Residents of a homeowners association should familiarize themselves with HOA board duties. This way, they know what to expect from board members and understand the roles they must fulfill if they volunteer to serve on the board.

What Are HOA Board Duties?

Every homeowners association has a set of leaders—the HOA board of directors. The board is made up of volunteer homeowners who are elected into office by the membership. While exact HOA board responsibilities can vary from one association to another, depending on the governing documents, they generally fall under the same categories.

The primary goal of an HOA board is to ensure that the community operates smoothly to maintain curb appeal and preserve property values. To achieve this goal, board members must fulfill various tasks and obligations to the association.

Here are the typical HOA board of directors responsibilities.

1. Common Area Maintenance

Most HOA communities have common areas, whether hallways, elevators, or amenities and facilities. These common areas or elements don’t just maintain themselves, though. The HOA is generally responsible for ensuring proper maintenance and repairs. And the burden of hiring maintenance companies, budgeting for repairs, and scheduling work falls on the HOA board.

2. Financial Management

The HOA board is responsible for managing the association’s finances. This includes planning the annual budget, collecting homeowners’ dues, approving invoices and expenditures, preparing financial reports, and filing tax returns. Without this crucial aspect of HOA management, a community would cease to function.

3. Vendor Management

The HOA board is responsible for hiring, coordinating, and managing vendors. While some HOAs have in-house employees, most employ third-party vendors to handle various tasks such as cleaning, maintenance, repairs, and landscaping. Board members must carefully vet and select vendors, oversee their work to ensure quality, and coordinate with them for scheduling.

4. Rule Enforcement

Homeowners associations always have rules and regulations that residents must follow. The HOA board enforces these rules and imposes penalties for violations. Of course, the HOA board should adhere to proper procedures when enforcing rules. 

In California, for instance, Section 5855 of the Davis-Stirling Act requires HOAs to schedule a hearing for violations before taking disciplinary action. The HOA must also provide 10 days’ written notice before the hearing. If state laws are silent, board members should refer to their governing documents.

5. Homeowner Communication

The HOA board is also responsible for communicating with homeowners and updating them on association matters. This includes sending notices, posting announcements, and conducting open board meetings. In California, board meetings must be open to all members except for meetings held in executive sessions.

Understanding HOA Board Roles

In addition to the HOA board’s duties as a whole, individual board members have their own roles to fulfill. Here are the individual HOA board member duties.

HOA President Duties

The HOA president leads the entire board and association. They are in charge of overseeing the HOA’s operations and decisions. 

The HOA president’s responsibilities are as follows:

• Overseeing the association’s activities
• Making decisions (even having the final say on split decisions)
• Presiding over HOA meetings
• Signing contracts and other legal documents
• Co-signing checks, statements, and invoices with the treasurer

HOA Vice President Duties

The vice president assumes the role of the president when the latter is not around. As such, they should understand all of the duties of the president and be capable of fulfilling them. The VP assists the president in all matters, with exact responsibilities typically outlined in the bylaws.

The HOA vice president’s responsibilities are as follows:

• Helping the president carry out their duties
• Taking over the role of president if the president is unable to
• Managing committees (in some HOAs)

HOA Secretary Duties

The secretary handles everything related to documentation and recording. They play a critical role in the continued success of an HOA.

The HOA secretary’s responsibilities are as follows:

• Managing all of the association’s records and documents
• Taking minutes of the meetings
• Preparing meeting agendas (with the help of other board members)
• Communicating with board members and homeowners
• Ensuring records remain up-to-date and accurate
• Submitting forms
• Handling paperwork

HOA Treasurer Duties

The treasurer is responsible for the HOA’s finances. They oversee the financial management aspect of running an association and sometimes obtain and update insurance policies.

The HOA treasurer’s responsibilities are as follows:

• Managing the association’s finances
• Planning annual budgets
• Preparing financial statements
• Managing and updating financial records
• Filing tax returns and paying taxes
• Conducting audits (or hiring someone to do so)
• Monitoring funds and expenditures
• Planning and managing reserves
• Establishing and enforcing internal controls

What Are the Fiduciary Duties of HOA Board Members?

Apart from their roles and responsibilities, HOA board members also have fiduciary duties to uphold. A fiduciary duty is the board’s legal obligation to act within the association’s best interest.

Here are the fiduciary duties of the HOA board of directors: the duty of care, the duty of loyalty, and the duty to act within the scope of authority. Let’s discuss each one below.

Duty of Care

The duty of care refers to the legal obligation of HOA board members to act with diligence, prudence, and competence in managing the association’s affairs. This duty requires board members to make informed decisions, exercise reasonable judgment, and prioritize the best interests of the community and its members.

More specifically, the duty of care entails the following:

• Informed Decision-Making. Before making decisions or taking action, board members must educate themselves about relevant laws, regulations, governing documents (such as the CC&Rs), and the specific circumstances of each issue.
• Prudent and Reasonable Actions. Board members are expected to act in a manner consistent with sound business judgment, avoiding arbitrary or capricious behavior. This involves considering the potential consequences of their decisions and striving to achieve fair and equitable outcomes.

Duty of Loyalty

The duty of loyalty refers to HOA board members’ legal and ethical obligation to prioritize the association’s best interests and its members above their interests or biases.

More specifically, the duty of loyalty entails the following:

• Avoiding Conflicts of Interest. Board members must not use their position for personal gain or advantage at the association’s or its members’ expense. This includes abstaining from actions or activities in which they conflict with interest unless disinterested parties fully disclose and approve such transactions.
• Confidentiality. Board members must maintain the confidentiality of sensitive information related to the association’s affairs, including discussions during board meetings and personal information about individual homeowners.
• Transparency and Accountability. Board members are accountable to the HOA’s members and must operate transparently in their decision-making processes. This involves providing homeowners with timely and accurate information.

Duty to Act Within the Scope of Authority

The duty to act within the scope of authority refers to the legal obligation of HOA board members to exercise their powers and make decisions within the bounds of the authority. This authority is granted to them by law, the association’s governing documents, and applicable regulations.

More specifically, the duty to act within the scope of authority entails the following:

• Compliance With Governing Documents. HOA board members must adhere to the provisions outlined in the association’s governing documents. They must ensure that their actions are consistent with these documents and do not exceed the authority granted to them.
• Adherence to Applicable Laws and Regulations. Board members must comply with all relevant federal, state, and local laws and regulations governing HOAs. This includes laws related to homeowners’ rights, fair housing practices, taxation, and other legal requirements that impact the association’s operation.

HOA board members must respect the boundaries of authority delegated to them by the association’s governing documents and bylaws. They should not act beyond the powers that state laws and governing documents place upon them.

Do HOA Board Members Get Paid?

There is a common misconception that HOA board members receive some form of compensation for their service to the association. However, in truth, board members do not get paid.

HOA board members are volunteers, which means these homeowners offer their time and expertise to the community without expecting anything in return. Moreover, most CC&Rs and bylaws prohibit board members from accepting any form of compensation, including discounted HOA fees or waivers of them altogether.

HOAs often suggest paying board members due to the lack of volunteers. With compensation, homeowners would have more incentive to run for positions on the board. However, using this system can be a slippery slope. 

The lack of compensation helps protect board members from personal liability. Additionally, elected board members may be tempted to increase the community’s budget and collect higher fees to give themselves a raise, which would be self-serving and a breach of fiduciary duties.

The Bottom Line

Understanding HOA board duties is essential for residents and potential volunteers alike. Each duty plays a vital role in ensuring the smooth operation of the community. Failure to fulfill these HOA board duties will only result in mismanagement and disrepair for the association.
Personalized Property Management offers expert management services to HOAs and condos in Southern California. Call us today at 760-325-9500 or email us at info@ppminternet.com to learn more!

Homeowners in planned communities often dread hearing the term HOA special assessments. After all, they usually mean having to pay a hefty one-time fee—or even several. However, while levying special assessments is far from ideal, they are often necessary for the HOA.

What Is an HOA Special Assessment?

Many people get confused when they hear about a homeowners association special assessment. What is it exactly and how do HOA dues vs HOA special assessment differ? 

HOA special assessments are extra fees the HOA charges on top of your regular HOA dues, primarily for emergency repairs. They can also be used when there are unexpected large expenses. Hence, they are usually outside of the HOA’s annual budget. 

For example, imagine an earthquake suddenly caused major damage to the HOA’s clubhouse. The HOA dues usually aren’t enough to cover an expense this big, so the HOA has to ask the homeowners to chip in and pay a special assessment for the repairs. 

Why Do HOA Special Assessments Exist?

Special assessments often place a large financial burden on homeowners’ shoulders. However, they exist for a purpose. The following are the most common reasons why HOAs levy special assessments. 

Emergency Repairs

Homeowners associations usually have an annual budget that determines how much the monthly dues will be. The board reviews the previous year’s expenses and forecasts the coming year’s maintenance costs, projects, reserve allocations, and income. Afterward, the board arrives at a reasonable amount each homeowner must pay for upkeep.

With all this careful planning, you would think the board would anticipate the cost of emergency repairs. However, no matter how much planning the board conducts, sometimes things do not go as planned. Whether from a natural disaster like a flood or acts of terror like an active shooter, emergencies do happen. 

Unexpected damages resulting from these calamities must be repaired—and they can cost a lot. Some homeowners think it’s best to leave the damaged property alone rather than levy large special assessments. However, the HOA cannot do that because it is legally obligated to maintain the community’s common areas. 

Community Projects

Some communities may need to fund major projects to create a better living environment. These could entail private road repair, facility renovations, or the addition of new facilities such as swimming pools, access gates, or gyms. However, these are typically outside of the community’s annual budget and require additional funding.

Insufficient Reserve Funds

HOAs expect emergencies to happen, so they allocate a part of the budget to fund the reserve account. This account exists specifically for irregular expenses caused by emergencies or capital improvements. 

With ample reserves, the HOA does not need special assessments. However, sometimes, more than the money in the reserve funds is needed to cover these expenses. As a result, the HOA has no choice but to ask the homeowners to cover the remaining amount. 

Inadequate Insurance

Insurance often pays for major repairs arising from natural disasters and unforeseen circumstances. However, if the HOA lacks insurance or ample coverage, it may need to turn to special assessments to cover the cost. 

Poor Budgeting

HOAs are not perfect and can sometimes make mistakes in financial planning. For example, the board may have forgotten to consider certain expenses. They may have also neglected to inspect the HOA’s aging infrastructure or allot enough money for the reserves. Poor budgeting can lead to special assessments and cost the community a lot of money. 

How Much Are HOA Special Assessments?

Special assessments are often calculated based on the emergency repairs or replacement cost. However, this doesn’t mean the HOA can charge whatever amount they want as long as needed. This is because the state or governing documents may impose an HOA special assessment limit.

In California, the maximum special assessment the board can impose without membership approval is 5% of the annual budget’s gross expenses. That amount is then divided among all the unit owners according to the CC&R’s allocation schedule. However, state law does allow the association to exceed 5% with a majority vote of a quorum of the members. 

The governing documents may also impose certain restrictions on the amount of special assessments HOAs can levy. The community residents should review these rules thoroughly to ensure the HOA is following them. 

Can HOAs Charge Special Assessments Anytime?

It varies depending on state requirements. For example, California HOA special assessment rules state that boards cannot levy special assessments of more than 5% anytime they want. They must gain approval from a majority of the quorum of the membership. However, the board can impose special assessments without approval if they only cost 5% of the annual budget. 

