Assessment
A fee charged by a homeowners association to cover the cost of maintaining common areas and community amenities. Assessments can be regular monthly or annual fees, or one-time special assessments for specific projects.
Reference
HOA Glossary for Transaction Teams
Clear definitions of the terms you encounter in HOA documents, disclosure packages, and closing files.
CC&Rs
Covenants, Conditions, and Restrictions. The governing document that defines the rules, restrictions, and obligations of property owners within a planned community or condominium.
Estoppel Letter
A document from the HOA or management company confirming the seller's account status, current assessments, any outstanding balances, and pending violations. Also called a resale certificate in some states.
Resale Certificate
A comprehensive package of HOA documents provided to a buyer during a resale transaction. Typically includes financial statements, governing documents, insurance information, and assessment details.
Reserve Study
A long-term financial planning document that analyzes the association's major common area components and estimates the funding needed for future repairs and replacements.
Special Assessment
A one-time fee levied on homeowners to cover unexpected expenses or capital improvements not included in the regular budget. Special assessments can significantly affect property value and buyer decisions.
HOA Lien
A legal claim against a property for unpaid HOA assessments or fines. HOA liens can cloud title and must be resolved before closing.
Master Association
An overarching homeowners association that governs a large planned community containing multiple sub-associations or neighborhoods. Properties in master associations may owe dues to both the master and sub-association.
Self-Managed Association
An HOA that is governed directly by elected board members rather than a professional management company. Self-managed associations may have slower response times but lower fees.
Management Company
A professional third-party firm hired by an HOA board to handle day-to-day operations, including financial management, maintenance coordination, and document requests.
Condo Questionnaire
A standardized form used by lenders to evaluate the financial health and operational status of a condominium association. Required for most condominium financing approvals.
FHA Approval
Federal Housing Administration certification that a condominium project meets specific financial and operational criteria. FHA approval is required for buyers using FHA loans.
Title Insurance
An insurance policy that protects buyers and lenders against defects in title, including undiscovered liens, ownership disputes, and recording errors.
Escrow
A neutral third-party process where funds and documents are held during a real estate transaction until all conditions of the sale are met.
Closing Disclosure
A standardized form provided to buyers at least three days before closing that details the final terms of the loan, closing costs, and all fees including HOA charges.
Transfer Fee
A fee charged by an HOA or management company to process the transfer of ownership and update association records. Transfer fees vary widely by association.
Capital Contribution
A one-time fee charged to new buyers by some associations to fund the reserve account or cover administrative costs of adding a new member.
Rental Cap
A restriction in the governing documents that limits the percentage of units in a community that can be rented at any given time. Rental caps affect investor strategies and cash flow.
Davis-Stirling Act
California's comprehensive law governing common interest developments, including HOA governance, disclosure requirements, and member rights.
Underfunded Reserves
A condition where an association's reserve account contains less than the amount recommended by the reserve study. Underfunded reserves predict future special assessments.