Creation of HOAs and COAs in Indiana

Homeowners Associations (HOAs) and Associations of Co-Owners, often called Condominium Owners Associations (COAs), are common in the state of Indiana and around the nation. The difference between the two is relatively self-explanatory. HOAs are for homeowners who own their lot and homes. An HOA manages regulations concerning the residential side of a community, along with the common areas such as pools and playgrounds. Membership is sometimes required depending on the location. In contrast, a COA is comprised of condominium owners. Unlike HOA fees, COA fees will also cover building repairs and maintenance, along with the common areas and the like.

There are many perceived benefits of being a member of either an HOA or a COA, hence their popularity. Among the various benefits are well-maintained common areas and amenities, increased community engagement, and, most importantly, helping maintain property values. Being a part of either association can make home and condominium owners subject to certain usage and aesthetic restrictions, which results in homes and condominiums being taken care of and well-maintained. In Indiana, the main laws regarding HOAs and COAs are found in Indiana Code articles 32-25.5 and 32-25 respectively. The law governing HOAs is also known as the Indiana Homeowners Association Act, which oversees the formulation, management, and operation of HOAs.

It is important to know that not all HOAs are bound by the Act, which took effect on July 1, 2009. In short, any HOA created after June 30, 2009, that is authorized to impose mandatory dues on its members, is automatically bound by the Act, while an HOA created before that date can become subject to the Act if its members vote accordingly. The Act does not establish how to create an HOA; however, it lays the foundation of what an HOA can and must do. This includes maintaining records such as a current roster of all members of the association, the mailing address of each member, and the emails of the members. The Act also includes a provision allowing members of an HOA to demand that the HOA’s board of directors hold a special meeting if at least 10% of the members submit a proper request.

While many HOAs are created at the time a new neighborhood is being built, any resident of a designated residential area is able to start one with neighborhood support. Often times, the first decision is to determine whether membership of the HOA is mandatory or not. That decision is made by asking fellow residents about their thoughts about joining an HOA and getting a feel for the neighborhood. Sometimes, starting out as not mandatory can help gain interest without too much of a push toward joining. While not required, many HOAs are established as corporations, which come with additional rules and regulations.

If you are interested in starting an HOA in your neighborhood, you should consult with an experienced real estate attorney to help guide you through the process and avoid hidden legal pitfalls.

This McNeelyLaw LLP publication should not be construed as legal advice or legal opinion of any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.