HOA Glossary

Plain-English definitions of the HOA terms that show up in California disclosure packets, board meetings, and listings.

If you are reading a California HOA disclosure packet for the first time, half the document looks like a foreign language. Here are the terms that come up most often. Definitions are written for owners and buyers, not lawyers.

Governance and structure

Common Interest Development (CID): The umbrella legal category for HOA-governed properties in California. Covers condos, planned developments, stock co-ops, and community apartment projects.
Association: The nonprofit corporation that owns and manages the common areas and enforces the governing documents. Every owner is automatically a member.
Board of Directors: The elected owners who govern the association. They hire the manager, adopt the budget, set the rules, and oversee maintenance.
CC&Rs (Covenants, Conditions and Restrictions): The recorded document that defines the rules of the community, owner obligations, and architectural standards. Runs with the land. Hard to amend.
Bylaws: The internal rulebook for how the association operates. Covers board terms, quorum, voting, and meeting procedures.
Operating Rules: Day-to-day rules adopted by the board. Easier to change than CC&Rs.
Governing Documents: Collective term for CC&Rs, Articles, Bylaws, Operating Rules, and Board Resolutions.

Money

Regular Assessment: Monthly or quarterly dues every owner pays. Funds the operating budget and reserve contributions.
Special Assessment: A one-time charge to cover a specific shortfall or capital project. Subject to limits in California Civil Code.
Reserves: A separate fund the association builds up over time to pay for major repairs and replacements like roofs, paint, asphalt, and elevators.
Reserve Study: A required forecast of major components, their remaining useful life, and the funding needed to replace them. California requires associations to update it on a regular cycle.
Funded Percentage: How well the reserves are funded against what the reserve study says they should be. Anything under 50 percent should make a buyer ask hard questions.
Operating Budget: The current year revenue and expense plan, distributed to owners annually.
Audit, Review, Compilation: Three different levels of financial scrutiny. Audits are the most rigorous. California has thresholds that determine which is required.

Meetings and elections

Open Meeting Act: The Davis-Stirling provisions that require boards to meet in the open with notice and agenda, except for narrow closed-session topics.
Executive Session: The closed portion of a board meeting. Limited to litigation, contracts, member discipline, personnel, and a few other topics.
Quorum: The minimum number of members needed to take action. Different for board meetings, member meetings, and elections.
Inspector of Elections: The neutral third party who runs HOA elections in California. Required by Civil Code.
Secret Ballot: California requires HOA elections to use double-envelope secret ballots.

Buying and selling

Disclosure Packet: The stack of documents the seller delivers to a buyer in an HOA sale. Includes CC&Rs, Bylaws, Rules, financials, reserve study, current budget, minutes, insurance, pending litigation disclosures, and more. Required by Civil Code.
Estoppel or HOA Demand: A statement from the association at closing showing the assessments owed, any delinquencies, and any liens.
Transfer Fee: A fee charged by the association or its manager when a unit sells. Disclosed up front under California law.
Right of First Refusal: A clause in some CC&Rs allowing the association to match an outside offer before a sale closes. Less common today.

Operations

Community Manager: The professional who runs day-to-day operations, often credentialed through CACM. Reports to the board.
Management Company: The firm that employs the manager. Bills the association for services on a contract.
Architectural Review Committee (ARC): The body that reviews owner requests for exterior changes. Sometimes the board itself, sometimes a separate committee.
Common Area: Property owned by the association rather than individual owners. Examples: pools, lobbies, hallways, roofs, landscaping.
Exclusive Use Common Area: Common area that one owner has the exclusive right to use, like a designated parking space or balcony.
Limited Common Element: A condominium-specific term similar to exclusive use common area.

Source

Many of these definitions are adapted from terminology used in the CACM Basics of Association Management glossary, with original explanations written for buyers and sellers rather than industry professionals.

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If you are reading a disclosure packet right now and one of these terms is buried in something that looks important, send it over. We will tell you whether it should change your decision.

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