What Is a Homeowners Association and How Does It Work in Indiana?

If you live in or are considering purchasing a home in a planned community, you may be
subject to the rules of a homeowners association.

What Is a Homeowners Association?

A homeowners association (HOA) is an organization that oversees and enforces the
rules for a residential community such as a subdivision, planned development, or
townhome complex. When you purchase a home in a community governed by an HOA,
you automatically become a member of the association and must follow its rules and
pay its required fees. HOAs help maintain community standards, protect property
values, and manage common areas and amenities.

How HOAs Are Structured in Indiana

In Indiana, homeowners associations (HOAs) are usually organized as nonprofit
corporations and are governed by the Indiana Homeowners Association Act. An HOA’s
authority comes from its governing documents, which generally include the articles of
incorporation, the bylaws, and the declaration of covenants, conditions, and restrictions,
commonly referred to as the CC&Rs. The CC&Rs are recorded with the county
recorder’s office and become part of the property, meaning they apply not only to the
original owner but also all future owners of the property.

The Role of the Board of Directors

An HOA is managed by a board of directors elected by the homeowners in the
community. The board is responsible for enforcing the HOA’s rules, managing the
association’s finances, maintaining common areas, and making decisions on behalf of
the community. Board members have a fiduciary duty to act in good faith and in the best
interests of the community. Some HOAs hire professional property management
companies to handle daily operations, but the board remains responsible for making
final decisions on behalf of the association.

Assessments and Fees

HOA members must pay regular assessments, usually monthly or annually, to cover the
association’s operating costs. These expenses typically include maintenance of
common areas, landscaping, insurance, and setting aside funds for future repairs. The
board may also impose special assessments for unexpected expenses or major
improvement projects. Regular assessment amounts are generally determined by the
board through the annual budget and are based on the association’s expected
expenses. If a homeowner does not pay HOA assessments, the HOA may charge late
fees and interest. In some cases, the HOA may also place a lien on the homeowner’s
property.

If you have questions about your rights or obligations as a member of a homeowners
association, the real estate attorneys at McNeelyLaw LLP can help. Contact us today by
calling (317)825-5110.

This McNeelyLaw LLP publication should not be construed as legal advice or legal opinion on
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.