HOA Glossary
Essential terms and definitions every homeowner and board member should understand. Clear explanations of complex HOA concepts to help you navigate community association life with confidence.
Understanding HOA Terminology
Whether you're a new homeowner or seasoned board member, these definitions will help you understand the language of community associations and make informed decisions about your HOA.
A
Assessments
Regular fees paid by homeowners to fund HOA operations, maintenance, and reserves. Assessments are typically paid monthly or quarterly and cover common area maintenance, utilities, insurance, management fees, and capital reserves.
Annual Meeting
Yearly gathering of all homeowners to discuss community business, elect board members, review financial reports, and vote on important issues. Most state laws require HOAs to hold annual meetings with proper notice to all members.
Architectural Review Committee (ARC)
Group responsible for reviewing and approving exterior changes to homes and landscaping to ensure compliance with community standards. The ARC helps maintain property values and aesthetic consistency throughout the neighborhood.
B
Board of Directors
Elected homeowners who manage the HOA's affairs, make policy decisions, and oversee community operations. Board members have fiduciary responsibilities to act in the best interests of the association and all homeowners.
Budget
Annual financial plan that outlines expected income (assessments) and expenses (maintenance, utilities, insurance, reserves) for the upcoming year. The budget determines assessment amounts and guides spending decisions.
Bylaws
Internal rules that govern how the HOA operates, including board meeting procedures, voting requirements, election processes, and member rights. Bylaws can typically be amended by homeowner vote.
C
CC&Rs (Covenants, Conditions & Restrictions)
Legal documents that govern a homeowners association, establishing rules, restrictions, and guidelines for property use, architectural standards, and community behavior. CC&Rs are legally binding and run with the land, meaning they apply to all current and future property owners.
Collections Policy
Formal procedures an HOA follows to collect overdue assessments from delinquent homeowners. Collections policies outline payment deadlines, late fees, interest charges, and legal actions including liens and foreclosure processes.
Common Areas
Property owned and maintained by the homeowners association for the benefit of all residents. Common areas typically include amenities like pools, clubhouses, playgrounds, parking areas, landscaping, and shared infrastructure like roads and utilities.
Community Association Manager
Professional who assists the HOA board with daily operations, vendor coordination, financial management, and compliance issues. Managers help reduce board member workload while ensuring professional administration.
D
Declaration
The founding legal document that creates the homeowners association and establishes its authority over the community. The declaration typically includes CC&Rs, architectural guidelines, and assessment powers.
Delinquency
Status of a homeowner who has failed to pay HOA assessments by the due date. Delinquent accounts are subject to late fees, interest charges, and potential legal action including liens.
E
Enforcement
Process of ensuring compliance with CC&Rs, rules, and regulations through violation notices, fines, and legal action when necessary. Effective enforcement maintains community standards and property values.
Escalating Fines
Increasing penalty structure for continued rule violations, typically starting at $25-50 and increasing with each day or occurrence of non-compliance. Designed to encourage prompt resolution of violations.
Executive Session
Closed board meeting restricted to board members only, used to discuss confidential matters such as legal issues, personnel matters, or contract negotiations. Most states require specific justifications for executive sessions.
Estoppel Certificate
Legal document providing official confirmation of an owner's account status, including current assessments, outstanding balances, and violation status. Required for property sales and refinancing.
F
Fiduciary Duty
Legal obligation of HOA board members to act in the best interests of the association and all homeowners, exercising care, loyalty, and good faith in their decision-making. Fiduciary duty requires board members to avoid conflicts of interest.
Foreclosure
Legal process where an HOA can force the sale of a property to collect unpaid assessments and fees. Foreclosure is typically a last resort after other collection efforts have failed.
H
HOA (Homeowners Association)
Legal entity created to manage and maintain a residential community, enforce rules and regulations, and preserve property values. HOAs are typically governed by elected boards and funded through homeowner assessments.
G
General Liability Insurance
Insurance coverage protecting the HOA against claims of bodily injury or property damage occurring in common areas. Essential protection for lawsuits, accidents, and liability claims.
Governance
System of policies, procedures, and decision-making processes that guide HOA operations. Good governance ensures transparency, accountability, and effective community management.
I
Insurance
Coverage protecting HOA common areas, liability, and association property. May include general liability, property insurance, directors & officers coverage, and fidelity bonding.
Incorporation
Legal process creating the HOA as a corporation, providing liability protection for board members and establishing the association as a separate legal entity with specific powers and responsibilities.
Interest
Additional charges applied to overdue assessments and fees, typically calculated as a percentage per month or annually. Interest rates and calculation methods must be specified in governing documents.
J
Judicial Foreclosure
Court-supervised process where an HOA can force the sale of a property to collect unpaid assessments. Requires filing a lawsuit and obtaining court approval, providing additional protections for homeowners.
L
Lien
Legal claim placed on a property for unpaid HOA assessments, fees, or fines. A lien must typically be satisfied before the property can be sold or refinanced, giving the HOA security for collecting debts.
