Property owner associations (POAs) act as the backbone of thriving residential and commercial communities. They assist in maintaining order and managing shared resources, but they are often confused with homeowners associations (HOAs). The importance of their roles is also sometimes overlooked.
By definition, a POA is an organization established to manage and administer shared resources within a community. These amenities could include:
The association aims to maintain and enhance the overall value and quality of the properties within the community it governs.
Typically, individuals and businesses that own properties within a specific area automatically become part of the POA. As members, they have certain rights and responsibilities, such as:
In addition to property owners, property managers, tenants, local government representatives, service providers (property maintenance, security, etc.), and other interested parties can be a part of a POA.
When a property developer acquires a tract of land, they design a master plan for the development that covers all aspects of the community, including:
The master plan is approved by the relevant agencies and becomes a publicly available document that anyone can read or review.
Once the master plan is in place, the developer creates the governing documents for the POA. These documents include:
As properties are constructed and sold, the developer initially retains control of the property owners association. During this first phase, the developer is responsible for managing the community, enforcing the rules, and maintaining common areas and amenities.
However, the developer's control is not meant to be permanent. When ownership of a certain percentage of the developed properties is transferred to third parties, control of the POA is transferred to the property owners. This ensures that the community's members have a say in how it is managed.
As part of the transfer of the POA to property owners, an association election is held to choose the initial board members.
The board members are usually members who volunteer to take on leadership roles in the community. Moving forward, they take over the responsibility of managing the association and making decisions on behalf of the property owners.
Once the control is transferred to the property owners, the POA becomes a self-governing entity. The elected board works with members to uphold the governing documents, maintain the community's infrastructure and amenities, enforce rules and regulations, and manage the association's finances.
POAs and HOAs are sometimes confused but differ in two major aspects:
Wondering if a property owner can withdraw from a property owners association? Take a look at our recent article!