Whether you’re a part of your community’s Homeowners Association (HOA) or are about to join one (or even start one), you’ve probably asked yourself: “What does an HOA management company do?”
This is actually a very common question and it isn’t surprising that most people don’t know the difference between a Homeowner’s Association management company and the HOA itself.
After all, both parties share the same goals: community building and the business operations that come with it.
HOA vs. HOA Management: Who’s Who?
The Homeowners Association is run by a Board of Directors who are members of the community. They’re always a group of volunteers, though in most communities they’re also elected by the homeowners.
While they should have some knowledge and expertise in the functions of an HOA, fulfilling those roles isn’t their fulltime job.
Homeowners Association management, on the other hand, is a professional third-party company that the HOA hires.
At Aquity Management Group, we like to put it this way: as an HOA management company, we’re here to play the role of the action-taker while the HOA remains the final decision-maker.
What Does the HOA Do?
Federal, state, and local laws have a huge role to play in defining what a Homeowner’s Association needs to do. They’ll also determine those roles as defined in your community’s governing documents. But there’s enough commonality to give a good overview of what an HOA does, even if some of the details differ from one community to the next.
Generally speaking, the HOA is responsible for the common areas and amenities in the community, typically including providing shared services like waste management and collection. They’ll also collect monthly dues, manage community finances (general expenses and projects alike), and plan ahead for larger expenses.
The HOA will also enforce governing documents, which the Board of Directors is responsible for developing in line with the different laws we mentioned earlier.
Speaking of the Board of Directors, they’re also responsible for overseeing the HOA and its functions as a whole. This includes being the decision-makers who develop and adopt policies, as well as hiring and overseeing the different vendors in your community.
What Does an HOA Management Company Do?
As we mentioned earlier, the HOA management company is a professional third-party the Board of Directors hire. They’re there to be the action-takers on the Board of Directors’ behalf.
How this plays out can differ not only from one HOA management company to another, but also based on the individual community’s specific needs.
Here’s some universal givens when it comes to what an HOA management company does:
Administrative Services (“Admin”)
Accounting Services (“Accounting”)
Operational Duties (“Operational”)
Socializing and Communications (“Social”)
Let’s look at each of them in a little more detail to better understand how an HOA management company works.
With all of the planning and paperwork that an HOA’s typical day-to-day operation requires, some administrative services form the basis of an HOA manager’s responsibilities.
Scheduling, attending, and facilitating Board meetings (may include taking minutes)
Preparing and providing monthly management reports
Assisting with preparing the HOA’s annual budget
Receiving and responding to all questions, complaints, and suggestions by the community’s homeowners in a timely manner
The accounting services an HOA management company offers go beyond helping with the annual budget planning. We can actually further break this category of responsibilities: accounting services (general) and accounts receivable.
To make things easier, let’s just take a look at both categories together:
Managing the HOA bank account(s)
Estimating maintenance costs accurately
Review the monthly billings (for assessments and community dues)
Maintaining and providing the Board of Directors with detailed records of all accounts payable and receivable
Create financial statements on a monthly basis and in a timely manner (includes expense reports)
Assist with guidance on long-term funding (includes calculating long-term expenses)
Report on accounts that have fallen into Association Delinquency (when a community member fails to pay their HOA dues)
Handle Association Delinquency on behalf of the Board
Operational duties are by far the most “visible” aspect of what an HOA management company does, because it’s more hands-on in ways the community can see.
Site Management, which is a rather broad category of responsibilities. Common examples include assessing common areas and individual properties to ensure community members are following the HOA’s rules and regulations, compiling reports, and issuing notices or reminders when necessary.
Risk Reduction is a branch-off from Site Management in the sense that assessments may lead to more dedicated inspections, especially in the case of potential hazards. It can also include preventative and other precautionary measures like advising the Board of Directors on insurance coverage.
Vendor Supervision is an operational duty that the HOA may take responsibility for, but will often delegate to the HOA management company. This includes requesting bids or quotations from different vendors (such as landscaping, pool maintenance, renovation/repairs, and security services) as well as selecting them. It also involves ensuring these services are carried out according to the contractual terms.
Last but not least, we have the social functions of an HOA management company, which includes communications.
Similar to operational duties, this is another highly “visible” set of responsibilities:
Establishing and maintaining communication channels for the community, like newsletters and online forums (including Facebook groups) for general announcements and invitations, such as for community news or events
Public Relations, which includes organizing community events together with or on the behalf of the HOA and Board
Resident Management largely encompasses the administrative duty of receiving and responding to communications from community members
How Does an HOA Management Company Work?
We’ve focused on what an HOA management company does – but how do they work?
This isn’t as easy a question to answer, as no two HOA management companies are the same. While the responsibilities are fairly universal, each company has their own set of policies and services offered.
But if you want a transparent and reliable HOA management company by your side, Aquity Management Group is ready to serve!