In addition, California law requires proper notice of special assessments. It states that homeowners associations must provide notice not less than 30 or more than 60 days before the assessment’s due date. Likewise, there may be HOA special assessment rules within the governing documents. 

Remember that boards shouldn’t avoid levying special assessments even if the HOA follows these rules. Special assessments should be charged very rarely, if at all. Instead, the board should practice better financial planning and increase the operating budget. 

They should also aim to conduct reserve studies and fully fund the reserve account to avoid special assessments, which should be a last resort and not a common occurrence. 

How Special Assessments Impact Communities

HOA special assessments can impact the lives of homeowners in various ways. Special assessments are often too much to pay for. After all, many people can’t afford to pay $1,800 within 30 days. As such, special assessments give them great financial hardship and may even put them in debt. 

Apart from this, special assessments often disrupt community peace and harmony. Board members and community residents often get into heated conflicts regarding special assessments. In the worst-case scenario, this can lead to lawsuits and even more bills to pay as both parties must cover the cost of litigation. 

In addition, special assessments may make it hard for potential buyers to obtain a mortgage for properties within the community. Lenders often assess the HOA’s finances and how many homeowners are in debt. This may impact mortgage rates and reduce sales. 

Furthermore, real estate agents must disclose any existing special assessments within the community. If a buyer finds out about these fees, they may forego the purchase in favor of a different community. After all, some special assessments pass from sellers to buyers, adding a financial burden on their mortgage. 

Finally, special assessments reflect poorly on the community overall. Nobody wants to live in a financially unstable neighborhood, especially if they treat special assessments as a regular income source. Hence, HOAs that levy special assessments may have lower property values as buyers are discouraged from purchasing homes within the community. 

Can You Refuse to Pay Special Assessments?

Non-payment of special assessments is not a good idea. Like regular assessments, homeowners must pay special assessments to the HOA. Otherwise, the association may impose late fees and limit their rights and privileges.

Apart from this, a big enough debt could result in a lien on the homeowner’s property. The homeowners association can initiate legal proceedings and foreclose the property to collect the debt. 

Can Homeowners Challenge Special Assessments?

HOA special assessments that are illegal or levied outside of proper procedure may be challenged by the homeowners. However, it’s important to review state law and the governing documents to ensure these assessments are unreasonable. Otherwise, homeowners may pay more in legal costs if the court finds the assessment valid.

How to Avoid Special Assessments

Homeowners associations would do well to avoid special assessments as much as possible. Here are some strategies to improve your financial standing and avoid these additional charges.

1. Conduct Reserve Studies

HOAs should conduct reserve studies periodically to assess the current condition of their property. This will give them a good idea of how much to put in the reserves and how long the HOA has before these facilities need major repairs or replacements. 

2. Practice Proper Budgeting

Proper budgeting can help most HOAs avoid special assessments. Take everything into account, such as planned projects or potential emergencies. It’s also important to consider your location, especially if your community is in an area prone to certain calamities, like floods or wildfires. 

3. Hire a Professional

HOAs can sometimes get by with self-management. However, financial planning can be difficult for laypersons without financial knowledge. Consider hiring an HOA management company to help with the community’s finances. 

4. Get Insurance Coverage

Ample insurance coverage can often cover the cost of major unexpected repairs. Make sure to purchase a policy with adequate coverage to avoid special assessments.

Frequently Asked Questions

What Is a Special Assessment Tax?

A special assessment tax is a payment related to property tax and differs from HOA special assessments. It is unrelated to homeowners associations and is only levied on taxpayers. Special assessment taxes fund local projects like road maintenance or construction.

Can Insurance Cover Special Assessments?

Homeowner insurance policies may include loss assessment coverage as an add-on. Property owners can consider this policy to cover any special assessments the HOA may levy on the homeowners. However, it’s best to review the policy’s specific terms to determine the extent of coverage and its exclusions.

A Last Resort

HOA special assessments can be burdensome for many homeowners. It can cause conflict within communities and even be a source of distress for residents. As such, it’s important to employ good budgeting practices and treat special assessments only as a last resort.
Does your community need financial management assistance? Personalized Property Management has the qualifications and experience to help HOAs in Southern California. Call us today at 760-325-9500 or email us at info@ppminternet.com for more details!

When it comes to HOA management companies, there are countless to choose from. They come in all shapes and sizes, offering various services at different prices. If you’re looking for the right company for your HOA, you must prioritize certain qualities over others.

What Do HOA Management Companies Do?

An HOA management company professionally manages communities. It specifically caters to associations such as HOAs, condo associations, townhome communities, commercial associations, and the like.

Community association management companies provide a wide range of services, including but not limited to:

• HOA property management
• Accounting and financial management
• Rule enforcement
• Violation monitoring
• Vendor coordination
• Risk management
• Site inspections
• Project oversight
• Communication
• Board education and training
• Maintenance and repairs management
• Administrative work
• Tax preparation
• Legal assistance

Qualities to Look for in HOA Management Companies

An HOA board should conduct due diligence when hiring an HOA management company. Doing research, conducting interviews, and reviewing contracts should all be a part of the process. Otherwise, an HOA board risks partnering with a company that falls short of expectations.

Here are the top qualities to look for when vetting homeowners association management companies.

1. HOA Knowledge

First and foremost, an HOA management company is nothing without knowledge and expertise. The company must know everything about managing an association and employ managers who are well-versed in industry standards and best practices.

Although most HOAs are formed as nonprofits, they don’t share the same qualities and structure. Running a community is not like running a corporation. It is more akin to running a small town or city. There are proper procedures that must be followed, not to mention several laws and regulations that associations must adhere to.

A good HOA management company should understand how HOAs work. It must also understand how each of its communities/clients works. Not all associations operate the same way, so a competent company will put in the time and effort to get to know the community more than skin-deep.

