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HOA Property Management Functions

Seven Responsibilities of a Property Management Company for HOAs.

Four primary functions of a property management company.

Is the property management company the HOA Board?

What are the changes in the responsibilities for a HOA management company since Covid-19?

7 responsibilities of a property management company for HOAs

1. Billing & Assessment Collection:

A management company works as a third party that handles the financial responsibilities of billing and collecting payments from owners. During unstable economic situations, a management company can help work with delinquent owners to arrange payment plans approved by the Board. Being financially stable is very important to ensure the maintenance of the Association can be maintained. Management companies can also handle tasks such as:  

  • Billing residents.
  • Collection of monthly assessments.
  • Assist in developing payment plans with owners.
  • Handling delinquent accounts pursuant to the Association’s delinquency policy.
  • Issuing delinquent notices to owners pursuant to the Association’s delinquency policy.
  • Coordinating with the HOA’s trustee and/or legal counsel when necessary. 

Managing Agents must be thoroughly knowledgeable about the HOA’s CC&Rs (covenants, conditions, and restrictions). The management company is responsible for implementing its policies and guidelines approved by the Board of Directors. The purpose is to ensure all residents comply with their CC&R and rules and regulations.

When decisions are made by the Board of Directors, a management company is responsible for ensuring all community members comply and adhere to the board’s decision. 

3. Management of Association Approved Vendors:

Managing vendors is a significant responsibility of a property management company. Vendors must have the proper license and insurance coverage to work for Associations. A management company’s goal is to see its community thrive. To make this happen, they must ensure that the community is maintained financially. Management companies assist by the following:

  • Help oversee vendors maintenance responsibilities (ex. landscaping, common areas, maintenance). 
  • Assist in negotiating and re-negotiate contracts.
  • Develope Requests for Proposals for maintenance projects.
  • Solicit competing bids from vendors. 
  • Be the primary point of contact for vendors for the Association.

4. Mitigating Risk:

Another responsibility of the management company is mitigating risk for the Association. A property management company will address the Board regarding any potential risk by thoroughly assessing possible liabilities throughout the community. The management company also works with the insurance agent to ensure that the HOA’s insurance coverage is adequate and in compliance with State Law.

  • Reporting safety hazards to the Board of Directors. 
  • Addressing outstanding maintenance concerns that could be come a safety concern for the Association. 
  • Ensuring all community members are well informed about any potential risk that may exist. 

5. Administrative Responsibilities:

The property management company acting under a full-service contract will act as the primary contact for the Association. Management Companies support the Board of Directors by managing the day-to-day business affairs for the Association.

  • Assists HOA with annual budget
  • Coordinates board meetings and prepares meeting agendas.
  • Answering phone calls, voicemails, and emails from residents.
  • Creating and maintaining reports as needed for the Board of Directors.
  • Assisting in tasks related to accounting or invoicing per Board direction.
  • Coordinates events when necessary.

6. Inspection of Property:

Every homeowner wants their neighborhood to look well maintained. Over the past two years, residents have spent more time in and around their homes more than ever! As a result, HOA’s are receiving a higher number of maintenance requests and reports of violations. These concerns are investigated by the managing agent in addition to the following:  

  • Managing bulk trash and yard maintenance requests. 
  • Processing work orders for common maintenance request.
  • Ensuring common and recreational centers are appropriately tended to. 
  • Regulating vendors (if necessary) to ensure that maintenance requests and contract jobs are correctly being made.

7. Communication with Residents:

Communication with community members is very important. Sharing information with the community and providing easy access to information for residents to see is achieved via the use of a portal website that owners and tenants are able to access at their convenience. With health and safety protocols constantly changing because of Covid-19, updating the membership in a timely manner is very important.

Four Primary Functions for a Management Company

1. Administrative and day-to-day office services:

A property management company assigns a Manager to each Association. However, there is a team within the management company that conducts the administrative office duties for the Association. The departments are noted below:

  • Customer Service Department answers the telephones, records the incoming phone calls, and directs the phone call to the appropriate department. 
  • Work Order Department prepares work orders at the request of residents and/or the managing agent.
  • Escrow Department handles the document transfers for escrows or refinance paperwork that is requested from owners.
  • Accounts Payables Department handles the authorization of invoices and issues payments pursuant to Board approval.
  • Accounts Receivable Department works with the banks to facilitate the receipt of payments and that they are correctly posted to owner’s accounts in a timely manner.
  • The Manager schedules and attends board meetings as outlined by the Board of Directors.
  • The Managing Agent and/or Customer Service Department responds to owner requests.
  • Inspection Officers conduct regular inspections of the property in an effor to enforce rules and regulations in the community as well as identify maintenance needs for the community.

2. Accounts Receivable:

The Accounts Receivable Department is responsible for assessing and collecting the monthly assessments for the Association. Payments are sent to a lockbox. The managing agent receives this file daily and ensures that all information is downloaded into the owner’s accounts. Other responsibilities include:

Manage all billing and invoices

Managing delinquent accounts

Enforcing legal documents of the association with regard to assessments

3. Accounting:

In addition to a resource for managing and assessing Assessments approved by the Board, a general accountant and bookkeeper are retained to maintain the accuracy of the community’s finances via monthly financial statements. The managing agent oversees the annual budget, which plays a significant role in the financial health of the Association.

  • Manage bank accounts of the Association.
  • Keep records on AP and AR.
  • Reviewing and maintaining the monthly on a monthly basis. 
  • Monitor all accounting responsibilities for the reserves.

4. Regular Inspections:

An Inspection Officer is crucial to a well-run community. An Inspection Officer ensures that grounds, facilities, and other projects are well-maintained. 

  • Investigate owner concerns and providing findings to the Board of Directors.
  • Implementing homeowner rules and regulations
  • Submitting management reports monthly 

Is the property management company part of the HOA Board of Directors? 

It’s pretty common for community members to assume that the property management company is the one making all the decisions. That’s far from being true. The management company’s responsibility is to enforce the community’s policies as set forth by the elected Board of Directors. Management receives their direction from the Board of Directors. The Board of Directors is given the authority to make policies and procedures for the members pursuant to the Association’s legal documents.

What are the changes in the responsibilities for a HOA property management company since Covid-19?

There have been many changes in the responsibilities of property management companies since the onset of COVID-19. Policy changes with the way owners accessed common areas require immediate attention. There has been a shift in priorities. Because of Covid 19, management companies must monitor the Covid-19 guidelines for their communities. The regulations resulted in canceling gatherings and the need to develop alternative ways of allowing the gathering of people together by using virtual community spaces to conduct the regular Board of Directors meetings. Other significant impacts include:  

  • Social distancing requirements and disclosures. 
  • Shelter at home mandates and assistance.
  • Virtual property inspections.
  • Conducting Annual Elections via video conferencing.
  • Providing updates via websites and/or portals for owners.
  • Using property management applications to collect assessments.