HOA 101: Understanding the Role of the Community Management Company

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Managing a homeowners’ association (HOA) is a significant commitment that takes ample time, knowledge, and energy. A well-run community association doesn’t come easy, and the responsibility can be a lot for a board to handle. That’s why many boards look to professional managers and homeowners' association management companies to help them successfully fulfill their roles, complete requirements, and assist with duties. Read on to learn more about the purpose of a homeowners' association management company and how they can help communities thrive.

What is a Community Management Company?

A community association management company, or homeowners' association management company, is contracted by the board to fulfill duties they cannot carry out. These companies generally administer the association's business affairs and support maintenance, accounting, and other community efforts. The management company takes direction from and reports to the HOA board of directors and doesn't make any major decisions for the community.

What Does an HOA Management Company Do?

While it varies by company, association, and contract, homeowners' association management companies and community association managers can typically help with the following:

ADMINISTRATIVE

Overall operations and administration of the association in accordance with board policies, governing documents, and applicable local, state, and federal laws and regulations
Contract negotiations and oversight
Managing contractors and vendors
Project management
Insurance administration
Assisting in member dispute resolution
Meeting attendance and agenda preparation

MAINTENANCE

Building maintenance
Grounds maintenance
Inspections

FINANCIAL

Preparing and executing the association budget
Managing financial reports
Collecting assessments
Reserve fund analysis
Billing

HOA reserve studies are crucial. Read our ebook, "8 Essential Things You Need to Know About Reserve Funds & Studies," now.

Why Do I Need a Community Management Company?

Associations do have the option to self-manage. Some communities may have residents who are able and willing to dedicate their time and talents to manage the association; however, it's a big undertaking and can be a full-time job. Board members are volunteers, and many have families, careers, or other interests that can prevent them from properly managing the association.

Hiring a professional community management company lightens the board's burden and liability, providing peace of mind for both residents and leaders. Community management companies also offer continuity through access to procedures, personnel, and business equipment. While it comes at a cost, hiring a management company can be a cheaper alternative to other management types and save residents time and effort.

Did you take the leap and hire a community management company? Learn how to succeed with your HOA management company.

How Do I Choose a Community Management Company?

Selecting a homeowners' association management company is a serious decision—the effectiveness of a board is often determined by the type of management they choose. It’s essential to carefully evaluate all options and conduct interviews with potential companies. To make the most of these interviews, and help decide who can best meet the association’s needs, ask the following questions:

What kind of services do you provide?
Are your services flexible?
How much do your services cost?
How are associations billed?
How are your managers educated?
What type of technology do you provide?
How will you communicate with the board?
Do you have additional resources, programs, or partnerships?
How will you add value to the community?
Are you up to date with current HOA regulations and laws?
Do you have the proper licenses, certifications, and insurance?
What truly sets you apart?

Requesting references and asking these key questions will give you a good idea of how the management company operates and how it can enhance your association. Their responses will ensure you choose the best company for the job.

Finding the HOA Management Company That’s Right for Your Community

To learn more about selecting the best homeowners' association management company for your community check out our ebook, “Top Questions to Ask Before Hiring Your Next HOA Management Company.” In it, we identify important questions that will help you discover crucial information to make the right choice for your community.

FAQs

Does an HOA need a management company?

Associations have the option to self-manage, but that can be a very daunting task for boards. Management companies lighten board burdens and liability, providing peace of mind for both residents and leaders.

How to change your HOA management company?

Associations looking to change their management company should discuss the transition with their current management partner and then meticulously explore new options, asking prospective partners questions like: