In a community, the homeowners association (HOA) and the homeowners association manager must work hand-in-hand.
The HOA board oversees the care of common areas, establishes rules and regulations, ensures the safety of its residents, and so on. Meanwhile, the HOA manager assists in the board’s day-to-day operations. Essentially, the HOA board partners with an HOA manager to better serve the community.
While their functions are similar, their responsibilities do not overlap. In fact, the HOA board and the HOA management company complement each other.
If you’re on the fence about hiring an HOA management company for your multi-family property, continue reading. In this article, we’ll discuss in depth everything you need to know about HOA boards and HOA management companies.
What does an HOA board do?
The primary responsibility of the HOA board is to establish and enforce the association’s governing documents, which include the bylaws, CC&Rs (Covenants, Conditions, and Restrictions), and other rules and regulations. The HOA has the authority to reprimand residents who commit violations, such as making too much noise or parking in the wrong places.
In addition, the HOA board oversees the maintenance of shared spaces, such as parks, playgrounds, and community centers. The HOA does this to increase home values and retain the neighborhood’s appeal to prospective homebuyers.
What does an HOA management company do?
Many HOAs hire an HOA management company to assist them with duties that involve decision-making and administrative work. However, it’s worth mentioning that while the HOA manager is meant to lend a helping hand, they are not included in the policy-making process. Simply put, the HOA board makes the rules while the HOA management company simply suggests how they can be improved.
HOA managers act as advisors. For instance, before the association amends a rule, the HOA manager may evaluate the amendment to ensure that it does not go against the law. Similarly, the HOA management company can offer its expertise regarding the association’s finances.
Do you need to hire an HOA management company?
If you own a multi-family rental property, it may be a worthwhile investment to hire an HOA management company. Self-management, especially when you lack the experience, puts you at risk of lawsuits and claims against the association. It is incredibly important to abide by state and federal laws as well as local ordinances. The last thing you want is for your multi-family rental property’s reputation to go downhill.
Here are several reasons why you should consider hiring an HOA management company:
#1 Third-Party Administration
Homeowners don’t like it when an HOA announces an increase in association fees. HOA boards, on the other hand, have a hard time explaining these changes to their members. As an impartial third party, an HOA management company can help enforce these policies without making it look like they’re taking the association’s side. An HOA management company can collect overdue fees without any conflict of interest — they’re just doing what they were told to do.
#2 Vetted Vendor Network
It’s the HOA’s responsibility to maintain the aesthetic appeal of the neighborhood. However, making sure that the landscaping, architecture, etc. are picture-perfect is not an easy task. Sometimes, communities require specialized services that only an HOA management company can provide. This is because HOA management companies have established a network of competent vendors that they can hire at a competitive price.
#3 Legal Expertise
Not all HOA boards have a resident attorney that they can count on for legal advice. Board members are unlikely to be well-versed in the law, either, giving them no choice but to hire an attorney. One of the benefits of hiring an HOA management company is the legal expertise that its community managers have to offer.
#4 Tech Support
If you’re planning on investing in software and systems that streamline the services of your HOA (e.g. collection of fees, announcements, etc.), you should consider hiring an HOA management company. Instead of building a system from scratch, you can simply “borrow” theirs and get it up and running in no time.
#5 Dispute Resolution
The association is run by residents. So, when a resident who is not part of the board commits a violation, settling the issue impartially is impossible to do. This is because that resident is likely friends with at least one member of the board. However, when an HOA management company is called to settle the dispute, they can make sure that the matter is resolved fairly.
How can the HOA board and HOA manager work together?
A common misconception is that an HOA board and an HOA manager can’t work together. However, the board and the management company have distinct roles that are clearly defined in the management agreement contract.
To better distinguish the duties of both parties, here are a few examples to consider:
Example #1 – Fines
The HOA board of directors has the authority to impose fines for violations of the rules and regulations. On the other hand, the HOA management company enforces the association’s policies by processing the fines, sending violation notices, and so on. The HOA manager does not have the authority to waive fines.
Example #2 – Rules
The HOA establishes rules and regulations in the form of covenants, bylaws, and so on. These rules apply to all residents — including the board of directors. The HOA management company is responsible for ensuring that these rules are legal and enforceable. The company should also communicate these rules upon the board’s direction.
Example #3 – Vendor Management
Associations are responsible for maintaining roads, street lights, and the like. The HOA board can request the HOA manager to look for contractors, however, it’s the board that has the final say. The HOA is not allowed to approve a contractor unless their agreement allows them to execute contracts.
The Bottom Line
In general, an HOA management company helps lighten the HOA board’s load. While the HOA board has the duty to delegate and create policies, the HOA manager has the responsibility to enforce the rules and offer advice.
Property owners that are looking to partner with a reputable HOA management company should consider Luxury Property Care. We’ll take the weight off of your shoulders and ensure that your community continues to thrive.