American Institute of Certified Public Accountants

Clients: Common Interest Realty Associations

Common interest realty associations are homeowner or condominium associations created by a real estate developer to control the appearance and manage any common-area assets during the marketing, managing, and selling of homes, sites or units in a residential subdivision. It grants the developer privileged voting rights in governing the association, while allowing the developer to exit financial and legal responsibility of the organization, typically by transferring ownership of the association to the owners after selling off a predetermined number of lots or units. It allows a civil municipality to increase its tax base, but without requiring it to provide equal services to all of its citizens. Membership in the homeowners association by a residential buyer is typically a condition of purchase; a buyer isn't given an option to reject it. Some homeowner associations hire and retain property management companies. The board of directors is responsible for the retention of these companies.

Most associations are incorporated, and are subject to state statutes that govern non-profit corporations and/or homeowner associations. State oversight of homeowner associations is minimal, and mainly takes the form of laws which are inconsistent from state to state. The fastest growing form of housing in the United States today is common-interest realty association (CIRA), a category that includes planned-unit developments of single-family homes, condominiums, and cooperative apartments. Since 1964, CIRA have become increasingly common and it is estimated that HOAs governed over 23 million American homes and 57 million residents.

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Copyright Blythe Paperless 2011