Are you a self-managed HOA who wonders what benefit an HOA management company might bring? Or maybe a brand-new board member who’s simply trying to learn everything they can about how HOAs operate?
One question that frequently comes up in our conversations with board members is the role that HOA management companies play in their association’s management.
While board members can theoretically do everything the HOA management company does, it can be difficult when most board members still work, are raising a family, and have vibrant social lives outside of their HOA’s management.
Having the right HOA management company can provide stability and continuity between boards, make the board members’ lives significantly easier, and increase property values and satisfied members
The right HOA management company will be able to understand your association’s unique needs, will know enough to be knowledgeable advisors in regards to the governing documents’ requirements and the federal, state, and local statutes, and will work with homeowners to resolve compliance issues and other owner complaints.
Put simply, most HOAs have both short-term and long-term goals, and having a management company can help you reach those goals more easily and with less stress.
Both the HOA board and the HOA management company have the same goal – a well-run HOA – but the role of both is completely different.
An HOA management company is a company that specializes in helping the boards enforce an HOA’s governing documents and facilitates communication between board members and between board members and their homeowners.
While the HOA management company does not have the board’s authority, it can still act at the board’s behest on nearly all matters. Matters that HOA management companies cannot take action on without the board’s prior consent include anything outlined in your state’s legislature
While each state has its own laws, it’s very typical for states to mandate that only the board has the authority to vote on anything that’s going to change the financial status of the association. Additionally, most states prohibit anything that will change the association’s legal status or liability level. Once the board has made a decision, then it’s the management company’s job to make sure their vision becomes a reality.
Ultimately, the HOA management company does not have the authority to make decisions for the board. Their role is to guide the board in the best way to fulfill their duties, execute the board’s decisions, and keep the association’s records.
What role does the association’s board play with the management company?
While it’s true that the governing documents and the federal, state, and local statutes will dictate the board’s and HOA members’ responsibility to the HOA, the overall role of how a board works with its management company doesn’t change much from state to state.
In order to further understand how the board and management company work together, it may be helpful to take a step back and explain the overall structure of an HOA.
In an HOA, the HOA is run by a group of volunteers who the membership (i.e., the homeowners) select (i.e., the board). The board is responsible for making sure that business items, like billing and amenity and common area maintenance, are taken care of. Another aspect of HOA management is the administration of services, like the collection of dues or arranging for shared services
Ultimately, it’s the board’s job to oversee these functions and make decisions regarding them. Once you set the policy for the HOA, then it’s the HOA management company’s responsibility to enforce.
A well-running HOA has three main members: the board, who manages the HOA, the management company, who enforces the board’s directives, and the homeowners, who make up the community.
While homeowners do not have a direct role in the management of a community, they still have an important role to play. Paying dues on time and following an association’s rules are two things homeowners can do to make the management of the HOA for both the board and management company easier. In order to facilitate the homeowner’s positive participation, look for a management company that communicates frequently and well with the homeowners.
Remember that not all HOA management companies are created equal. Some specialize in certain aspects of HOA management, and some take a broad approach and cover many different areas.
We recommend you sit down as a board and thoroughly discuss what elements of HOA management are most important to you. Knowing what you want your management company to focus on will determine which direction you should go when selecting your HOA management company.