The Words That Run a Community, Defined Plainly

6(d) certificate

Massachusetts's statement from a condominium association that no common expense assessments are unpaid on a unit, named for Section 6(d) of the condominium statute. Recorded with the deed at sale.

Also: Massachusetts 6(d) certificate, 6D certificate

22.1 disclosure

Illinois's resale disclosure for condominiums, named for Section 22.1 of the Condominium Property Act: the documents and statements a seller must obtain from the association for a buyer.

Also: Illinois 22.1 disclosure, Section 22.1 documents

Allocated interest

A condominium unit's share of the common expenses, the common elements, and the votes, stated in the declaration as a percentage or fraction. All units together total 100 percent.

Also: percentage interest, undivided interest

Amenity fee

A charge for using a community facility beyond what regular assessments cover: a clubhouse rental, a pool key, a reserved parking space. Separate from dues and from transfer fees.

Annual meeting

The once-a-year meeting of all owners where directors are elected, the budget is presented, and the year's business is put to a vote. Required by the bylaws and usually by statute.

Architectural review committee

The committee that reviews an owner's request to change the outside of a home: paint, fences, additions, solar panels, landscaping. Its authority comes from the declaration.

Also: ARC, ACC

Assessment

The owner's share of the association's budget, charged on a schedule. Dues is the everyday word; assessment is the one in the declaration and the statute.

Also: HOA dues, regular assessment

Board of directors

The owners elected to run the association: adopt the budget, levy assessments, maintain the common areas, enforce the rules, and hire the manager. Officers are chosen from among them.

Board packet

The set of reports a board reads before its meeting: the financial statements, the delinquency list, open violations and requests, bills awaiting approval, and the agenda.

Bylaws

The association's operating rules as a corporation: how the board is elected, how meetings are called, what counts as a quorum, and who may do what.

Capital contribution

A one-time payment a buyer makes to the association at closing, where the declaration provides for it, often equal to a few months of assessments. Not a prepayment of dues.

Also: working capital contribution, initiation fee

CC&Rs

The recorded declaration that creates the association and binds every home in it: what owners may do with their property, what they owe, and how the community is governed.

Also: covenants, conditions, and restrictions, declaration

Common elements

Everything in a condominium that is not a unit: the land, the structure, the roof, the hallways, the pool. Limited common elements serve one unit but belong to all, like a balcony or a parking space.

Also: common areas, limited common elements

Condo questionnaire

The form a buyer's lender sends the association to decide whether the condominium qualifies for a conventional loan: ownership mix, delinquencies, reserves, insurance, litigation, and more.

Also: lender questionnaire, Fannie Mae Form 1076

Constructive notice

The legal rule that a person is treated as knowing what the public records contain. A buyer is bound by the recorded CC&Rs whether or not they read them.

Delinquency

An owner account that is past due. Collections follow a ladder of notices, late fees, a lien, and in the end referral to an attorney, each step with its own notice period.

Demand letter

In a closing, the association's statement of the exact amount needed to bring a home current through the closing date. In collections, a letter demanding payment before a lien or suit.

Also: payoff statement, closing demand

Estoppel certificate

A binding statement of what is owed on a home, furnished by the association before closing; in Florida, the statutory resale document for HOAs and condos.

Also: estoppel letter, HOA estoppel

Fine

A monetary penalty the association charges an owner for breaking a rule, after the notice and hearing the governing documents and state law require.

Fiscal year

The twelve months the association budgets and reports on. Many run on the calendar year; others pick a year that ends after the busy season or matches the audit.

Fund accounting

Accounting that tracks money by its purpose rather than in one pool: operating, reserve, and special assessment funds, each with its own balance and its own statements.

Governing documents

The set of documents that govern a community, in rank order: state law, the recorded declaration or CC&Rs, the articles of incorporation, the bylaws, and the board's rules.

HOA account statement

The record of an owner's account, the charges, payments, and balance period by period, sent to the owner on a schedule and to the title company at a sale.

Also: HOA statement, owner statement

HOA lien

The association's legal claim on a home for unpaid assessments, created by the declaration and, in most states, by statute. It can be recorded and, within limits, foreclosed.

Also: assessment lien

Homeowner portal

The website where an owner sees their own account: the balance, autopay, statements, the community's documents, notices about their home, requests to the office, and votes.

Also: owner portal, resident portal

Late fee

A charge added when an assessment is not paid by its due date. The amount, the grace period, and any interest are set by the governing documents within what state law allows.

Management company

A company the board hires to run the association day to day: collect assessments, pay bills, keep the books, enforce the rules, field owner calls, and prepare the board's packet.

Also: community association manager, CAM

Master policy

The association's insurance on the common elements and, in many condominiums, the buildings themselves. Owners carry their own policy for what the master policy leaves out.

Also: master insurance policy, association insurance

Operating fund

The association's working account: the dues coming in and the recurring costs going out, from landscaping to insurance to the manager's fee.

Proxy vote

A written authorization letting another person vote for an owner at a meeting. A directed proxy says how to vote; a general proxy leaves it to the holder.

Also: proxy, HOA proxy form

Quorum

The minimum number of owners, or share of the votes, that must be present or represented for a meeting to act. Set by the bylaws, with a floor or ceiling in some states.

Rental cap

A limit in the governing documents on how many homes in a community may be rented at once, or for how short a term. It affects owners, buyers, and the community's loan eligibility.

Also: leasing restriction, rental restriction

Resale certificate

The disclosure package an HOA or condo association furnishes when a home in the community is sold: what is owed, what is coming, and the documents that govern the home.

Also: resale package, resale disclosure

Reserve fund

Money set aside, apart from operating cash, to repair and replace the community's major components as they wear out: roofs, paving, elevators, paint.

Also: replacement reserve, reserves

Reserve study

A report that inventories the community's major components, estimates when each will need replacing and what it will cost, and recommends how much to set aside each year.

Rules and regulations

Day-to-day rules the board adopts under the authority of the declaration: pool hours, parking, trash cans, holiday lights. Easier to change than the CC&Rs, and lower in rank.

Self-managed HOA

An association run by its own board without a management company. Directors collect dues, keep the books, send notices, and run meetings themselves, usually with software.

Special assessment

A one-time charge beyond the regular assessment, levied to cover a shortfall or a project the budget and the reserves cannot: a roof, a lawsuit, a storm.

Status letter

Colorado's name for the association's statement of what is owed on a home at sale, furnished under the Colorado Common Interest Ownership Act, with a capped fee.

Also: Colorado status letter

Super lien

In roughly twenty states, a slice of the association's assessment lien that takes priority over the first mortgage, usually a set number of months of assessments.

Violation notice

The letter telling an owner that something about their home breaks a rule, what to fix, and by when. Most states require a notice and a chance to be heard before any fine.

Also: notice of violation, courtesy notice