HOA Responsibilities That Shouldn’t Be Delegated to Property Management


Homeowners associations have become surprisingly common. In fact, the average American has a one in five chance that they’ll buy real estate that’s part of an association. As a result, homeowner association management services have become commonplace as well.

While property management companies can be very helpful to homeowners associations, there are certain things the board of an association should avoid delegating to property management. The following are duties that a homeowners association shouldn’t entrust to a property manager.

Duties Specifically Trusted to the HOA Board

In every homeowners association’s governing documents, there are certain responsibilities listed as belonging specifically to the board. These are usually tasks and processes that are legislative in nature, such as adoption of rules, policies, and architectural review board guidelines. While a property management company might be able to handle these tasks themselves if asked, it’s typically unwise to do so.

Signing Certain Checks or Overspending

It’s wonderfully convenient to have your property manager make financial decisions on a board’s behalf, but this should only be allowed to a set amount. If the property manager needs to approve repairs or expenses more than the amount they’re allowed to make decisions for, they should put the matter in front of the board to decide on. In other words, don’t give your property management company carte blanche to sign checks. Make sure there’s a set budget for them to make spending decisions in.

Waiving Rules

The rules for your homeowners association members are set by the board, and the authority to waive those rules for tenants or property owners usually shouldn’t be given to managers. This includes approval for architectural changes. In fact, property management should rarely be solely responsible for approving architectural changes to the property.

Arranging and Overseeing Audits

Every organization, no matter how small, should have an annual audit done by an independent CPA. Some boards entrust bookkeeping or and funds management to property managers, but the board should be engaged in the annual audit along with the independent auditor. A yearly audit is the best way to avoid miscommunication or misspending from happening.

Anything Beyond Contracted Duties

A property manager’s contact should define the parameters of their responsibilities. With rare exception, they should avoid doing anything that falls outside of those parameters. This way the property management company can take care of day-to-day business, while the board focuses on the association.

The right property manager can make or break a homeowners association’s success, but even the best ones shouldn’t be responsible for everything. By keeping these tips in mind, you can rest assured that all property management responsibilities are handled by the best parties.

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