Mixed-use associations have become popular around the United States. They provide a good avenue for people who want a home but value proximity to essential services. While they are undoubtedly convenient, they also come with important considerations. What should residents expect from a mixed use community association? Let’s find out.
What is a Mixed Use Community Association?
A mixed-use community association combines residential and commercial properties in one neighborhood. It often consists of several buildings and outdoor spaces.
There are two main types of mixed-use associations:
- Vertical Mixed-Use Development. A vertical mixed-use development combines residential, commercial, and retail spaces in one building. Public units are often on the ground floor, while private spaces are on the upper floors and units. Private units may include residential units, hotel rooms, and office spaces.
- Horizontal Mixed-Use Development. A horizontal mixed-use development combines a single-use building inside a mixed-use property comprising multiple buildings. The entire development has a variety of uses. The community is larger and more walkable.
Many mixed-use community associations are located in dense urban areas. They offer the ideal environment for people who want their home, work, and recreational spaces in one area.
Structure of a Mixed-Use Community Association
Like other planned communities, the developer of a mixed-use community association will work with a lawyer to create the community’s governing documents. These documents outline the HOA and residents’ responsibilities, perks, and obligations.
Mixed use associations are distinct in that there are varying interests within the community. Residents may want more privacy, while retailers and commercial establishments prefer to be more open to the public. A mixed-use community’s governing documents must protect the interests of all parties.
In many cases, a mixed-use community association will have several sub-associations for the residential and commercial properties. A master association will often govern both, though some communities may create entirely separate associations for either type of property. Some communities also opt for one large association, with either type of property represented in the board of directors.
Regardless of how a mixed-use association is organized, residential and commercial property owners must learn to coexist and strive to achieve the community’s overall goal and vision.
What to Expect Living in a Mixed-Use Community Association
Mixed-use communities come with many considerations. Homeowners should think about the following aspects of mixed-use community living before purchasing a property:
- Limitations in the governing documents and their amendments
- Allocation of expenses for common, limited common, and shared facilities
- Structure and cost of assessments
- Allocation of voting rights
- Individual unit boundaries
- Permitted user controls
- Operation hours and special event abilities
- Management, operation, reconstruction, and maintenance responsibilities
- Dispute resolution processes
- Residential protections for adverse use or deterioration of parcels
Each mixed-use development is different. Hence, it’s essential to thoroughly ask questions about the HOA’s operations and how expenses are divided. Understanding the association’s financial, legal, and social responsibilities is also crucial. These can affect the homeowners’ quality of life and financial investments.
Benefits of Living in a Mixed-Use Community Association
Mixed-use community living has many benefits, including the following:
- Convenience. Mixed-use properties provide many conveniences for the residents. Unit owners can often find laundry facilities, restaurants, fitness centers, and groceries in one area. They no longer need to travel far to access essential items and services.
- Walkability. Mixed-use developments foster a strong sense of community by allowing customers, tenants, residents, and guests to walk to various establishments. Residents are less pressured to purchase a vehicle to reach their destination.
- Economic Development. Mixed-use developments earn money not just through association dues but also through rental income. Both business owners and residents can benefit from this added income source, which offers economic benefits and encourages investment.
- Physical Health. Creating a walkable environment encourages residents to exercise and prioritize their physical health while accessing other establishments.
Challenges of Mixed-Use Community Association Management
How do homeowners associations manage mixed-use community developments? There are several considerations and management challenges involved in mixed-use developments, such as the following:
1. Communication
Communication is required in mixed-use developments. They often schedule regular maintenance and inspection activities to ensure the residents’ quality of life. Moreover, frequent events and gatherings in shared spaces may need to be announced to other occupants.
Landlords must prioritize communication to ensure good relationships with tenants. They must provide constant updates concerning responsibilities, routine maintenance, and rental rules. Otherwise, they may manage numerous emails or calls from residential and commercial occupants.
In addition, they must ensure that all occupants are well-informed about the community’s activities. They must also keep track of vendor expenses, events, lease agreements, accounts, invoices, and rent.
2. Conflicting Needs
Residential tenants or unit owners may sometimes complain about noise, too much foot traffic, and unpleasant odors from the other floors and units. This is one of the biggest challenges when mixing residential and commercial properties, especially if the property is built vertically.
One way to avoid this is to manage the expectations of both parties. For instance, residential owners and tenants may need to know that certain businesses will be open late into the evening. Meanwhile, commercial establishments may need to operate at certain hours to maintain business without disturbing the residents.
3. Maintenance
Many of the lower-floor common areas are open to the public, making maintenance difficult for the development’s management team. Both residential and commercial areas often share mechanical, electrical, and plumbing systems. It’s important for the association to manage these wisely. Otherwise, one party will feel like they are being abused by the other to cover all the maintenance costs.
The board of directors can reduce conflict by establishing a clear maintenance schedule for both areas. They should also create policies outlining the consequences of failure to maintain individual properties and follow through on tenant responsibilities.
In addition, it may help to purchase property management software dedicated to mixed-use properties to manage maintenance schedules, work orders, and other requests. The tenants and residents can see who is in charge of which task and when these tasks will be completed.
4. Parking
Parking is often a big challenge for landlords and management teams. Residents want to be reassured that they have somewhere to park their vehicles. Meanwhile, commercial tenants will wish to have many parking spaces for their staff and customers. They also do not want the residential unit owners to cause any inconvenience to their patrons.
The best way to handle this is to create separate parking spaces for commercial and residential property owners, tenants, and guests. This is especially important for vertical mixed-use developments, which often have shared or one designated parking area.
If the association consists of one building with one parking lot, consider dividing the lot between commercial and residential use. On the other hand, buildings with multi-level parking can dedicate particular floors to commercial use and others to residential use.
In addition, it may be wise to hire parking security guards to prevent conflict. The guards may quickly punish or enforce the rules on violating tenants, guests, customers, and residents.
Tips to Manage a Mixed-Use Community Association
Mixed-use communities can be difficult to operate and manage. Here are some tips to keep in mind to ease tensions and ensure success:
1. Review the Governing Documents
The residents and HOA board members must be familiar with the ins and outs of the governing documents. They must remember that the residential community can only control what they are allowed to do within the development. While the homeowners may file complaints, they must understand that the CC&Rs may be partial to residential or commercial owners.
2. Work Together
Residential and commercial associations must work together to create a harmonious environment. One way to do this is to form a usage committee with representatives from both sides. The usage committee can guide and manage all the logistical issues within the property. It can help develop policies on pest contracts, exterminators, deliveries, and signages.
3. Involve the Commercial and Residential
To build goodwill, commercial establishments can become more involved in the residential community. For example, one of the restaurants can provide catering services to the HOA during the annual meeting. It may also send discounts to the development’s residents to improve the relationship.
4. Fine-Tune Nuisance Provisions
One of the most common complaints in mixed-use associations is the noise and disturbances. Make sure to fine-tune the governing documents’ nuisance provisions so the HOA can act on enforcement. Communities may also rely on these provisions to bolster their case in case of a lawsuit.
Get Professional Help
Managing a mixed-use community association can be difficult. Often, the residential and commercial tenants conflict. Nevertheless, the association provides many benefits and conveniences to the occupants.
Personalized Property Management offers comprehensive mixed-use association management to communities in Southern California. Call us now at 760-325-9500 or request a quote, and we’ll get back to you.
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