Buying an Alabama-Florida Beach Condominium Home

Basics of Homeowner Associations

Condominium Homeowner Associations



Owning a Condo : Gulf Shores, Orange Beach, Perdido Key


Gulf Shores, Orange Beach, Perdido Key, Fort Morgan

Owners of a condominium are required to be members of the Homeowner Association (HOA); the HOA is responsible for collecting dues from members to insure the common property, perform routine building maintenance, pay the accountant, etc. The members are typically responsible for insuring everything within the walls of their condo.

With a condominium, you own everything inside the residence, from the interior side of the walls.  Property owners hold title to the condominium unit itself, but not the land under the home nor the space above it; all owners of a condominium share an undivided interest in the common elements: the grounds, roof, pools, elevators, building exterior and other components - each owner is responsible for an equitable share of the expenses needed to maintain and protect the property.

A HOA can make and enforces rules for the property and levy special assessments on the members when the association lacks sufficient funds to pay for unplanned expenses. Some HOA's are strict about what the members can do and may have rules & regulations in place that govern window-coverings, signs, pets, plants, color of exterior door, etc. Homeowners associations have significant legal authority when owners "break the rules" or don't pay their share of expenses - they can fine members, place a lien on a their property, and even foreclosure on the unit.

Board of Directors & Officers of the HOA have a fiduciary duty to the members of the Association - trust and confidence is imposed on the directors and officers to act in good faith, with prudence and diligence, in the best interest of the members, regardless of cost.  If a Director or Officer has breached their fiduciary duty, their personal assets may be at risk; volunteer members are not relieved of fiduciary duty - upon acceptance of a Director or Officer position, the law presumes knowledge of the duties and responsibilities.  The HOA should have a Directors and Officers Liability Insurance Policy payable to the Association, as indemnification for losses resulting from negligence, fraud, or conflict of interest.

A Reserve Fund is necessary to ensure the HOA has adequate funds for major expenditures (roof, water-proofing, etc.). Major expenditures should be planned well in advance with the assistance of a Reserve Study, this will ensure the HOA has adequate funds and the replacement cost of the major component is allocated equitably.

 Wayne Moore
Lic. Real Estate Broker
Licensed Home Inspector
Lic. Community Assoc. Manager
 
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Condominium Homeowner Associations - HOA, Alabama-Florida
Gulf Shores-Perdido Key-Pensacola-Fort Walton-30A-Destin-Orange Beach