December 14th, 2009

While not every homeowners’ association is identical, most associations in Arizona are either a planned community or a condominium association.  Mesa alone is filled with both planned communities and condominium associations.  These types of communities share many characteristics, but the fundamental difference between the two lies in how the common areas are owned.

Common areas are those areas of a community that every member of the association can access.  Streets, greenbelts, pathways and landscaping are all good examples.  Community pools, parks and clubhouses are also considered common areas.

Residents of a planned community do not own the common areas in their community.  Rather, the HOA creates a non-profit corporation or unincorporated association of owners to hold title to the common areas.  Community members pay association dues to maintain the common areas, but do not have ownership rights.

Residents that belong to a condominium association share ownership of the common areas.  Community members pay dues to maintain the common areas, and own a fraction of each common area.

The practical difference between these two types of associations is that condominium associations are more tightly regulated.  Because there is actual ownership of common areas involved in condominium associations, Arizona law provides greater protections to their members.

People who do not know which type of association they belong to should check their Declaration of Covenants, Conditions and Restrictions (CC&Rs), which should state who owns the common areas.  If an association or corporation owns the common areas, then it is a planned community.  If community members own the common areas, then it is a condominium association.