HOA Boards & Community Managers: A Vital Distinction

When it comes to running an efficient and beneficial homeowner’s association, a clear definition of board responsibilities and those of the property management company is a must. Keeping these roles both separate and clearly defined not only helps the homeowners in the community but also assists both parties in managing the many needs of a large association. If either side is not fulfilling their end of the “bargain”, so to speak, the community will pay the price.

It’s no secret that many communities struggle when trying to define the duties of their board. Oftentimes, associations will inadvertently leave a gap between the responsibilities of their board members and that of the community manager or management company. While this is an understandable mistake, it often results in frustration for the homeowners in the community and leads to lapses and delays in getting important tasks accomplished.

A strong property manager can be the difference between a functioning HOA and an inefficient one, or the difference between a good community and a great one. Still, in order for that property manager to perform their job correctly, it must be properly defined. With that in mind, we’ll review some of the responsibilities of each party, as well as the ways in which community managers can improve a homeowner’s association. We’ll take a look below.

Community Manager Role

For our purposes, we’ll use the term “community manager” or “property manager” to mean the same thing: a paid individual or member of a management company that oversees much of the day-to-day activities and tasks within a homeowner’s association. Depending on the size of the association, this can be a sole point of contact or a larger group of people working for one management company. Regardless of the structure, the role of a community manager or management company remains the same.

The operations of an HOA are often complex, involving no small amount of communication, strategic, executive, and administrative skills. In addition to communicating changes, policies, or other news to residents – often a full-time job in and of itself – property managers must oversee ongoing projects in the community, manage or review the association’s financial situation, and handle any administrative duties related to all these needs.

Essentially any shared space in a community is likely to be the responsibility of the HOA. While the definitions of what constitutes a “shared space” and the HOA’s duties regarding it are set by the board, the actual details regarding how that is carried out are often left to the community manager. In short, while the board provides the structure and strategy, the manager is in charge of executing it.

Day-to-day

The administrative tasks that an association requires can be more detailed than one would think. For larger communities that employ various vendors for tasks such as maintenance, cleaning, landscaping, or security, merely coordinating their schedules and ensuring the businesses’ documentation is up to date can be very time-consuming. Board members would rarely, if ever, have the time and detail for such tasks.

Instead, the community manager will ensure that vendors meet community guidelines and expectations, certify that their insurance is valid and up to date, and process payments or request credits as necessary. If individual tradespeople or workers are employed directly by the HOA, as is the case with some roles like security in larger associations, the community manager is often responsible for monitoring these employees and their performance.

This can make the community manager role a unique hybrid – one-part administrative, one-part traditional manager. Board members, given their typically unpaid nature and part-time status, will not have the time or ability to supervise staff. For associations large enough to require one, a community manager is an absolute necessity.

Still, property or community managers must exist inside the framework that the HOA provides them. While community managers will often be responsible for upholding or explaining rules and guidelines, they are not the individuals who actually set those standards. For that, we’ll take a look at HOA boards.

HOA Boards & Their Members

In many ways, an HOA operates like a traditional business. In that sense, the board and its members function like the executive team. The board determines the policies and standards that the community manager will operate within, and also determines most (if not all) of the most important facets of the community. Some examples are the monthly or quarterly fees for residents, whether or not to hire staff, creating criteria for vendors and hiring them, and maintaining the annual budget.

Each of these responsibilities can single-handedly alter an association, making the board a vital part of any community despite their volunteer status. There are also specific roles within the HOA that each share a piece of the board’s overall duties. Presidents, vice presidents, treasurers, and secretaries all play a role in the overall functionality of the board. The board will also be subject to numerous obligations depending on the location of the HOA and the laws governing them in that specific state or region.

The board will ultimately craft and amend governing documents, oversee the financial health of the HOA, enforce the rules and impose penalties as allowed. The community manager’s involvement in these activities often varies based on the individual HOA and board members.

Boards also have major responsibilities to the homeowners of the association – keeping maintenance fees reasonable and property values as high as possible. The other duties regarding meetings (and minutes of those meetings), staffing, and common area maintenance are all essentially in service of these two ultimate goals. Community managers should also have these overarching goals at the top of their minds when conducting their business.

Boards and Community Managers: A Unique Relationship

Ultimately, a community manager or management company serves at the pleasure of the board that hired them. While managers are often essential for an HOA to run properly, they still have to ensure they’re meeting the board’s objectives and standards in addition to those of the residents. Conversely, the board has to ensure that it has set clear expectations for the community manager so that there is no question as to who has what responsibilities.

Due to this top-down framework, there are some things that a community manager cannot do. While they may assist in financial matters and recommend changes to the budget or association fees, the board must make those ultimate decisions. Similarly, while a manager or management company can send correspondence and letters to residents regarding rules, fines, and the like, only the board can set those regulations.

Similarly, when presiding over potential changes to a homeowner’s property or architecture, the community manager can be of assistance in reviewing the changes, communicating with the homeowner, and similar measures. Still, the ultimate authority on what changes are allowed or disallowed belongs to the board.

The board can opt to delegate some of its authority to the manager, such as duties regarding vendors or hiring. With a trusted and experienced community manager, many HOA boards are able to simplify their lives. Many allow managers to sign checks on the HOA’s behalf (typically with some limitations), hire staff or vendors, or pay employees. This detaches the board from some of the day-to-day affairs of the association and allows them to focus on the bigger picture items and their financial duties. Many associations prefer this arrangement due to that convenience alone.

Regardless of the final structure a board opts to utilize, understanding the roles of each party is essential for an HOA to function efficiently and provide the most value to its members. Homeowners trust their HOA to preserve property values while using their collective maintenance fees prudently. It is up to the board, working hand-in-hand with the community manager, to ensure those goals are obtained. Ensuring each side communicates with the other and has clear objectives set is a great (and essential) first step toward building an ideal HOA.