While the terms HOA and condominium law are seemingly interchangeable to most people in NH, there is a significant distinction between the two. However, that distinction may soon be without a difference. Up until now, condominiums were controlled by the Condominium Act in New Hampshire, otherwise known as RSA 356-B.
Who is covered by the Condominium Act
All condominium developments, large or small, were controlled by the Act. However, homeowners associations (HOAs) do not currently fall under the Condominium Act. Instead, they are generally organized as voluntary associations under RSA 292. While the condominium law involves every aspect of governing a community, individual ownership is usually limited to the interior of the unit. The HOA merely manages amenities within the community that is shared by all.
The Basic Difference
In NH, one of the prime examples is waterfront property. Here, every owner has access and some level of rights to use the beach, docks, pool, and the boathouse. Each owner within the HOA owns their home and is responsible for maintaining the interior and yard at their own expense. As opposed to a condominium where the Board of Directors controls all aspects of maintenance, upkeep, and repair of the common areas. This is not to say that one is better than the other, but the HOA had few restrictions and little government intervention. This looks like it is about to change in 2020.
I recently reviewed legislation in NH that would result in a new section of the Condominium Act. This section would control not only the development, but also the control of the HOA form ownership. Now, I am not one to favor government control, and believe that the current legislation will place restrictive requirements on the HOA. More specifically, the legislation will restrict the ability of owners and place obligations relating to financial disclosures and operation of the HOA , resulting in higher annual assessments to achieve compliance.
No doubt this will benefit lawyers, of which I am one, as we anticipate the new needs of HOAs to draft governing documents, issue legal opinions and litigation, but is it really necessary? Regardless, the legislation is likely to pass in some form within the next legislative session. At this point, it’s unclear whether the HOA addition to the condominium law will be retroactive or affect existing HOA developments.
For my money, it will. When it does and your HOA has questions, our firm is here to assist. Representing condominiums and homeowner’s associations throughout New Hampshire and Northern Massachusetts, our team has years of experience to understand your needs and requirements. Contact us at Feniger & Uliasz, LLP, by phone 603-627-5997 or visit our website at fenigeranduliasz.com. We look forward to hearing from you.