Article Courtesy of Realty Biz News
By Jamie Richardson
Published September 10, 2020
Most people mistake a homeowners’ association, also known as
HOA, to be the same as an HOA management company. While HOA is simply an
association of volunteer homeowners with the primary purpose of attending to the
community’s needs and wants, an HOA management company specializes in offering
professional community management.
To properly define these roles and responsibilities of HOA management companies,
this article will address three major things you need to know about such
1. The Accounting Role
All HOA management companies have an accounting section that works for the
homeowners’ association. These financial-related roles are duties that the
homeowners may not have the time to perform. They include the following:
HOA management companies are often saddled with the
responsibility of collecting dues from the community members on behalf of the
HOA. It should be noted that the management companies don’t hold on to these
monies; rather, they place the collected amount into the association’s account.
Aside from collecting dues, they also perform other financial activities such as
conducting business utilities for community members. The HOA performs this duty
on behalf of the homeowners’ board of directors, transacted with total
transparency at that.
Organizing Financial Reports:
The HOA management company could also be tasked to prepare
financial reports for the board of directors. The release of these financial
reports could have a set periodic schedule, like a weekly, monthly, or
bi-monthly arrangement, depending on what was agreed upon with the board. These
financial reports enable the homeowners’ boards to be well aware of the current
financial state of their association.
The report usually covers all financial engagements of the association,
including the monthly income of staff, expenditures, excess, and reserves. Such
reports could also be cascaded to the rest of the homeowners as well, for their
Whenever there’s a situation that involves drawing up
documents for properties to be sold or leased within the association, it will be
the official duty of an HOA management company like AMS Northwest to present
this property document to the new homeowners. By acting as escrows, they could
assist in ensuring transparency between the new homebuyers and the homeowners’
2. The Administrative Role
The operation system of HOA management companies requires them to perform
certain administrative duties to ensure the smooth management and facilitation
of the homeowners’ association. For this reason, they employ the services of a
manager who’s an expert in discharging administrative duties. The manager is
tasked with overseeing the various spheres of work that come with HOA
Furthermore, the manager also becomes the primary contact person between the HOA
and the community who could help facilitate smoother communication between the
homeowners’ association and the HOA management company, thus minimizing
conflicts or misunderstandings. However, it’s impossible for the manager to
carry out all the administrative responsibilities alone. That’s why most HOA
companies usually build a team of highly skilled people in communication and
To clearly outline what they’re up against, here’s a quick peek into the
administrative roles of an HOA management team:
Facilitating Board Meetings:
Board meetings are an important necessity for most
communities. They’re not optional because it helps establish a good working
relationship between the HOAs and the HOA management company. The meetings
usually involve representatives of the HOAs and the representative of HOA
management company. Thus, the company organizes, executes, and carries out these
board meetings by delegating a team member to fix the meeting day and have board
members confirm their availability.
Organizing these meetings ensure that there’s proper communication among the
parties involved within the community. It also prevents misunderstandings and
allows for conflict resolution, if needed. It’s at such meetings that board
members plan progressive actions and map out blueprints to follow.
Also, the HOA management oversees proper documentation of what happens at each
board meeting with an emphasis on conclusions agreed on by board members for
record-keeping and reference purposes. This job is usually done by the secretary
of the HOA management company.
It’s important to note that, before employing an HOA
management company, most homeowners associations have certain expectations from
the HOA management company. The standard way to let the HOAs know that they’re
getting value for the money is to receive periodic management reports. Thus, one
crucial responsibility of an HOA management company is to provide the
association with an adequate report of the projects at hand, as well as all the
activities of the company.
These progress reports could be drawn up weekly, monthly, or quarterly,
depending on the pre-agreed pattern between the company and the association. The
report doesn’t have to be given during board meetings, though, as that may
prolong the meeting’s duration. Rather, it can be delivered via mail to board
members before the scheduled meeting so each member could allot adequate time to
browse through the reports and table their feedback during the meeting.
Enforcement Of Communal Rules And Regulation:
Perhaps it’s in the intrinsic nature of humans to
occasionally want to break the rules. This is actually the reason why
communities form homeowners’ associations; when they come together as a body,
every homeowner who’s an association member would be mandated to follow certain
rules. These regulations are often drawn up in agreement by the association
members for the progress and protection of their community.
However, despite the association’s efforts, it’s not uncommon to find some
members unrepentantly breaking such bylaws. This is where HOA management
companies enter the picture—they could help enforce these communal rules of the
association. To do this peacefully, they need to make sure that they develop
good relations with every community member. In addition, they should also employ
managerial strategies that would encourage association members to comply with
the stated rules and obligations.
Preparation Of Budgets:
Preparing a budget has never been an easy task to undertake.
There are too many variables to consider in the process, especially if a
homeowners’ association has to deal with various activities and juxtapose these
with differing personalities of board members and association members. For this
reason, this task becomes one of the most crucial roles that they could delegate
to their hired HOA management company.
In addition, most HOAs prefer to have an annual budget done to give them a
definite estimated figure of what they’re expected to contribute within a
specific timeframe. Since the association assigns the responsibility of
preparing an articulate budget to an HOA management company, the company should
always have a financial management expert as part of their team. This person
will be in charge of preparing the necessary budgets to ensure that nothing will
be overlooked or under appraised.
3. The Site Management Role
The end goal of any good site management leader is to increase the overall value
of the properties they’re managing. In other words, excellent site management
practice is necessary to ensure that a community’s value over time is on the
increase and not on the decrease. For this reason, homeowners’ associations
employ the services of an HOA management company to implement practices that
will continually increase the overall market value of their homes. The aim is to
make your home environment a place that will always interest homebuyers.
Due to this objective, site management became a very important aspect to focus
on, and any respectable HOA management company will offer well-trained site
managers that work around the clock to optimize the values of the homes within
Generally, some of the practices of an experienced site manager include but
aren’t limited to the following:
Site managers move around the homes to see what needs to be
repaired or improved within specific common areas and the overall vicinity.
Their duties also include facilitating the routine servicing and cleaning of
their community’s environment.
This step is undeniably crucial for site management as home buildings break down
over time, especially when there could be accumulated construction problems such
as leaking roofs and blocked sewage systems if left unchecked and unrepaired.
It’s the HOA management company’s responsibility to watch out for and correct
these errors before they become reasons that will reduce the overall market
value of the homes owned by the association.
Coordinates Ethical Environmental Practices:
One major way that HOA management companies enact their site
management role is through planning and coordinating basic upkeep practices
within the community. This move ensures that the homes of the association’s
members remain safe, marketable, and inviting, which enables the homes to retain
their market value.
These environmental practices that an HOA management company oversees are always
in cooperation with the homeowners themselves. For example, the company makes
sure that the homeowners maintain their lawns and areas around their respective
property or follow the HOA specifications regarding building maintenance and
construction guidelines. Other practices that the company enacts include
overseeing pool services and waste disposal monitoring, to name a few.
By outlining some of the essential things you need to know about what an HOA
management company is all about, like the varied roles they play and tasks they
could do for a community, it’s undeniable that these types of management
companies could provide and infuse professionalism to an HOA’s managerial and
With this knowledge firmly in place, you should encourage your HOA to consider
hiring a good and reputable HOA management company to ensure your community’s
optimum growth and seamless operation.