M
Management Company
Professional service provider that assists HOAs with daily operations, financial management, vendor coordination, and administrative tasks. Management companies help boards focus on governance while ensuring professional operations.
N
Non-compliance
Failure to follow HOA rules, regulations, or CC&Rs, resulting in violation notices and potential fines. Common areas include architectural violations, parking infractions, and maintenance issues.
Notice Requirements
Legal timing and format requirements for HOA communications, including meeting announcements, hearing notices, and violation letters. Most states mandate specific advance notice periods.
O
Operating Budget
Annual financial plan covering day-to-day HOA expenses including utilities, landscaping, insurance, management fees, and routine maintenance. Separate from reserve fund contributions.
Open Meeting Laws
State requirements ensuring homeowner access to most board meetings and decision-making processes. Promotes transparency while allowing executive sessions for confidential matters.
P
Property Manager
On-site professional responsible for daily community operations, vendor coordination, and resident services. Different from off-site community association managers who focus on administrative tasks.
Proxy Voting
Written authorization allowing another person to vote on your behalf at HOA meetings. Useful when owners cannot attend important votes but want their voice heard.
Pet Restrictions
Rules governing pet ownership including breed restrictions, size limits, number of pets, leash requirements, and waste cleanup policies. Among the most commonly enforced HOA rules.
Parking Restrictions
Rules governing vehicle parking including assigned spaces, guest parking, commercial vehicles, RVs, and street parking. One of the most frequently violated and enforced HOA regulations.
Q
Quorum
Minimum number of members or board members required to be present for a meeting to conduct official business. Without quorum, votes and decisions are invalid.
R
Reserve Fund
Money set aside by an HOA for major repairs, replacements, and capital improvements to common areas and shared infrastructure. Reserve funds help avoid special assessments by planning for predictable expenses like roof replacement, road resurfacing, and equipment upgrades.
Reserve Study
Professional analysis of an HOA's common area components to determine their remaining useful life, replacement costs, and recommended funding levels. Reserve studies help boards plan for future capital expenses and avoid special assessments.
Rules and Regulations
Detailed policies that supplement CC&Rs with specific guidelines for community behavior, amenity use, parking, pets, and other day-to-day issues. Rules can typically be changed by the board without homeowner voting.
S
Special Assessment
A one-time fee charged to homeowners beyond regular HOA dues to cover unexpected expenses or major capital improvements. Special assessments are typically used when reserve funds are insufficient or for emergency repairs not covered by insurance.
Super Lien
In some states, an HOA lien that takes priority over certain mortgages for a limited amount of unpaid assessments. Indiana does not have super lien laws, so HOA liens are typically subordinate to first mortgages.
T
Transfer Fee
One-time charge when property ownership changes, covering administrative costs for updating records, providing documents to new owners, and processing account transfers. Average fee is approximately $250.
Treasurer
Board member responsible for overseeing HOA finances, budget preparation, financial reporting, and ensuring proper fiscal management. Key role in maintaining community financial health.
U
Unit
Individual home, condominium, or lot within an HOA community. Each unit typically has one vote in association matters and is responsible for paying assessments.
Utilities
Shared services that may be provided or managed by the HOA, including water, sewer, electric, gas, cable, internet, or trash collection. Costs are typically included in assessments.
V
Violation Notice
Formal written warning notifying homeowners of rule violations, typically providing a timeframe for correction and potential consequences for non-compliance. First step in enforcement process.
Vendor Management
Process of selecting, contracting, and overseeing service providers for landscaping, maintenance, repairs, and other community needs. Critical for cost control and service quality.
Voting Rights
Member's authority to participate in HOA elections and decision-making. Typically one vote per unit, though some associations may have different voting structures based on unit size or type.
W
Warranty
Guarantee provided by contractors or manufacturers on construction work, repairs, or equipment installations. Important for protecting HOA investments and ensuring quality work.
Working Capital
Funds available for immediate operational needs and cash flow management. Separate from reserves, working capital covers day-to-day expenses and emergency operating costs.
Related Resources
Explore more tools and guides to help your HOA succeed
Board Member Resources
Free templates, checklists, and guides for effective board governance.
Explore Resources →HOA Articles & Guides
In-depth articles covering HOA management, legal compliance, and best practices.
Read Articles →HOA Service Assessment
Quick assessment to determine if your community needs professional management support.
Take Assessment →Questions About Your HOA?
Our team has experience with Indiana HOA management and can help connect you with appropriate resources or assist with professional management services.
Resources
- Annual HOA Budget Review: Spring Financial Health Check
- When Board Volunteers Become Unpaid Employees: The Hidden Cost of Self-Management
- 5 Common HOA Board Mistakes and How to Avoid Them in Michiana
- The Complete Guide to HOA Reserve Fund Management: Avoiding Special Assessments Through Strategic Planning
- Digital Transformation in HOA Management: Technology Trends for 2025
Board Tools
Quick Actions
© 2025 1hoa llc. All rights reserved.