2. Varying Services

It’s important to find a management company that offers a diverse range of services. Even if you’re only looking for one or two types of services, it’s better to have a company ready to provide more when your needs expand. 

For instance, you may only need homeowner management services right now but may require accounting services in the future. If your company is prepared to offer both, you won’t have to switch companies when the situation calls for it.

3. Experience

Property association management is not for everyone. Many people struggle with it because it involves several moving parts. While education is essential, experience is just as important. Managers with more experience have gone through all sorts of challenges, making them more qualified to serve.

When vetting HOA management companies, ask them about their industry experience. How many years have they been in the business? Do the people they employ have enough experience? Although giving newbies a chance is a noble cause, you don’t want to risk the success of your association.

4. Technologically Advanced

Two decades ago, it would have been acceptable for an HOA management company not to have digital resources. However, in today’s world, technology is a crucial asset, especially as residents start to skew younger.

Look for an HOA management company that takes advantage of technology. Banking app integration, homeowner portals or apps, and online payments can make a huge difference in efficiency and experience. Don’t get left behind.

5. Excellent Communication

Communication is the foundation of a good partnership. You don’t want a company that doesn’t know how to communicate. That means looping your HOA board in on everything and sending notices on time.

You also want a management company that maintains an open line of communication with the residents. If residents have a concern or complaint, they should be able to contact the company. This significantly reduces the need for your HOA board to field calls and emails from homeowners.

6. Reliable

An HOA management company shoulders most of the burden from the board. That means they have a plethora of tasks and duties to accomplish daily. Therefore, it makes sense to want a company you can rely on – one that completes its tasks on time and delivers high-quality results.

When vetting candidates, it’s a good idea to also ask about emergency services. How does the company handle emergencies or disasters? What are their standard procedures and protocols? How will they respond to certain types of crises? You want a company that won’t immediately fold once the going gets tough.

7. Flexible

Finally, you should look for an HOA management company that offers flexibility. A company should be adaptable to change. You don’t want a company that panics at the first sign of adversity.

Moreover, flexibility is an indispensable quality in the HOA industry. Homeowners associations are subject to several laws, including federal, state, and local laws. These laws don’t always stay the same. If a law changes or a new one is introduced, the company should be able to keep up with it and make the necessary adjustments to maintain compliance.

How Much Do HOA Management Companies Charge?

The cost of hiring HOA management services largely depends on your HOA’s needs. Full-service management services will likely cost more than remote services or consulting services. Similarly, if you only need accounting and financial management, you won’t need to pay for the full package.

Furthermore, HOA management companies may have different pricing models. Some charge a fixed management fee per month, while others offer their services on an a la carte basis. Some companies charge additional fees, such as initiation fees and transition fees.

That said, the average cost of hiring an HOA management company is between $10 and $20 per unit per month. If you have a larger community with many amenities, you should expect to pay more than a community with only a few residents and simple common areas.

Making the Right Choice

There are many HOA management companies operating in the country today. With the available pool, many HOA boards need help choosing the right one. Focusing on your needs and the qualities of the best companies should help you narrow down your list of options. Plus, it ensures that you end up with a reliable and outstanding partner in HOA management.
Personalized Property Management offers expert management services to HOAs and condos in Southern California. Call us today at 760-325-9500 or email us at info@ppminternet.com to learn more!

An HOA manager can sometimes be the key to a successful community. While board members are primarily responsible for running the association, they don’t always have the time and skills necessary for the job. A professional manager can fill in the gaps and ensure more seamless operations.

What Is an HOA Manager?

An HOA manager professionally manages community associations, such as HOAs, condominiums, and townhomes. Some managers work under HOA management companies, while others work as independent contractors.

In some places, HOA managers must carry certification. California does not require HOA managers to be certified, but the certification comes with more credibility, education, and expertise. Many HOA management companies also require their managers to pass certain requirements and certifications.

What Does an HOA Manager Do?

An HOA manager serves as the community’s point person. The manager assumes many roles and fulfills many duties. Of course, an HOA manager’s specific obligations will depend on their contract with the association. Some communities only need select services, while others require full-service management.

That said, the responsibilities of an HOA manager include but are not necessarily limited to:

• Ensuring maintenance of common areas and elements
• Managing the finances of the association, including assisting with budget planning, invoicing, dues collection, and financial statement preparation
• Organizing annual membership meetings and board meetings
• Helping with rule enforcement, including inspecting the community for violations, investigating reports of violations, sending violation notices, collecting fines, and organizing disciplinary hearings
• Communicating with residents, including fielding complaints and sending notices
• Maintaining records of the association
• Assisting with tax preparation
• Assisting with annual reports
• Coordinating with vendors and contractors
• Evaluating risks and managing them
• Staying up-to-date with HOA laws and regulations
• Reviewing and upholding the HOA’s governing documents
• Providing advice to the HOA board

While an HOA manager oversees the day-to-day operations, it’s important to note that the HOA board reserves decision-making authority. A manager must not act on their own; rather, they must seek approval from the board.

What Are the Benefits of Hiring an HOA Manager?

Although there is nothing wrong with opting for self-management, HOA boards can reap several benefits when they hire a professional manager.

1. More Experience and Expertise

Professional HOA managers usually have more experience and expertise than volunteer board members. This is because they undergo specialized training and education. They know the industry’s best practices and have faced and overcome countless challenges throughout their service. Most managers are also certified to handle community associations.

In contrast, volunteer board members tend to have different professional backgrounds. While certain careers work in favor of the HOA, such as attorneys, business managers, and accountants, not all communities are fortunate enough to have an endless pool of such volunteers. Besides, many homeowners already find it difficult to juggle their work with their personal lives. There may be better choices than adding another responsibility in the form of HOA management.

Understanding HOA laws and keeping informed of any legislative changes is perhaps one thing many boards struggle with. With professional help, an HOA board can delegate this task to the manager and even ask them for legal assistance.

