HOA & Community Association 101

The paperwork stack that answers almost every question

Nearly every "can the board do that" question resolves the same way: federal and state law first, then the recorded declaration that created the association, then the articles of incorporation and bylaws, then rules the board has adopted, then the specific decision in front of you. Each level can restrict what sits below it, and none of them can override what sits above it. The exact order, and which document wins when two conflict, is set by your own state's statute.

This is also why courts protect a board's decisions instead of second-guessing them, as long as the board stayed inside that stack.

"Where a duly constituted community association board, upon reasonable investigation, in good faith and with regard for the best interests of the community association and its members, exercises discretion within the scope of its authority under relevant statutes, covenants and restrictions to select among means for discharging an obligation to maintain and repair a development's common areas, courts should defer to the board's authority and presumed expertise."

Source: Lamden v. La Jolla Shores Clubdominium Homeowners Assn., Supreme Court of California

Three shapes, one shared idea

Underneath every HOA, condominium association, and cooperative sits the same legal umbrella: a community where owning your home obligates you to pay a share of costs for property you don't own alone. What changes across the three shapes is who owns the shared property. In a condominium, unit owners jointly own the common elements as tenants in common. In a typical planned community, the kind most single-family HOAs govern, the association itself holds title to the common area as a separate legal entity, and owners hold only their individual lot. A cooperative is different again: the corporation owns the whole building, and members hold stock and a lease rather than a deed. Confirm which shape your own community is; it changes who owns what and how financing works.

None of this is incidental. Shared ownership of amenities and infrastructure is what makes the arrangement more affordable than owning a single-family home outright, and it comes at a real cost: individual property rights get subordinated to collective decisions.

"Subordination of individual property rights to the collective judgment of the owners association together with restrictions on the use of real property comprise the chief attributes of owning property in a common interest development."

Source: Nahrstedt v. Lakeside Village Condominium Assn., Supreme Court of California

What most people get wrong first

Three assumptions cause more confusion in a new board member's first year than anything else. Nonprofit status under state law is not the same question as federal tax exemption; a homeowners association's default federal treatment is as a taxable corporation, and filing Form 1120-H only narrows the tax base. See Is an HOA a nonprofit?

Condo associations and subdivision HOAs do not own their common areas the same way; the difference between joint ownership by unit owners and sole ownership by the association changes what a board can do with that property. See What does an HOA actually own?

And a master association has no built-in authority over the communities beneath it. Its power exists only to the extent each sub-association's own declaration hands it over, so "the master association can do that" is a question about a specific document, not a general rule. See What is a master association?