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A homeowner association (or homeowners' association [HOA], sometimes referred to as a property owners' association [POA], common interest development [CID], or homeowner community) is a private, legally-incorporated organization that governs a housing community, collects dues, and sets rules for its residents. HOAs are found principally in the United States, Canada, the Philippines, as well as some other countries. They are formed either ipso jure (such as in a building with multiple owner-occupancies), or by a real estate developer for the purpose of marketing, managing, and selling homes and lots in a residential subdivision.[1]The developer may transfer control of an HOA after selling a predetermined number of lots.[1]
In most cases, a person who wants to buy a residence within the area of a HOA must become a member, and therefore must obey the governing documents including articles of incorporation, CC&Rs (covenants, conditions and restrictions) and by-laws—which may limit the owner's choices, for example, exterior design modifications (e.g., paint colors). HOAs are especially active in urban planning, zoning, and land use—decisions that affect the pace of growth, the quality of life, the level of taxation, and the value of land in the community.[2]: page?
Most HOAs are incorporated, and are subject to state statutes that govern non-profit corporations and HOAs. State oversight of HOAs varies from state to state; some states, such as Florida and California,[3][4] have a large body of HOA law. Other states, such as Massachusetts,[5] have limited HOA law. HOAs are commonly found in residential developments since the passage of the Davis–Stirling Common Interest Development Act in 1985. In Canada, HOAs are subject to stringent provincial regulations and are thus quite rare compared to the United States. However in recent decades, HOAs have infrequently been created in new subdivision developments in Alberta and Ontario.
The fastest-growing form of housing in the United States today are common-interest developments (CIDs), a category that includes planned unit developments of single-family homes, condominiums, and housing cooperatives.[relevant?][6] Since 1964, HOAs have become increasingly common in the United States. The Community Associations Institute trade association estimated that in 2010, HOAs governed 24.8 million American homes and 62 million residents.[7] Throughout the rest of the world, HOAs—though they do exist in some neighborhoods—are uncommon.