Common Law or Non Profit
There are 2 types of Homeowners Associations(HOA). Non- profit companies and Common Law associations.
A Non Profit Company,previously known under Section 21 of the Companies Act, as association not for gain. This type of structure takes advantage of, and falls under the ambit of the Companies Act. There is a Memorandum Of Incorporation(MOI), giving clarity to the HOA’s external method of operation, dictating how affairs of the HOA are governed and run. In this structure, Directors or Executives are appointed to oversee the daily running and administration of the HOA, and members living in the HOA are required to bind themselves to the rules and regulations that govern the HOA. The MOI also deals with the aappointment of executives, meetings, notices, frequency of AGMS, and various other running tasks.
Conduct Rules are employed to govern the day to day operation of ongoings with the HOA. This give the executives, and members clarity on what they may, and may not do in so far as their, and their tenants conduct
A common Law Association has a more loosely structured format. This type of association creates there own Constitution and rules, which gives structure to the same issues as listed above, being the appointment of executives, meetings, notices, frequency of AGMS, and various other rules, and so on. Common Law associations have trustees and not directors, and do no fall under the rules of the Companies Act.
Members, Executives, and Trustees alike need to bear in mind that it is your responsibility to ensure that your type of Company is run and governed according to how it should be.
Contact us for more information on Companies, and how the various structures differ.