Frequently Asked Questions About HOA Management

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homeowners assiciation documents | hoa management

Is HOA management hard to grasp? Don’t worry. New homeowners associations may think they need to grope in the dark, but it does not have to be this way. HOAs can learn the answers to the most frequently asked questions about HOA management below.

What Is HOA Management? 

Homeowners association management refers to the governance and management of an HOA community. It is what the HOA board does every day. HOA management entails many responsibilities, including collecting dues, maintaining shared spaces, financial management, and handling insurance.

The HOA board may conduct these activities themselves. But, HOAs that find management difficult may also enlist the help of an HOA management company. The HOA property management company will then conduct many day-to-day operations.

What Do HOA Management Companies Do?

An HOA management company provides HOAs with different services. These usually involve all the responsibilities of the board related to daily operations, administration, and financial management. An HOA management company’s services can include the following:

  • Offering management advice to board members
  • Soliciting vendor bids
  • Conducting community inspections
  • Tracking service and maintenance requests
  • Overseeing repairs and maintenance by vendors
  • Attending and facilitating board meetings
  • Crafting meeting agendas
  • Sending notices of board meetings to residents
  • Taking the minutes of the board meeting
  • Conducting community functions and events
  • Collecting HOA fees and assessments
  • Managing payables and insurance
  • Sending invoices
  • Preparing financial reports and statements
  • Offering legal advice
  • Managing the homeowners associations website

Community association management companies have years of experience managing HOAs. They also have access to many experts HOAs need including financial and legal professionals. Moreover, management companies already have the tools, vendor lists, and documentation HOAs require to run a community.

Are HOA Managers Board Members?

HOA managers and HOA management companies are not board members. They do not make any final decisions on homeowners association matters. The HOA board is still in charge of making these decisions. Meanwhile, the HOA manager is only there to assist and advise. 

For instance, only the HOA board can decide what to do with a homeowner who violates community rules. The HOA management company may send a notice on behalf of the board. But, they cannot decide what punishments and penalties to give out.

Similarly, only the HOA board can approve or deny architectural or maintenance requests. The HOA manager simply receives the request and sends it to the board. 

How Do HOA Management Services Help Communities?

HOA management services have many benefits. They offer more clarity as management companies are well-versed in making community policies easy to follow. This eliminates any miscommunication that might occur between the board and community members.

Management companies are also great at keeping the community informed of rule changes and community events. The HOA board may not always have time to do these tasks. Professional management services are also more consistent. This is because management companies enforce rules consistently without bias toward or against certain members.

In addition, management companies are more knowledgeable about laws and legal matters involving HOAs. For example, they know relevant laws like the Fair Housing Act or Fair Debt Collection Practices Act. With this knowledge, communities are less likely to violate any federal, state, or local laws. 

Moreover, management companies have more expertise and resources. They have access to a diverse range of experts like attorneys, accountants, and property managers to consult with. Also, they have good working relationships with many vendors that HOAs need. 

Are Management Companies Vendors?

Professional management companies are not vendors. This is because vendors usually perform specific services that are time-bound.

Meanwhile, management companies work 24/7 and perform a wider range of tasks. Hence, these companies are more like an extension of the homeowners association. They have the same fiduciary responsibilities as the HOA board. Nonetheless, an HOA management company also does vendor management.

How Much Do HOA Management Services Cost? 

HOA management can be expensive. But, the cost varies per company and is based on the package a homeowners association gets. On average, management fees cost about $10 to $20 per unit monthly.

Some management companies also charge additional fees. For example, many charge initiation and exit fees to cover start-up and ending costs. These cover the cost of transitioning files, bookkeeping, and implementing changes. Often, these fees can cost a few thousand dollars. They can even go over $30,000, depending on the scope of work.

Apart from this, management companies also charge special service fees. For example, let’s say the HOA is only entitled to two meeting attendances from the HOA manager. However, there is an emergency, and the HOA board asks the manager to attend one more meeting. In this case, the company may charge a special service fee.

How Do HOAs Cut Ties With Management Companies?

Professional management companies usually have a termination clause that lists the details of how to terminate the contract early. The process will vary from company to company. However, it generally entails sending a notice to the company of the HOA’s intention.

Homeowners associations must review the contract to know what process to follow. Contracts often dictate how long the notice period for termination should be. It often ranges between 30 to 90 days. Moreover, many contracts impose a termination fee that the HOA must pay. How the management company calculates the fee will also vary.

Can HOAs Sue Management Companies?

Yes, homeowners associations can sue management companies. However, the process will be difficult. Many management agreements include a harmless clause in them. This requires the HOA to indemnify the company from negligence claims that the company conducts on behalf of the HOA.

Hence, the HOA may need to prove that the management company acted in gross negligence or willful misconduct. If the homeowners association can provide evidence, the court may hold the company liable.

Successful Community Management

HOA management can be complex for new homeowners associations. After all, there are lots of responsibilities to undertake. The HOA board must be a master of all trades and have experience in law, finance, administration, and even marketing.

Many board members do not have the expertise to handle all these tasks. As a result, they turn to management companies for help. Is your community looking for a professional management company? Landmark Community Management can help. We cater to all the needs of HOAs around Texas. Contact us today for more information.