Property Management companies assume many roles and balance numerous tasks, simultaneously. They must be firm, yet flexible. A good management company enjoys working with the board of directors, the general public, and the contractor network. The management company is a partner with the Board, working under their direction and following established policies. However, the company is not afraid to take control of a situation and give advice to the Board. Successful companies have a strong background in the laws and principles of property management.
The association elects a board of directors and new officers each year, or it may have an annual election with staggered multiple-year terms to ensure consistency of board decisions. Board meetings are usually held after-hours in one of the residents units, an office or common room on site or public building. Because the board meeting is also a gathering of neighbors, the agenda may yield to tangential discussions.
The board makes management decisions and sets out HOA policy. The decisions and policies are carried out by the management company. This may require the management company to mediate differences of opinion among the board members or among residents.
It is important that the Management Company understand its role in a staff position to the board. The management company may have certain expertise to share with the board based on experience and training. It is the Board however, that has ultimate control and responsibility and thus makes the final decisions.
The Management Company also should provide professional training on how the board can have the greatest impact and do the most good in a reasonable amount of time.
The Property Management Company works closely with the Board and residents of the property. As a result diplomacy is essential to effectively negotiate delicate matters that may arise among all the parties.
Primary responsibilities include:
There are numerous laws affecting the management of Home Owner Associations and Property Management. The Property Management Company must develop a working knowledge of these laws. Knowledge includes areas of discrimination, eviction, accounting and deposits, American with Disability Act, Lead Base Paint Hazard Reduction Act, Megans Law, The USA Patriot Act and Executive Order 1324, and the Terrorism Risk Insurance Act (TRIA).
As with any business, Home Owner's Associations require various forms of insurance to operate safely. State and local regulations may have minimum insurance requirements; however, most boards choose the level of insurance coverage based on needs and budget. Having good insurance counseling and options is a service that must be offered by a professional management company.
A professional management company is more than just one person managing properties. It is a team of experienced professionals with expertise in the various areas of management. This includes a Broker with a long term commitment and history of serving HOA's and a separate division to carry out the many tasks of property management. It also includes property managers properly licensed with the State, multiple accounting personnel, facility management personnel to maintain the property and to supervise contractors, and office or affiliate offices near the location of the property. Without this support team, an individual who tries to manage multiple properties will not be able to serve the needs of all the communities in a reasonable time frame.
One of the main roles of the property management company requires supervision. A professional property management company will supervise the project and make sure that resident are caring for their own properties and the common areas. Supervision of the contractors who work on the property, the accounting systems, collections, disbursements, and general market trends all require diligent supervision. Accountability of these stewardships is required by the Board of Directors.
A professional property management company will have systems in place to manage the monies of the HOA and to report to the Board on the status and disposition of all funds. This includes computer program specifically designed for property management purposes. Collection of dues from residents should be according to the policies established by the CC&R's and the Board. Collection procedures should be in accordance with applicable Federal and State laws.
The professional management company must use the latest in technology to support the needs of the board and the resident. Each HOA receives the following in technology services:
Use of technology makes information more readily available to residents and reduces the time and work load of the board in communicating with residents. It also give residents 24/7 access to contact with the management company.
An important element of HOA property management is the specific management plan of real property. It requires the analysis of the current physical, fiscal, competitive, and operational conditions of the property. It also may include the feasibility or practicality of plans of the Board for the property.
The Management Agreement outlines the arrangement between the owner of the property and the management company. The management company offers a variety of services not all of which may be needed by the HOA. As a result the management agreement needs to be flexible to accommodate a limited number of services and large enough to accommodate larger association needs.
Management Agreements include the following elements:
Contact us to find out more about property management services available in your area or to consult with one of our experienced property managers.