Property managers have a long list of roles and responsibilities. From maintaining the community to accounting and collections, property managers oversee the essential duties that the Board of Directors are often too busy to perform. In order to ensure proper day-to-day operations, many communities hire a property manager to just that, manage their property.
But before we break down the specifics of property management, it is important to first understand the basics.
What is an HOA?
Homeowners’ Associations (HOA’s) manage real estate projects like Condominiums, Planned Unit Developments (PUD’s) and de Minimus PUD’s, among others. The Community Association Institute reports that there are about 320,000 association-managed projects that are home to more than 63 million residents within the United States’ borders. The Board of Directors, for each real estate project, are elected by the unit owners.
Elected Board Members are tasked with the responsibility of enforcing the rules that govern a Homeowner’s Association. These rules are referred to as by-laws and CC&R’s. Homeowner Associations generally issue warning letters for rule violations, however, it is noted that the HOA possesses the legal power to enforce their rules. From a legal perspective, Homeowner’s Associations are designed to enforce a project’s CC&R’s – Covenants, Conditions, and Restrictions. The CC&R’s pertain to legal obligations a Homeowner’s Association has to its members.
Unit owners, through the direction of the board of directors, have the option to propose or modify existing rules through procedures established by the by-laws.
Typically, a homeowner’s association must:
- Provide the bookkeeping functions supporting the project
- Supportive functions when conflict arises
- Maintain insurance policies for common areas
- Maintain swimming pools and other common areas
- Set and enforce security protocols
- Set and revise a budget for the homeowner’s association
- Manage current staff and contractor credentials, and, the list goes on…
Ultimately, the homeowner’s association must manage the performance of employees or independent contractors from a plethora of service providers that include: plumbers, fire marshals, electricians, landscapers, insurance agents, lawyers, pool maintenance companies as well as deal with owner complaints along the way. The reality is, the management of these many service providers is often too complex and time-consuming to be managed just by the board members alone.
Most HOA board of directors, especially those managing real estate projects that exceed 100 units, eventually conclude that it is prudent to hire someone to professionally manage the HOA’s required service contracts. The professional who is trained to handle these issues and to diffuse intense conflict is The HOA Property Manager.
What exactly does an HOA Property Manager do?
Typically, a Property Manager (PM) mitigates the members of the board’s workload. This includes managing:
Administrative Aspects: This includes accurate booking, income and expense tracking, the appropriate timely communication with owners. Essentially, these responsibilities could be viewed as ‘behind the scene’ goals. There are moments that will require the PM to properly deal with irate owners, owner violations, the enforcement of collection procedures, and massive amounts of data entry.
Financial Aspects: Proper financial oversight is critical for the proper management of an HOA. A Property Manager is responsible for managing reserves for long-term projects and scheduled maintenance. Property Managers offer fundamental assistance with tax filings, budgets and expense monitoring throughout the year.
Physical Aspects: A Property Manager is tasked with the responsibility of overseeing the many service provider contractors. Property Managers help offer routine compliance checks with regards to:
- Bidding Contracts
- Hiring Issues
- Due Diligence Matters
- Vetting Vendors
Essentially, a qualified skilled Homeowner’s Association Property Manager is worth their weight in gold. When selecting a Property Manager, choose carefully, choose wisely because one never minds paying for services that oversee the Homeowner’s Association’s objectives while maintaining (or improving) the state of the project managed by the Homeowner’s Association.
Why do you need an HOA Property Manager?
An HOA Property Manager is essentially an agent for the HOA’s corporate entity. A Property Manager’s ultimate goal is to increase the value of the property they manage while facilitating the enjoyment of all unit owners. But remember, that a Property Manager acts to implement and enforce the guidelines set forth by denoted in the CC&Rs, Rules & Regulations and Bylaws.
A Property Manager generally possesses the talent and experience a) to provide guidance to the HOA’s Board of Directors and b) to ensure the Homeowner’s association complies with federal, state and local law. Property Managers are great resources to confirm that the HOA’s board of directors are making practical and legal decisions that enhances and protects the community for which they work.
About Diversified Association Management
Diversified Association Management (DAM) is best in class for HOA management. Since 1984, DAM’s principles have provided common interest development management services for condominiums, planned unit developments, industrial associations, master associations and maintenance associations. We serve communities in Orange County, Los Angeles County, and the Inland Empire. To learn more about our services, please call us at (714) 544-7755 or email us at info@diversifiedassociationmgmt.com.