2. Focused Attention

More often than not, board members must divide their time between their HOA responsibilities and their lives outside of the community. Keep in mind that board members are just volunteer homeowners. That means they have families to take care of, social gatherings to attend, and careers to pursue. This usually doesn’t leave them enough time or energy for the association.

In comparison, a professional HOA manager can focus on the HOA’s operations. It’s their job, after all. They are obligated to give their time to the community and work in the best interest of the association. This typically yields better results because so much attention is paid to association matters.

3. Dedicated Support

It is normal for an HOA to receive complaints, concerns, and reports from homeowners. Alone, board members must field these emails and phone calls, which can sometimes come at the most inconvenient time. Some board members get calls in the middle of the night, while others suffer from incessant emails bearing the same complaint. For volunteer board members, it can all become overwhelming.

An HOA manager, though, offers dedicated support. Many managers and management companies provide 24/7 homeowner support or emergency services. That means board members won’t have to wake up in the morning to 50 missed calls. Instead, homeowners can direct their concerns and issues to a professional.

4. Has a Team

An HOA board may rely on committees to help with association management. However, those committees also consist of volunteers. They face the same hurdles and challenges as board members—lack of time, experience, and expertise.

With a professional manager, an HOA can expect additional support. Most often, managers or management companies have a dedicated team of staff members performing administrative work. These are the more tedious aspects of the job, including sending notices, invoicing owners, and coordinating with vendors.

5. Neutral Third Party

If nothing else, an HOA manager serves as a neutral third party. Board members are responsible for investigating violations, enforcing the rules, and resolving disputes. Because these board members are also homeowners, though, the lines can easily be blurred. They might struggle with imposing a penalty on a neighbor or let their biases cloud their judgment.

With a professional manager, that is less likely to happen. Managers aren’t stakeholders, which means they act as objective eyes and ears. They approach things with a more open and level-headed mind. It’s easier for them to separate their emotions from their work because they’re not dealing with neighbors or friends.

A Manager Worth Hiring

Evidently, hiring an HOA manager comes with plenty of benefits. Board members can breathe a sigh of relief knowing that they can delegate day-to-day work to someone with experience. Meanwhile, they can concentrate on making decisions for the association.
Personalized Property Management offers expert management services to HOAs and condos in the Coachella Valley area. We have the best HOA managers in the area. Call us today at 760-325-9500 or email us at info@ppminternet.com to learn more!

The HOA documents serve as a guiding force for a homeowners association. As such, it is important that all homeowners and board members understand their contents.

What Are HOA Documents?

Every homeowners association has a set of documents that govern its operations. These homeowners association documents follow a hierarchy, each fulfilling a unique purpose and authority.

Homeowners typically receive a copy of their HOA documents when they become a members of the community. However, an HOA may also make these documents available through other means. In today’s age, it is more common for homeowners to access documents online through the HOA’s portal or website. Homeowners may also approach their HOA board or manager for a physical copy. Homeowners may find these documents at the local county recorder’s office in most cases.

Hierarchy of HOA Governing Documents

In descending order, the hierarchy of the HOA governing documents is as follows: federal, state, and local laws, the community plat or map, the HOA CCRs, the Articles of Incorporation, the HOA bylaws, and the HOA rules and regulations. Let’s dive into each one blow.

1. Federal, State, and Local Laws

Federal, state, and local laws precede all other HOA documents. While these laws don’t come in written form, unlike the rest of the documents, they are among the most important. 

Homeowners associations must abide by the law. Some states have specific statutes dedicated to governing HOAs and condominium associations. In California, this comes in the form of the Davis-Stirling Act. However, that doesn’t mean other laws don’t apply to HOAs.

Homeowners associations are organizations, too. In many states, they are nonprofit corporations, and as such, they must follow the state’s nonprofit corporation law.

Additionally, several federal laws apply to HOAs and condo associations. These include the following:

• Fair Housing Act
• Americans With Disabilities Act (in some cases)
• Fair Debt Collection Practices Act
• The Servicemembers Civil Relief Act
• Freedom to Display the American Flag Act
• Over-the-Air Reception Devices Rule
• The United States Bankruptcy Code

Beyond that, HOAs and condos must also adhere to their local ordinances and regulations. These can change depending on the location, so board members should keep themselves informed.

2. Community Plat

The community plat is a recorded map of the entire community. This document contains maintenance responsibilities and the locations and boundaries of properties. Owners will also find each lot or unit’s exact measurements and dimensions.

Other than that, the community plat details the following:

• Landscaping restrictions
• Vehicle restrictions
• Handicapped parking spaces
• Lighting requirements
• Trash enclosures
• Areas for future development

3. Declaration of Covenants, Conditions, and Restrictions (CC&Rs)

The CC&Rs stand out as the most comprehensive among all the governing documents. This document contains all vital information about the development and its operational framework. The only documents that precede the CC&Rs are the community plat and the federal, state, and local laws. If there’s a conflict between the CC&Rs and the HOA’s bylaws, the CC&Rs must be followed.

More often than not, the CC&Rs contain substantial provisions, contributing to its lengthy format. While no two associations are exactly alike, most CC&Rs contain the following:

• Definition of the common areas of the HOA or condo association
• Governance of property use and restrictions, both for individual lots or units and the HOA’s common areas
• Association powers, duties, and extent of authority
• Rights and obligations of the HOA or condo association, including maintenance responsibilities, rule enforcement, and financial requirements
• Rights and obligations of the homeowners or unit owners, including maintenance responsibilities, dues payments, and rule compliance
• Procedures and requirements for amendments to the governing documents
• General rules and regulations, such as architectural standards and rental restrictions

Homeowners and board members must adhere to all the provisions of the CC&Rs. Compliance is mandatory, and breaching these conditions and restrictions can result in penalties.

