{"id":15852,"date":"2020-04-16T09:31:04","date_gmt":"2020-04-16T16:31:04","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=15852"},"modified":"2026-03-26T07:28:02","modified_gmt":"2026-03-26T14:28:02","slug":"buyer-how-to-form-a-homeowners-association","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/buyer-how-to-form-a-homeowners-association\/","title":{"rendered":"How to Form a Homeowners Association of Your Own in 18 Steps"},"content":{"rendered":"

If you live in a neighborhood without a homeowners association<\/a> (HOA), you may be considering starting one. After all, research has shown that HOAs can increase the value of a home by $10,000, or 4.2%<\/a>.\u00a0 Why are HOAs so powerful? Because they enforce rules and regulations in a neighborhood, keeping standards \u2014 and home values \u2014 higher.<\/p>\n

\u201cMost condo<\/a> associations, townhome<\/a> associations, and property associations are set up by a developer when the development is created,\u201d says James Kilbourne<\/a>, a partner with Allen, Stahl + Kilbourne<\/a> in Asheville, North Carolina, whose firm has practiced community association law for more than 30 years.<\/p>\n

But even if your already-established neighborhood was not formed with an HOA, you can always start one now.<\/p>\n

If you want to form a homeowners association of your own, follow this step-by-step guide.<\/p>\n

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Source: (Daniel Frank \/ Pexels)<\/figcaption><\/figure>\n

Step 1: Gauge interest in an HOA<\/b><\/h2>\n

If you want to launch an HOA in your neighborhood, you\u2019ll need a lot of neighbors to agree that it\u2019s a good idea. Laws vary from state to state; In some, you might just need majority buy-in to form an HOA, but in others, you might need everyone in your neighborhood to sign off on the idea. \u201cIt\u2019s not one-size-fits-all,\u201d says Kilbourne.<\/p>\n

As you gauge interest in whether your neighbors would like to form an HOA, you should also collect feedback about what people do and don\u2019t want the HOA to provide, and use that information to shape your path as you move forward.<\/p>\n

Step 2: Determine whether the HOA should be mandatory or voluntary<\/b><\/h2>\n

One of the first decisions you\u2019ll have to make is to decide if the HOA you\u2019d like to form is mandatory for everyone in your community or if they can choose to take part in the HOA<\/a>. If you poke around and don\u2019t think you can get the support you need to form a mandatory HOA, you may want to shift your focus toward creating a voluntary association.<\/p>\n

This will be easier or more difficult to implement depending on what you want the HOA to do. For example, if you\u2019d like to form an HOA to streamline trash service, then those that choose to opt out can schedule their own trash collection. However, if you want an HOA to pay for landscaping in your neighborhood\u2019s common areas, opting out may be more difficult, since those who choose not to join will still benefit from the work of the HOA.<\/p>\n

Step 3: Research your state and local laws \u2014 and hire an attorney<\/b><\/h2>\n

Once you\u2019ve got buy-in from all or most of the neighborhood, you\u2019ll want to research your state and local laws and reach out to an attorney.<\/p>\n

Kilbourne says that you should hire an attorney \u201cat the point at which you have a catalyst in the community that wants to see a change. Once you have that, we can look at the deeds and figure out the current arrangement.\u201d Kilbourne says that in a lot of neighborhoods, road maintenance agreements are where the desire to form an HOA starts. \u201cFolks are already paying for road maintenance, and they want to add plowing for snow or neighborhood beautification.\u201d<\/p>\n

Step 4: Figure out your wants and needs<\/b><\/h2>\n

HOAs can cover many services, so you\u2019ll want to figure out which you\u2019d like to include.<\/p>\n

\u201cHOAs typically include maintaining common areas,\u201d says Lynette Baker<\/a>, an experienced agent in Fresno County, California. \u201cIf you are in a condo, it could be the lobby; In all instances, it\u2019s usually the patio areas, landscaping throughout the community, swimming pool, spa, elevators, tennis courts \u2014 things like that. In planned communities or condos, it will often include water, sewer, and garbage fees.\u201d<\/p>\n

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Source: (Ylanite Koppens \/ Pexels)<\/figcaption><\/figure>\n

Step 5: Determine your operational needs<\/b><\/h2>\n

You\u2019ll also need to figure out the operational needs of your HOA. How will it function and run? What\u2019s the process when changes need to be made to the rules? What committees or other organizations do you need to form?<\/p>\n

These decisions may go more smoothly with oversight from a lawyer. \u201cThere are certainly as many different property arrangements as there are people,\u201d says Kilbourne. \u201cThat\u2019s why it\u2019s so important to look at each HOA individually.\u201d<\/p>\n

