The homeowners’ association (HOA) of a planned community has many responsibilities, from maintenance of the grounds and common areas to enforcement of the rules to attending regular meetings and making management decisions. Sometimes, an HOA’s board of directors (board) will hire someone (sometimes referred to as a “property manager” or “community manager”) to assist with these responsibilities. These responsibilities might be broad in scope, and require the manager to be on the property on a day-to-day basis. Or, the manager’s responsibilities might be limited to only one or two discrete tasks.
Because homeowners pay the manager’s bill, and because a manager’s performance can impact property values in your community, hiring a good manager and understanding the scope of the manager’s job is important.
What Can an HOA Property Manager do?
Property managers can provide a long list of services to residential communities. These include arranging for maintenance of all common-use structures on the property, landscaping of the grounds, trash removal, security and checks of safety equipment (such as fire and carbon dioxide detectors). They might schedule homeowner meetings and keep all financial books and records current. The manager also often serves as the first person a community member contacts with a complaint, concern, or question about the HOA.
Some managers might also have enforcement responsibilities. For instance, a manager might contact a homeowner who begins to construct an unauthorized addition to the home or who has a barking dog. To avoid conflict, enforcement must be done consistently. The enforcement procedure should be spelled out clearly in the HOA’s governing documents.
It is not the manager’s responsibility to set HOA policies or create its rules and regulations. That responsibility falls on the board and the HOA members. The manager acts in accordance with and, when appropriate, enforces the policies and rules that the HOA adopts. For example, if the HOA decides to replace the existing landscaping with drought-tolerant plants, it will likely be the manager’s job to choose and coordinate the landscape contractor. Or, after the board determines the amount of an annual assessment, the manager might be responsible for collecting the assessment.
Ultimately, the HOA decides the scope of the manager’s role in the community. Even when a management company is hired to perform a wide range of tasks, the HOA remains responsible for oversight and liable for most financial and legal matters. It is important that the board makes sure the manager acts in accordance with the HOA’s governing documents and treats all community members consistently and fairly.
Hiring an HOA Property Manager
Prior to hiring a property manager, the board should review the HOA’s governing documents to confirm that they have the power to take this action, and if so, determine whether there are any limitations as to what the manager can be hired to perform. If, after reviewing the governing documents, it remains unclear whether a manager can be hired by the HOA at all, the board should consult with the HOA’s attorney.
Next, assuming the board gets the green light on hiring someone, it should determine whether the governing documents impose any particular requirements on the property or community manager. A few states require a license or certificate in order to serve as an HOA manager.
The HOA will also want to determine who, specifically, will serve as the manager. Since management companies often have more than one manager on staff, the HOA should find out ahead of time who the management company will appoint. The board should check this person's educational background and years of property management experience. The board should also confirm that the prospective manager has experience handling the specific tasks that the HOA intends the manager to perform.
Use a Management Agreement to Define the Manager’s and HOA’s Responsibilities
The contract between the HOA and the manager describes each party’s responsibilities and, if drafted well, will protect the HOA. For example, in the case of an underperforming manager, the HOA will want to be able to terminate the contract on short notice, in accordance with the contract’s own terms. (Thus the HOA cannot be accused of breaching the contract.)
Having the HOA’s attorney help draft or review the agreement before it is executed by the parties can help ensure that it comprehensively covers future issues such as the need to terminate.
Who Pays the Property Management Fees?
Homeowners in a covenant-controlled community pay the management company for its services through monthly fees and assessments. When these services aren't being provided—for example, the manager fails to having the swimming pool regularly cleaned, or is a no-show on days when expected to be on-site—homeowners have the legal right to challenge their HOA. They may also question the amount that is being spent on a property management company.
What to Do If You've Spotted Issues Concerning Your HOA's Property Manager
If you are a homeowner in a planned community and have complaints about the management company serving your HOA, you should alert your HOA board, in writing, to your concerns. Also begin to document the complaints you have against the management company for future reference.