HOAs must record their CC&Rs in many states with the local county recorder’s office. Sellers must also typically supply a copy of the CC&Rs to buyers before selling a home.

4. Articles of Incorporation

To establish an HOA or condo association, the community developer must create and file the Articles of Incorporation. This document contains pertinent information such as the HOA’s legal name, address, and corporate status. Sometimes, it will also briefly outline the association’s basic functions.

Although the Articles of Incorporation don’t contain much information, it is an essential part of an HOA. Before the developer can sell any property or unit in the HOA, it must file this document as a nonprofit corporation with the Secretary of State. 

However, it’s worth noting that not all states require HOAs to establish a nonprofit corporation. In some places, associations can operate as unincorporated corporations.

5. Bylaws

The HOA bylaws contain descriptions of how the association must operate. It includes a variety of information, including but not limited to the following:

• Voting rights
• Voting procedures
• Rules for calling and holding a meeting
• Frequency of meetings
• Number of board members and officers
• Board member duties and responsibilities
• Election procedures and requirements, including nomination procedures and candidate qualifications
• Term lengths for board members
• Procedures for removing board members

6. Rules and Regulations

The CC&Rs contain the association’s general rules and regulations. However, a separate document, the HOA operating rules, expounds on these general regulations. The operating rules are more specific than the CC&Rs.

Every association is different, so the contents of the operating rules and regulations can vary significantly from one community to another. That said, some rules are more common than others.

Some of the most prevalent rules of an HOA include:

• Trash collection schedules and procedures
• Parking restrictions
• Vehicle regulations
• Fence heights and materials
• Operating hours of amenities

Review Thoroughly

HOA documents play a critical role in any association. They govern how an HOA or condo should run. Homeowners and board members should understand these documents to fulfill their roles better and avoid penalties. On the other hand, buyers should review these documents before purchasing a home in an HOA. This way, they know what they’re potentially signing themselves up for.
Personalized Property Management provides expert HOA services in Southern California, including help with HOA documents. Call us today at 760-325-9500 or email us at info@ppminternet.com to learn more!

Every month, the residents of a planned community need to pay fees to the HOA. However, what is the HOA fee anyway? What does it cover, and how does it benefit the homeowners? Let’s find out.

What Is HOA Fee?

HOA fees, also known as HOA dues or assessments, are the amount of money homeowners must regularly pay to the homeowners association. Homeowners associations typically collect these fees monthly, but some can collect the fees annually or quarterly.

What are HOA fees for? Generally, HOA fees assist the homeowners association with common area upkeep and improvement. HOAs determine the fees based on several factors, including the community’s needs and the number of amenities. It can also depend on the homeowner’s unit size and access to limited common areas. 

What Do HOA Fees Cover?

A homeowners association can use the HOA fees for various expenses. What do HOA dues cover specifically? Here are the most common expenditures for which an HOA will use assessments.

1. Common Area Maintenance

What does an HOA cover? One universal trait among community associations of all kinds is that they are generally responsible for common area maintenance. This may include, but is not limited to, the following tasks:

• Common area pest control
• Facilities and equipment repairs and maintenance
• Amenity cleaning, repairs, and maintenance
• Snow removal for shared parking spaces and roads
• Road, sidewalk, and walkway maintenance and repairs
• Landscaping and lawn care for common green spaces
• Common area utilities
• Security

2. Municipal Services

Homeowners associations are often responsible for civic amenities like security, water, wastewater management, and garbage disposal. The homeowners pay for these through their HOA fees, allowing them to reduce the number of monthly bills.

3. HOA Insurance

Apart from services and maintenance, what are the HOA fees for? One of the most important things HOAs need to pay for is insurance. Every homeowners association needs some form of insurance to protect the community. It pays for accidents on HOA premises and damages to common elements. The HOA can avoid making hefty payments for repairs, medical expenses, and even lawsuits with proper insurance. 

4. Services and Amenities

Some homeowners associations have special amenities like fitness centers, community pools, and co-working spaces. The association uses HOA fees to pay for upkeep and operations. In addition, the HOA pays for other services like security cameras, door attendants, security guards, and community lighting. If the HOA is a high-end community, HOA fees may even pay for luxury services such as valets, rooftop lounges, and luxury training centers. 

5. Reserve Funds

Part of the HOA fees will go to the association’s reserve funds. These funds act like emergency funds in case of unexpected expenses. For example, an HOA can dip into the reserve funds to cover the cost of major repairs after a devastating flood. 

How Much Are HOA Fees?

The amount each homeowner needs to pay will vary based on the community’s needs, size, and services. Generally, larger communities with more amenities have higher HOA fees. The same is true for homeowners associations that provide more services. HOA fees can range from $100 to $1,000 monthly. On average, they cost around $200 to $300 a month. 

How Are HOA Fees Determined?

Every HOA will calculate fees differently. The amount is not arbitrary and is often based on the HOA’s annual budget. At the start of the year, the board will consider all the costs of maintenance, repairs, vendor services, administration, and operations. 

Once considered, they will determine how much they need to cover all the HOA’s expenses — including the reserves. The board will then divide the needed amount by the number of homeowners. However, some HOAs will have special considerations, such as the size of a homeowner’s unit or their access to limited common elements.

Do Homeowners Need to Pay Other Fees?

Apart from HOA fees, homeowners can pay for other things. These include special assessments and fines. 

Special Assessments

If a homeowners association lacks the funds (including the reserve funds) for major unexpected expenses or maintenance work, it may charge a special assessment. Special assessments often fall outside of the HOA’s annual budget. The board can levy them by collecting a large one-time payment or several smaller installments.

However, the board’s authority to levy special assessments may depend on state law and the governing documents. These may restrict how much and often the board can ask for special assessments. 

