, structural elements, and a larger electrical system, there are going to be more maintenance issues.

• I received a violation notice, what do I do now?

You must respond in writing (mail, fax or email) regarding the violation within the time frame stated on the notice. After a response is received, the violation is closed at the determination of the Board of Directors for your community, following the next inspection period. Boards may also conduct random inspections throughout this period and may determine that the violation is ongoing.

• How can I make changes to the appearance of my home and landscaping?

Depending on the community you live in, you may be required to complete an ARF (Architectural Request Form). Your request will then be reviewed against your HOA’s governing documents and either approved or disapproved by the HOA Board.