Rules and Expectations of Managers and HOA Boards of Directors
If you have never owned a home that has a governing homeowners association (HOA), it can be difficult to sort out who does what. This article will explain the rules and expectations for each group to give you a clearer understanding of the relationship between residents, HOAs and management companies.
​
What's the difference between the HOA board and the management company?
The HOA board and the HOA management company are two separate entities. The homeowners’ association board is comprised of elected volunteers who own property in the community and usually live there. The HOA management company is an outside vendor contracted by the homeowners’ association.
​
The Role of the HOA Board
The homeowners’ association board has two main duties:
-
Acts a fiduciary for the non-profit homeowners' association corporation
This means that they're entrusted with making the decisions that affect the values of the properties in the community. One of the board's primary responsibilities is to protect, preserve, and enhance the value of the physical property governed by the community association.
-
Facilitates the enjoyment of the community
This involves setting the rules and regulations for residential conduct, including usage of common spaces, landscaping standards, and anything else that affects the overall residential environment of a community.
​
The Role of the HOA Management Company
As mentioned above, the management company is a vendor, hired by the HOA board. They act as agents of the HOA corporation. The management company is a fiduciary and has two core duties:
-
Provides helpful business advice
As experts regarding the laws that affect property values in a particular area, HOA management companies offer unbiased direction and recommendations to help homeowners associations make the most prudent and effective decisions to preserve and enhance the value of the property.
-
Implements the direction of the HOA board and facilitates day to day operations in the community
While the HOA board establishes the rules for the community, the management company implements the rules. This can range from issuing notices to homeowners for minor infractions to acquiring independent bids for service providers that affect the community. The management company does not have the final say in how rules are written; they simply ensure that residents follow the HOA regulations and HOAs follow legal regulations.
​
What can a homeowner expect from their HOA board?
Members of the board are elected volunteers who should act in the best interest of the homeowners' association, no matter their private opinion or personal bias. In addition, board members are expected to:
-
Act in a fair and consistent manner
-
Refrain from voting on issues or making decisions that present a conflict of interest
-
Maintain confidentiality
-
Treat homeowners and other board members with respect during discussions and throughout any dispute resolution
What can the board expect from the HOA management company?
The HOA management company does not establish any rules or regulations for a community. Their role is to implement the guidelines set by the HOA. They will simply act upon the rules that the HOA sets. The services provided by an unbiased management company ensure that the HOA is working in accordance with the state and national laws that protect homeowners.
​
How do management companies help the board?
The management company is the board's closest and most trusted business relationship. They always have the best interest of the HOA top of mind and are always working to protect and increase property values in the community. They do this by implementing HOA management resources such as:
-
Making sure the community common area looks great
-
Making sure the corporations liability exposure is low
-
Ensuring that the community manager working with the board is the right fit to provide outstanding service to the community
-
Helping to build a sense of community
-
Providing ongoing training and support for their community manager
Facilitating the right fit between HOA and management company
One of the most common reasons that friction arises between a homeowners' association and the management company is because the community manager (the management company employee who acts as a liaison to the HOA board) is simply not the right fit for the community. This can happen for a number of reasons, from personal to professional, but the most efficient way to handle this is to work with the management company to resolve the issue. HOA boards should ask the management company to address the issue or assign a new manager who is a better fit for the needs of the community.
​
Homeowners’ association boards and management companies have two completely different roles in managing a community. By better understanding who does what, residents can address their concerns with the appropriate party and avoid any confusion about how each party supports the other.