A Complete Guide to Forming a Condo Association

image of condo association board members in meeting

Did you know that at least 73 million people in the US reside in condominium communities or homeowners associations? These associations are essential for providing maintenance, upgrades, and security for their communities. They're also the reason most condo buildings are thriving communities that people enjoy living in.

It can be overwhelming to get started when you're looking to form a condo association for your condo community. Many pitfalls can happen if you don't understand what a condo association is all about and where you need to begin.

You can start the process by reading this guide to learn about starting a condo association for your community!

What Is a Condo Association?

A condo association is a legal entity that governs a community of condominiums, and owning a condo automatically makes the owner a condo association member.

Usually, the original condo developer will file a declaration of Covenants, Conditions, and Restrictions or CC&Rs. This document typically establishes a condo association's authority to control the property, resolve disputes, and collect dues.

Sometimes an article of incorporation is also filed if the association is to act as a corporation. Either way, in most states, condo associations are considered a legal entity regardless, even if nothing is officially on file.

Compared to a homeowners association, where each member owns their own property and lot, condo association members own their own individual units. They also have a joint ownership stake in the lobby and public community areas.

Condo associations follow state laws and have the ability to:

  • Enforce rules and regulations
  • Collect fees from condo owners
  • Put liens on condos if owners fall behind on fees
  • Take care of maintenance and repairs of common areas

Condo associations also have elected board members and sometimes hire a condo management company to oversee the property's daily operations. They're also responsible for setting up specific rules and regulations for the entire community to follow.

Board Structure for a Condo Association

A condo association will elect board members who are responsible for governing the association. The condo association board members have specific tasks such as:

  • Hiring and firing employees
  • Maintenance
  • Making legal decisions
  • Appointing committees
  • Applying penalties for rule violations
  • Deciding on insurance coverage
  • Planning for future building repairs
  • Establishing monthly condo association fees

Typically the board structure includes:


The board president handles daily operations, presides over all meetings, and acts as the main representative for the condo association. 

Vice President

The vice president will step into the president's role whenever they are unable to fulfill their duties for any period of time.


A secretary keeps meeting minutes, records votes, and keeps track of the association records. They'll also notify condo owners of upcoming meetings and ensure all documents are kept up to date.


The treasurer manages all the financial matters of the association. They'll distribute and receive funds on behalf of the condo association. They'll also be responsible for signing any checks and preparing the annual budget.

Steps to Forming a Condo Association

Now that you understand more about the basics of a condo association, you can move on to forming the association.

It's best to start by focusing on getting the general structure of the association set up first and electing board members. The easiest way to do this is to hold an initial meeting to make sure the basics are taken care of.

Schedule the First Meeting

Once the condo association is formed, you'll need to start the process of creating a governing board and addressing tax and legal issues. A list of items to cover in your first meeting includes:

  • Hold an election to choose the governing board members
  • Obtain a tax identification number to identify the association for tax purposes
  • Open bank accounts
  • Establish condo management and hire employees

Everybody who lives in the condo community is responsible for paying monthly condo association fees. These fees pay for services like building maintenance, amenities, and security.

You'll need to establish these monthly condo fees and determine a collection procedure. Many condo associations now use online payment systems that allow residents to pay their fees online. This allows you to easily keep track of all payments and apply late fees automatically.

Set the Rules and Regulations

The next thing you need to do is agree upon a set of rules and regulations the community has to follow. Condo association rules and regulations are typically based on common property and maintenance issues such as:

Usage of Common Areas

You'll need to decide on a set of rules for the use of common areas in your community. Make sure to cover the usage of lawns and walkways. You'll want to prohibit owners from obstructing walkways or entryways with bicycles or personal property.

It's also important to set a maintenance schedule for things like lawn care, snow removal, and general cleaning up of all the common areas.

Usage of Recreational Areas

Many condo complexes have recreational areas for younger kids and teenagers. You'll need to ensure the use of these areas is limited to certain times of the day. It's also important that the recreational areas are safe for children and there is no potentially dangerous equipment.

Also, condo associations don't often allow residents to barbecue on their balconies, so you'll need to decide if a shared recreational area for barbecuing is the better option for your community.

Pets and Other Animals 

Condo associations can limit the number of pets residents have or even ban certain types of pets from the community. Also, many condo associations don't allow the breeding or raising of animals on the property.

You can start with deciding on what types of pets are allowed and how many can live in each unit at a time. It's also important to implement rules on how residents must keep their pets. These usually include keeping pets on a leash and cleaning up their waste from the ground.

Loud Noises

Any loud noises or disturbances that disturb the peace of other condo owners need to be taken seriously and dealt with immediately.

So, it's a good idea to address unreasonable and loud noises coming from units throughout the day. You can consider a rule that prohibits loud music or other noise from 11 pm to 7 am and all day on Sundays.

Garbage Disposal

It's also essential to address how unit owners need to dispose of their trash. Most condo buildings have a garbage chute system, so many condo associations require unit owners to dispose of their trash this way.

A garbage chute is a long vertical space that passes through each floor and drops into a dumpster at the bottom. Though a chute system creates easy trash removal for a condo unit, it can get blocked if residents don't use it properly.

You'll need to post rules on proper garbage chute use to ensure that unit owners take large items like cardboard, packaging, appliances, or broken furniture down to the trash. 

Buy Condo Association Insurance

Another important step in forming a condo association is getting the right type of insurance coverage. Condo association insurance policies are necessary for condo associations to cover costs resulting from lawsuits.

Condo association insurance deals with the general common areas of the building and provides both liability and property coverage. Condo insurance can also cover a wide range of situations, and you'll easily be able to find common types of coverage that include:

General Liability Insurance

General liability insurance is one of the most important types of condo policies you can have for your condo association. This type of insurance covers the cost of any lawsuits that result from an accident that occurs inside the building, such as:

  • Slip and fall accidents during repair work
  • Lawsuits for failure to provide adequate security for condo owners
  • Lawsuits resulting from accidents in shared spaces like a pool or fitness center

Worker's Comp Insurance

Worker's comp insurance will cover you if a worker or volunteer gets injured while working for your condo association. This type of insurance will cover the costs of injuries, illnesses, and disabilities that may occur.

Single Entity Coverage

This coverage will cover the individual condo unit finishes but does not cover any of the owner's personal property. It also doesn't cover any upgrades an owner makes to a unit, like countertops or floors.

Fidelity Liability

This insurance will cover any costs that result from the embezzlement or theft of money from the condo association from another board member.

Get Insurance for Your Condo Association Today

Remember, one of the most important steps to forming a condo association is ensuring you have the right insurance coverage.

It's time to turn to Hummel Group for your insurance needs. We've been in business since 1957 and will work hard to find you the best insurance solutions. We work to build relationships with our clients and will keep taking the time to listen to your needs and concerns.

Make sure you contact us today to discuss what insurance options will work best for your condo association!