Step 6: Communicate your plan<\/b><\/h2>\n

Even though you\u2019ve already gotten the initial nod of approval from your neighbors, you\u2019ll need to maintain buy-in throughout the process. Keep your neighbors in the loop and communicate each step of the way so that they know they are an important part of the overall process.<\/p>\n

Good communication will keep your neighbors happy and, most likely, help them stay enthusiastic about the HOA.<\/p>\n

Step 7: Write the CC&Rs<\/b><\/h2>\n

CC&Rs are covenants, conditions, and restrictions and every HOA has them. The types of CC&Rs your HOA has will depend on the wants and needs your neighborhood has already identified.<\/p>\n

Remember that you need to get buy-in on these as well, because it\u2019s likely that some of your neighbors won\u2019t like the increased restrictions.<\/p>\n

\u201cWhen you are a part of an HOA, you lose the flexibility of what you can normally do as a homeowner<\/a>,\u201d says Baker. \u201cFor some, that loss of flexibility makes it less desirable to live in a community with an HOA.\u201d Baker adds, however, that some people prefer living in an HOA community.<\/p>\n

\u201cThey like that there\u2019s a specific look to the neighborhood. When the community looks nicer, the thought is that the homes will retain their value.\u201d<\/p><\/blockquote>\n

Step 8: Create your budget<\/b><\/h2>\n

You want to make sure you are building a solvent HOA, and that means crafting a budget that will cover the cost of everything your HOA will manage. What is the cost for the responsibilities your HOA will take on? Have you built in a buffer for price increases or emergency repairs?<\/p>\n

\u201cHOA fees<\/a> can go up over time,\u201d says Baker. Even so, you\u2019ll want to prevent fee increases whenever possible by building a realistic budget.<\/p>\n

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Source: (Bich Tran \/ Pexels)<\/figcaption><\/figure>\n

Step 9: Put together your fee schedule<\/b><\/h2>\n

You\u2019ll need to determine how much you will collect from HOA members, and how frequently. \u201cMost of the time the HOA dues are a monthly fee, but sometimes they\u2019re collected yearly,\u201d says Baker.<\/p>\n

Step 10: Name your HOA<\/b><\/h2>\n

You\u2019ll need to give your HOA a name in order to make things official. Although it doesn\u2019t really matter what you name your HOA, most are named after the neighborhood they serve.<\/p>\n

When choosing a name, make sure it isn\u2019t trademarked by another organization. You\u2019ll also want to ensure the name you choose isn\u2019t too similar to other organizations\u2019 names in order to avoid confusion.<\/p>\n

Step 11: Form an LLC or nonprofit organization to establish and manage the HOA<\/b><\/h2>\n

An HOA is a legal entity and as such it should be created as a limited liability corporation (LLC) or a nonprofit. When you file to become an LLC or nonprofit, you\u2019re taking your first true step toward becoming a real association. Take note that whether you establish your HOA as an LLC or a nonprofit, your HOA will be required to pay taxes<\/a>.<\/p>\n

Step 12: Draw up governing documents<\/b><\/h2>\n

The governing documents you create will be largely based on the operational needs of your HOA. Governing documents typically include articles of incorporation (which must be filed with your Office of the Secretary of State) and bylaws, which will spell out how frequently HOA meetings will take place, how votes will be held, and the process through which board members will be elected.<\/p>\n

Step 13: Elect the governors<\/b><\/h2>\n

It\u2019s now time to form your HOA board. Hopefully, you have some volunteers who are interested in serving, and the members of your HOA can vote to elect them to the board. Ideally, the community members serving on your board will have some experience in the role they take. For example, it\u2019s helpful if your treasurer has a financial background.<\/p>\n

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Source: (Tranmautritam \/ Pexels)<\/figcaption><\/figure>\n

Step 14: Create a website<\/b><\/h2>\n

In today\u2019s online world, it\u2019s almost unthinkable not to have a website for your HOA. Hosting a website will give you a chance to share information in one central location.<\/p>\n

If you don\u2019t have the skills to create a simple website and don\u2019t want to invest the money to hire a web designer, consider buying HOA management software<\/a>, which often has a website platform built in.<\/p>\n

Step 15: Get insurance<\/b><\/h2>\n

Just like you have homeowners insurance<\/a> to protect you in case something should go wrong at or on your property, your HOA needs insurance, too. HOA insurance will protect the association and its officers in case a homeowner sues.<\/p>\n

According to Service Insurance Group<\/a>, an HOA should have:<\/p>\n