Fines

HOAs can charge homeowners who violate the rules fines. This ensures compliance and deters residents from violating the community’s regulations. HOAs can also charge fines or late fees if a homeowner falls behind on their monthly dues. 

What Happens If You Fail to Pay HOA Fees?

Homeowners are obligated to pay their HOA fees. They agree to pay the community’s dues when they purchase their home or unit. Failure to pay can result in significant consequences. 

Firstly, failure to pay can lead to late fees and interest. Moreover, fines may increase the longer a homeowner fails to pay. Sometimes, the HOA may also suspend the homeowner’s rights and privileges. For example, the HOA may deny the homeowner access to the community clubhouse or gym. 

HOAs may even place a lien on the property for serious delinquencies or take legal action. A lien can prevent the homeowner from selling their property as it blemishes the title of their home. If the HOA initiates foreclosure action, the homeowner may even lose their property.

Are HOA Fees Tax Deductible?

Generally, HOA fees are not tax deductible if the property is the homeowner’s main residence. However, if the property is a rental home, the homeowner may be able to deduct the HOA fees as part of their rental expense. 

What Is HOA Fee? Answered!

Now that you know what you’re paying for, it may be much easier to pay the amount you owe to the HOA every month. Non-payment can lead to serious consequences, including the loss of your home.
Does your community need help with HOA management? Personalized Property Management offers excellent management services in in Southern California. Call us now at 760-325-9500 or contact us online to learn more!

HOA management can be difficult for the board of directors. They need to balance their responsibilities with their careers and personal lives. For this reason, many HOAs opt for professional homeowners association management.

What Is HOA Management?

HOA management refers to the management and governance of a homeowners association. It includes all the tasks the board of directors needs to do to keep the HOA running. These include hiring and supervising vendors for repairs and maintenance, collecting dues, enforcing rules, and financial management.

What Do HOA Management Companies Do?

Homeowner association management companies provide services that take the burden off the board’s shoulders. They help the board by taking care of daily responsibilities. Here are some of the most common HOA management services these companies provide:

• Financial Management. HOA management companies handle everything from budgeting to bookkeeping, accounting, and preparing financial statements. 
• Collections. Management companies collect dues from residents, track payments, charge late fees, issue notices, and handle delinquencies.
• Maintenance. Management companies receive maintenance requests, schedule maintenance work, and collaborate with vendors to keep the community in shape.
• Community Services. Management companies schedule and handle community services such as lawn mowing, garbage disposal, and snow removal.
• Vendor Management. Professional companies manage vendor relationships and vendor payments. They can oversee the work, terminate vendors, or look for better alternatives when necessary.
• Project Management. HOA management companies can help communities manage large projects such as playground installations, building construction, and amenity construction. 
• Rule Enforcement. Management companies oversee violation inspections, send out violation notices, and issue penalties. 
• Administration. HOA management companies schedule meetings, create and send out agendas, and oversee them. 
• Communication. Professional companies handle all communications, including announcements, newsletter administration, and social media management.
• Dispute Resolution. HOA management companies can handle disputes between members. 
• Legal Compliance. Management companies help communities comply with local and state laws to avoid liability. 

Who Does What: HOA Board vs HOA Management Company

A professional management company can handle most of the board’s operational and administrative duties. However, where do they draw the line? How do you know who has which responsibility if the HOA board hires an HOA management company? 

It’s important to understand that the board always has the final authority at the end of the day. The management company is only the board’s vehicle to implement the rules and conduct operations. It has no decision-making power. This applies to every area of community management. 

For example, when it comes to rule enforcement, the management company only has the power to enforce the rules. However, the authority to create policies remains with the board. The same is true when it comes to late fees and fines. All the HOA management company can do is process the fines, implement the policies, and send notices. It’s up to the board to decide whether to waive the fines or late fees. 

Likewise, the board has the power to approve and set the annual budget, approve expenses, approve maintenance requests, approve hiring decisions, set fee schedules and amounts, and create rules and policies. 

How Much Does Professional Management Cost?

Professional community association management charges different fees depending on the services provided. The cost will be significantly lower for a community that only needs financial management services than for an association that needs full-service management.

Typically, management companies will charge a flat fee based on the number of units in the community. Homeowners associations should expect to pay $10 to $60 per monthly unit. However, some HOA management companies charge a percentage of the membership dues.

Nonetheless, larger HOAs with more units should expect to pay more. This is because there are more common areas to maintain, employees to oversee, and residents to manage. Likewise, management companies may charge more for communities with more amenities or are more complex. 

Self-Management vs. Professional HOA Management

Self-management can be difficult but not impossible for some communities. Which is right for your HOA community? Consider the pros and cons of each before making a decision.

Firstly, self-management can be a cost-effective way to manage a planned community. After all, there’s no added cost of paying for professional services. Moreover, self-management offers more freedom as the homeowners can take care of everything themselves. They do not need to adjust to outsiders’ perspectives or management methods.

However, self-management also comes with several risks. Firstly, one of the biggest risks is a need for volunteers. Homeowners often don’t have the time to contribute to the community or participate in committees. Self-managed HOAs rely on unpaid volunteers, so a lack of willing residents may be a major issue.

In addition, self-managed HOAs often struggle with consistency and experience. The board often needs to have the right skills or resources to handle the needs of an HOA. They might need to learn about community governance, financial management, or legal requirements. Thus, they may make poor decisions that negatively affect the community. They might even face more lawsuits as they’re more prone to neglecting upkeep and legal compliance.

Furthermore, one of the biggest benefits of professional management is that HOA management companies often have good connections. They know which vendors provide high-quality services and already have established relationships with them. Hiring the right vendors is vital as it can improve the community’s satisfaction and reputation. 

Finally, self-management may not be the right choice for larger communities. Even if the community has a large HOA board, there might be too many obligations to keep up with. Choosing self-management might just overburden the board and lower morale. 

