When you live in a planned community governed by a homeowners’ association, you have to follow a set of rules and policies set by it. But in some cases, residents are also part of a master association. But what does this exactly mean, and what should homeowners expect when they have one?
What is a Master Association?
In simpler terms, a master association is a bigger community association that oversees multiple other smaller associations. It usually governs developments that include multiple communities and neighborhoods.
This type of association is usually responsible for areas and services that the sub-associations would use, and that would benefit all the communities.
Because of this structure, a resident may find themselves a part of a master association and a smaller HOA simultaneously. In this case, the larger association handles community-wide matters. Meanwhile, the smaller HOA focuses on issues that only affect that residential section.
You can commonly see this structure for larger developments. Having an umbrella association alongside smaller ones makes day-to-day operations easier to manage.
Why Do Master Associations Exist?
This type of community association exists because larger planned communities exist. These areas are made up of smaller neighborhoods, and they would need a single organization to handle their shared interests. Without this structure, the smaller HOAs will need to coordinate separately on costs and long-term planning.
The arrangement is most useful when several neighborhoods share the same community identity. Having a master association keeps everything well-organized and consistent.
Master Association vs HOA: What’s the Difference?
The main difference between the two organizations is the scope of their responsibilities or jurisdiction. A regular homeowners’ association usually manages only one neighborhood or a specific group of homes. Meanwhile, a master association manages a large development comprising multiple communities.
HOAs usually focus their operations on neighborhood-level matters. These may include anything from enforcing rules for a specific group of people to maintaining the neighborhood. Meanwhile, the master association would usually handle all matters for the multiple communities under it, which made things more complex.
What Does a Master Association Manage?
What are the roles of masters assocations for the sub-communities they manage? For most of them, you’ll find they’re pretty similar to the role of a regular HOA that isn’t part of a larger association. The only difference is how many neighborhoods they will need to handle.
Here are some of their most common responsibilities:
- Rules Enforcement: Master associations are responsible for establishing the rules in a large development. Some of these rules may include standards for the home
- Maintenance of Common Areas and Shared Amenities: If a large development has several common amenities and areas, it’s usually the master association’s responsibility to maintain them.
- Community-wide Finances: This association oversees the entire development community’s finances, ensuring they are used properly and for the good of all neighborhoods. These obligations would include financial management and reporting.
Pros and Cons of Master Associations
Like with everything else, you may find that living under a master association has both benefits and drawbacks. Here are some that you should know about.
The Pros
Here are some of the possible benefits you may reap when you have a master association:
- Better Coordination and Communication With Other Sub-HOAs: By having an encompassing organization manage your community, every sub-neighborhood in the area will be able to stay organized and coordinate effectively. After all, this association’s main goal is to ensure that all smaller HOAs work together in synergy to help each other thrive. Additionally, this would help minimize potential misunderstandings and disputes among smaller neighborhoods.
- Centralized Management of Shared Amenities: Master associations will be responsible for the upkeep and management of shared areas and elements, including pools, clubhouses, playgrounds, and roads. Doing so would mean that every neighborhood would receive uniform treatment. It also helps lessen the workload of the smaller HOAs’ board members.
Of course, there are also some drawbacks to having this type of setup. Here are some of them:
- Higher or Two Separate Fees: Since two different but connected associations are teaming up to handle everyday matters, residents in such communities would have to pay higher fees or two separate fees. Members who are experiencing financial difficulties may struggle to keep up with two separate payments.
- Smaller Communities Have Less Autonomy: Because they are managed by a larger association, smaller neighborhoods may feel they have less autonomy. They may think they don’t have a say in decisions for their smaller neighborhood, especially if their ideas clash with the master association. For many, this could be frustrating.
What is a Master Association Fee?
Similar to typical HOA dues, a master association fee is the assessment paid by a homeowner to the organization. The fees support the daily operations of that association. Funds from these fees are used to cover all community-related expenses the association may incur.
In many cases, this fee is not included in the smaller HOA’s regular assessment breakdown. Instead, it’s usually charged separately. However, in some communities, the master association would have the smaller HOAs collect the fees along with their separate HOA fees. The smaller association would then pass the funds along to the larger organization.
The amount a homeowner pays for this type of association will still vary by location. The state of your community and the extent of the services will determine the expenses the association needs and, consequently, the fees it would charge.
Do Homeowners Pay Two Association Fees?
In some cases, they do. Residents would have to pay both the regular HOA assessments and the master association’s fee. Of course, this only happens if they live in an HOA that’s part of a bigger planned community.
This setup can be confusing for potential buyers who are not familiar with the way these developments are handled. Before they can buy a property, these prospective homeowners should first confirm how many associations they would need to deal with and how each fee is billed.
Centralized Governance
A master association helps large communities manage shared amenities, common areas, and community-wide responsibilities. Once homeowners understand the difference between this and their neighborhood HOA, it becomes easier to follow the rules, pay the right fees, and know where to ask for help.
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