Glossary of Homeowner Association Terms

Lien is a recorded claim against a property, including Assessment Liens, Judgment Liens, Mechanic’s Liens, and unpaid taxes.

Management Agreement is the contract between an association and management company setting forth the rights and obligations of the parties. These agreements may be “full service” or “financial service” contracts. Some management companies provide more services than others.

Mechanic’s Lien is a right provided by law to individuals and businesses that make improvements to real property and who are not paid. Mechanics include any worker or business that supplies building materials or labor for the construction or improvement of real property.

Meeting of Board. (See Board Meeting.)

Open Meeting Act refers to the Civil Code Section that permits any member of an association to attend board meetings, except when the board adjourns to executive session to consider litigation, matters relating to the formation of contracts with third parties, member discipline, personnel matters, or to meet with a member, upon the member’s request, regarding the member’s payment of assessments.

Operating Rule means a regulation adopted by a board of directors that applies generally to the management and operation of the common interest development or the conduct of the business of the association.

Planned Development means a common interest development other than a condominium or stock cooperative. The common area is often owned by the association, however, it may also be owned in common by the owners of the separate interests. The separate interest is a lot, parcel, area or space, not a unit.

Under California law, in a planned development, each owner of a separate interest is responsible for the repair and maintenance of that separate interest as may be occasioned by the presence of wood destroying organisms (termites and dry rot) unless the CC&Rs indicate otherwise.

Proforma Budget is an annual budget for the association setting forth the estimated revenue and expenses along with a summary of the association’s reserves based upon the most recent reserve study. A copy must be distributed to all association members not less than 30 days nor more than 90 days prior to the beginning of the association’s fiscal year.                    

Proxy is the power granted by one person to another person to vote on behalf of the grantor of the proxy. Voting by mail has made proxies unnecessary.



Free Homeowner Association Board Training Seminars

Michael T. Chulak