Homeowners Associations (HOAs) often come into question regarding the ownership of the land on which they sit. While many believe that HOAs possess or control the land within a residential community, this is not always the case. In reality, HOAs are typically created to manage and maintain certain common areas and amenities, rather than owning the land itself. This article aims to clarify the concept of land ownership within HOAs and provide insights into how this varies based on different types of developments, including Condominiums and Cooperatives.

What is an HOA?

Homeowners Associations (HOAs) are associations of homeowners typically formed within a subdivision or community designed to manage and maintain the common areas and amenities within the community. HOAs are established by developers to ensure the smooth operation and upkeep of the residential environment. These associations have the authority to enforce community rules, collect dues, and manage shared resources. In many cases, the actual land ownership can vary significantly.

Typical Ownership Structure

Generally speaking, the land and individual lots where homes are constructed are owned by the individual homeowners or sometimes the developer, while the HOA can hold title to common properties such as parks, swimming pools, and clubhouses. However, it is imperative to review the specific governing documents for each HOA to understand the precise ownership details and responsibilities applicable to that community.

Common Areas Ownership

Let's delve into how HOAs typically manage and own common areas within a development.

HOAs and Common Elements

HOAs often manage and maintain common elements such as:

Clubhouses Tennis courts Play areas for children Swimming pools Walking paths Parking lots

It is important to note that these common areas are owned by the HOA, but the homes located on the individual lots are owned by the respective homeowners. This creates a distinction in property ownership within a community association setting.

Types of Associations and Property Ownership

Planned Unit Developments (PUDs) aka HOAs

For PUDs (Planned Unit Developments), the ownership structure is:

Homeowners own their home/lot The association owns the "common elements" such as roads, clubhouse, pool, and any other areas not part of a specific lot/unit

Some associations do not even own recreational facilities, pools, or even the roads and sewer system. In such cases, these common elements might be owned by another corporation or entity.

Condominiums

InCondominiums, the ownership is structured differently. Homeowners own the "airspace" of their units:

This includes the interior spaces, walls, and any structural elements of the building like electrical wiring, plumbing, and drywall Homeowners also have a percentage ownership in the "common elements" as defined in the Declaration of Condominium

This means that homeowners are responsible for the structural integrity of their unit but also have a share in the overall maintenance and management of common areas.

Cooperatives

Cooperatives have a unique ownership structure:

Owners receive a share in the cooperative association and a lease to occupy a certain unit/lot The cooperative is typically formed with a defined lease term, often 99 years, so if someone purchases a unit 10 years after it's formed, they receive an 89-year lease on the lot/unit

This structure ensures that the cooperative association is responsible for the management and maintenance of the complex, while homeowners have a leasehold interest in the specific unit they occupy.

Conclusion

Understanding the ownership structure of a Homeowners Association is crucial for both prospective homeowners and current residents. While HOAs typically manage and maintain common areas, the ownership of individual homes and lots remains vested with the individual homeowners or the developer. Each type of development (PUDs, Condominiums, and Cooperatives) has its unique ownership and management rules, as outlined above.