Call a Professional Today!

HOA management is challenging, especially if you don’t have the right experience or expertise. We recommend hiring a professional management company to help your community. The right company can make all the difference in maintaining property values and ensuring your neighborhood is a good place to live. 
Are you in search of an HOA management company in in Southern California? Personalized Property Management is the best in the business! Call us now at 760-325-9500 or contact us online for more information.

What is HOA? For many first-time homeowners, the term “HOA” might sound familiar yet seem foreign at the same time. What is an HOA, and what does HOA mean? Let’s find out. 

What Is HOA? What Does HOA Stand For?

Many prospective homeowners will hear the term “HOA” and not understand it. The abbreviation “HOA” stands for homeowners association. However, others will use the term community association or property owners association, depending on the context. Some also use these terms interchangeably. 

What is a homeowners association? It is an organization in a planned community, townhome, subdivision, or condominium building that handles upkeep and rule enforcement. HOAs ensure that property values remain high and that properties within the community are attractive to buyers. 

What Does a Property Owners Association Do?

Homeowners associations are self-governing organizations run by community homeowners. The homeowners typically elect an unpaid board of directors from the community’s residents. These board members oversee HOA management, maintenance, and rule enforcement.

A set of rules and bylaws governs every HOA. All homeowners need to obey these rules. Otherwise, they may face penalties and other consequences for rule violations. The rules exist to maintain order and aesthetic appeal. For example, some HOAs may restrict the color of paint a homeowner can use on their exterior homes. Many HOAs also impose rental restrictions, pet restrictions, and parking rules. 

Apart from the rules, homeowners also need to pay HOA fees. The HOA collects these fees for maintenance work such as landscaping, cleaning, and upkeep of common areas like pools, clubhouses, and parking spaces. They also pay fees to cover the cost of insurance, employee wages, capital improvements, and resident services.

How Do HOAs Begin?

An HOA typically begins when a developer creates a planned community. The developer often creates a homeowners association by creating governing documents such as the Declaration of Covenants, Conditions, and Restrictions (CC&Rs), Bylaws, and Articles of Incorporation. Many developers also incorporate homeowners associations as non-profit organizations. 

Every homeowners association has a leadership team called the board of directors. Initially, the developer appoints the board members. However, as the developer sells homes to buyers, the homeowners eventually elect the board members. 

How Do You Join an HOA?

The moment someone purchases a home in a homeowners association, they become a member of the HOA. They automatically agree to abide by the community’s governing documents and pay their annual dues. 

What Are HOA Fees?

Every member of the HOA must pay HOA fees. These fees, sometimes called HOA dues or assessments, are used to pay for the HOA’s expenses. What does an HOA cover when it collects these fees? Here are some of the ways an HOA uses the collected fees:

• Repairs and maintenance of common areas
• Services such as trash collection, snow removal, and security
• Professional HOA management services
• Reserve funds for major renovations or emergency repairs
• HOA insurance

Apart from regular HOA fees, homeowners associations may also impose special assessments. These are often used to pay for emergencies when the HOA lacks enough reserve funds. On top of these fees, an HOA may also charge fines and penalties for breaking the rules or non-payment of assessments. 

Is Rule Enforcement Legal?

What are homeowners associations able to do legally? Are they allowed to force homeowners to follow the rules? For many homeowners, an HOA’s rules may seem restrictive and overbearing. However, homeowners associations generally have the legal authority to enforce the rules.

This is because the governing documents typically have the force of law in a homeowners association. Typically, the HOA files and officially records these documents with the state. Buyers who purchase a home in an HOA agree to abide by the governing documents. Failing to abide by the rules and financial obligations can have devastating consequences. 

One of the common consequences of failing to meet obligations is fees. HOAs can charge interest on unpaid balances and impose monetary penalties. Sometimes, the HOA can suspend a homeowner’s rights and privileges. In extreme cases, HOAs may file a lawsuit or place a lien and foreclose homeowner property. 

On the other hand, how much power an HOA has will depend on state law and the specific language in the governing documents. They are also bound by specific laws such as the Fair Housing Act and the Americans with Disabilities Act. 

Pros and Cons: Should You Join an HOA?

What is a HOA community like to live in? There are many advantages and drawbacks to living in an HOA. What is HOA like to live in? Here are some things to consider before you jump in.

Pros

• Regular Upkeep. Homeowners associations are often clean and well-kept. Because of the community’s maintenance efforts and curb appeal, property values will likely remain stable or increase.
• Amenities. Many HOAs provide amenities such as pools, playgrounds, and gyms, which homeowners can use for leisure activities.
• Dispute Resolution. HOA boards can often resolve disputes between neighbors through dispute resolution mechanisms. They can also resolve property-related conflicts that violate the rules.
• Convenient Services. Homeowners associations often provide convenient services. They may cover the cost of specific utilities, security, or garbage disposal. 

Cons

• HOA Fees. Assessments and dues can be expensive and stretch a homeowner’s monthly budget. Moreover, they typically increase as time goes on to adjust for inflation and rising costs. 
• Restrictive Rules. Some HOA rules, such as rental caps or architectural standards for home aesthetics, may feel restrictive to homeowners. 
• Disputes Over Administration. Not all homeowners will agree on management methods. The board of directors and homeowners may squabble about handling certain issues.
• Improper Management. Poor HOA management can lead to more trouble than benefits. An inept or inefficient board might neglect its duties or make costly financial decisions, especially if they’re unequipped to run a community.

Living in a Planned Community

What is an HOA? Now that you know what it stands for, it’s important to weigh the benefits and disadvantages of living in a planned community. HOAs certainly provide many perks, but they also come with certain obligations that only some are prepared for.
Do you need a professional HOA management company? Personalized Property Management offers premier management services in Southern California. Call us today at 760-325-9500 or contact us online for more details!