The Responsibilities of an HOA Property Management Company

Do you found yourself discussing the idea of an HOA management company?  Or in fact, you may even work alongside one right now. Yet, for some HOA communities that aren’t as familiar with the dynamics, a property management company can sometimes be misunderstood. The idea of change, a shift in responsibility, or the cost can sometimes intimidate an established HOA.  The idea of someone else taking their role can be a deal-breaker. “Why pay a management company to do something that your HOA has been doing the same way for 20 years, right?” Sound familiar? The purpose of a property management company isn’t to repeat what the HOA has been doing; it’s to turn those tasks of 20 years into efficient and quicker processes so that the HOA can minimize its workload and provide better services to its community members. 

To better understand, let’s review:

7 primary responsibilities of an HOA property management company. 

1.  Billing and collections:

An HOA management company works as a third party that can cover the financial responsibilities of billing and collecting payments from residents. Given the potential for an unstable economic situation, a management company can also buffer an aggressive collection policy and delinquencies. They also superhead tasks such as:  

• Billing residents.
• Dues collection.
• Collections support. 
• Handles delicate situations and problem accounts.
• Issuing delinquent notices to residents.
• Coordinating with the HOA’s financial, legal counsel when necessary. 

2.  Enforcing community policies:

Besides being thoroughly knowledgeable about the HOA’s CC&R (covenants, conditions, and restrictions), the management company is also responsible for implementing its policies and guidelines. This is so that the HOA can ensure that all residents comply with their CC&R policies and procedures.

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

3.  Vendor management:

Managing vendors is a significant responsibility of a property management company. Having the expertise of a management company also comes with the perk of having your very own HOA agent — or for better words, the HOA sales rep. A management company wants to see its community thrive — to make this happen, they must ensure that the community is maintained financially. 

• Help coordinate vendors (ex. landscaping, common areas, maintenance). 
• Assist in negotiating and re-negotiate contracts.
• Solicit competing bids from vendors. 
• Act as the primary point of contact for vendors. 

4.  Risk reduction:

Another primary responsibility comes with mitigating risk. To better explain, a property management company will regulate potential risk by thoroughly assessing possible liabilities that could follow down the road. A management company will also assist in ensuring that the HOA’s insurance coverage is adequate and up-to-standards.

• Regulating safety hazards. 
• Addressing outstanding risk. 
• Ensuring all community members are well informed about any potential risk that could affect their community. 

5.  Administrative office duties:

In most situations, the property management company will act as the primary on-site resource for the HOA. They will support the HOA by managing the daily operational office duties that are often needed in an HOA.

• Assists HOA with budgeting. 
• Coordinate board meetings.
• Answering phone calls, voicemails, and emails.
• Creating and maintaining reports as needed.
• Assisting in tasks related to accounting or invoicing. 
• Coordinates agendas and events when necessary.

6.  Site management:

No homeowner wants their neighborhood to look as if a wild group of animals came charging in. Over the past 14 months, 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 need to inspect for any on-site violations. Other tasks may include: 

• Managing bulk trash and yard maintenance requests. 
• Properly storing large playground or outdoor equipment.  
• 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.  Keeping an open line of communication with residents:

There are two essential aspects of communication regarding community members; sharing information with the community and providing easy access to information for residents to see. With health and safety protocols constantly changing due to Covid-19, maintaining accurate and timely information from the community is just as important as providing an accessible and readily available platform.

4 primary job roles of an HOA property management company

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

A property management company should assign an in-office (or virtually available) resource for administrative office duties. This person is responsible for:

• Create and maintaining reports 
• Scheduling and attending board meetings
• Responding to homeowner requests promptly
• Enforcing onsite rules and regulations in the community

2.  Accounts receivable:

An accounts receivable is mainly responsible for assessing and collecting fees. They also play a prominent role in managing the association's funds and transactions.

• Manage all billing and invoices
• Managing delinquent accounts
• Enforcing by-laws around financial assessments

3.  General accounting:

In addition to a resource for managing and assessing AR, a general accountant is employed to maintain the accuracy of the community's finances. They also oversee the budget, which plays a significant role in the financial health of the HOA.

• Manage bank accounts
• Keep records on AP and AR
• Reviewing and maintaining a monthly budget 
• Guide all accounting responsibilities such as  long-term funding

4.  Site management:

A site manager is crucial to a well-run community. A site manager can ensure that grounds, facilities, and other projects are well-maintained. 

• Correctly answering homeowner concerns
• Implementing homeowner rules and regulations
• Submitting management reports monthly 

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

It’s pretty standard 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 may have the ability to enforce the community's policies. Still, any decision to do so is strictly created by the Board of Directors on behalf of the HOA. 

Have there been any significant changes to the responsibilities of an HOA property management company since Covid-19?

In short, yes, there have been changes in the responsibilities of property management companies since the onset of COVID-19. However, it’s not necessarily that there have been added responsibilities — more accurately, there has been a shift in priorities. For example, before the pandemic, creating and hosting community events was a high priority. Due to Covid 19, many management companies have had to cancel gatherings and develop alternative ways of gathering people together by using virtual community spaces. Other significant impacts include:  

• Social distancing 
• Shelter at home mandates
• Virtual property inspections
• Accepting online rental applications
• Providing video tutorials on how to do maintenance repairs.
• Using property management applications to collect rent, accepting maintenance requests

Does a property management company use its own HOA software? 

In most cases, it’s dependent on the company. Some management companies may offer that they utilize software as an added benefit, while some HOA boards may already employ software that they prefer the management company to operate.

Recap

What is the sole purpose of an HOA property management company? 

• To manage the workload of the HOA 
• Create efficiencies and easier processes
• Work as advisors of the HOA Board of Directors 

7 primary responsibilities of an HOA property management company

1. Billing and collections
2. Enforcing community policies
3. Vendor management
4. Risk reduction
5. Administrative office duties
6. Site management
7. Keeping an open line of communication with residents

4 primary job roles of an HOA property management company

1. Administrative and day-to-day office services
2. Accounts Receivable
3. General accounting
4. Site management

Common questions

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

The management company may have the ability to enforce the community's policies. Still, any decision to do so is strictly created by the Board of Directors on behalf of the HOA. 

Have there been any significant changes to the responsibilities of an HOA property management company since Covid-19?

In short, yes. It’s not necessarily that there have been added responsibilities — more accurately, there has been a shift in priorities. A few examples include: 

• Social distancing 
• Virtual property inspections
• Accepting online rental applications

Does a property management company use its own HOA software? 

It’s dependent on the company. Some management companies may offer that they utilize software as an added benefit, vs. others who may already employ software they prefer the management company to use.

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