Every homeowners association has rules and obligations for homeowners. These rules exist to promote a peaceful and harmonious environment. However, there are times when people break the rules, and the board has to act. How can the board handle HOA violations fairly? 

How to Handle HOA Violations

Planned communities need a standard HOA violation process the board can follow. This procedure guides the board on what to do whenever someone breaks a certain rule. Here are some things to incorporate into the community to ensure fair and reasonable enforcement. 

1. Clarify the Rules

They say prevention is better than cure, and the same is true for rule enforcement. The best way to prevent violations is to ensure everyone knows and understands the community rules. This keeps CC&R violation reports at a minimum.

Make sure that every rule is clear, and provide each homeowner with a copy of the community guidelines. When someone new comes along, ensure they receive a copy of the HOA governing documents. Posting the rules on the community website and sending periodic reminders through the newsletter may also be helpful. 

Most homeowners don’t mean to violate the rules — they just happen to do so on accident. Keeping them informed will go a long way in deterring violations. 

2. Be Firm

Homeowners may sometimes try to talk themselves out of enforcement. However, being selective about rule enforcement can only bring trouble. HOA board members must stay firm and enforce the rules equally to all residents. This allows for fair rule enforcement and establishes the board’s authority in the HOA.

On the flip side, don’t become overly strict. The board should handle things appropriately without being punitive. For instance, let’s say a homeowner violates parking rules and parks somewhere they should not. Imposing a $500 fine would be too much, given the violation committed. 

It’s essential to be both firm and fair. HOA board members will interact regularly with the residents, so it’s best to establish a good relationship with the homeowners. 

3. Send a Warning

When someone commits a violation, the first course of action is to send an HOA violation letter to warn the resident. A letter is usually good enough to deter future violations. It alerts the homeowner of their violation and tells them what they should refrain from. 

At times, verbal warnings may also be enough to deter violations. For example, talking to a neighbor about playing loud music during quiet hours is often enough. However, some residents may continue to violate the rules. Other times, the violation may be too large for just a verbal warning.

In this case, it’s best to issue a violation letter. Sending notices also allows the board to record the homeowner’s past infractions — big or small. 

4. Hold a Hearing

Homeowners have a right to be heard when a violation occurs. The HOA can establish the violation’s legitimacy by holding a hearing. During the hearing, the homeowner can explain their situation and ask for leniency or appeal to the board.

Give the homeowner enough time to prepare before the hearing. The HOA should give notice of the hearing’s date, time, and location. If the homeowner does not show up or cannot attend, the board may take the violator to small claims court. 

5. Suspend Rights and Privileges

Stubborn homeowners may not obey the rules despite repeated warnings. In these cases, it’s best to impose a penalty on the homeowner. One way to do this is to suspend the violator’s rights and privileges.

For example, the board may revoke the homeowner’s access to the community pool or gym. They may also be banned from other shared spaces until they are cured of the violation. The ban may be temporary or even indefinite, depending on the violation committed.

This type of enforcement is a great way to show the residents that the rules are serious without resorting to fines. It’s also a good first step before the board takes enforcement actions. 

6. Impose Fines

Monetary fines are a good penalty for repeat offenders or major violations. Nobody wants to pay money because of a violation, so it usually stops bad behavior. The board should create a fine schedule to impose appropriate fines based on the type of infraction. 

Small violations, such as violating noise rules or using the pool after hours, can result in a modest $20 fine. Meanwhile, more severe infractions like unauthorized rentals or construction could cost over $500. 

It may also be wise to scale each fine per repeat offense. The first offense of a minor violation could result in a small fine. However, the penalty may increase for each succeeding infraction. The HOA board has to be clear, consistent, and fair when imposing these penalties. Make sure the fines are displayed so people can think twice before violating the rules.

7. Place a Lien on the Property

Nobody wants a lien on their home. A lien can cause property title problems and prevent people from selling the home. Moreover, it can even result in foreclosure if the HOA takes action on the lien to collect unpaid charges. 

This is why many HOAs use property liens to enforce the rules. It’s the most extreme rule enforcement measure and should be reserved for grave infractions. For example, HOAs often only impose liens on delinquent homeowners who have not paid their HOA fees for months or even over a year.

Some HOAs also impose liens because homeowners refuse to pay for common area property damage. Regardless, make sure the lien is justifiable. It’s best to consult a lawyer before proceeding. 

How to Report HOA Violations

In most homeowners associations, the board members do not have the time, resources, or manpower to monitor violations 24/7. Hence, it’s usually best to establish a reporting system so neighbors can report violations. How can homeowners report violations? Here are some good methods.

Talk to the Board

Reporting HOA violations does not have to be complicated. Sometimes, a simple conversation with the board of directors is all it takes to report an infraction. Homeowners can contact the board through text, mail, email, or call. If other communication methods fail, they may also visit the management company’s office.

In addition, many HOAs allow members to call a special meeting to discuss important matters. The homeowner may also discuss the violation there. 

Submit a Complaint

Homeowners should be able to submit complaints to the board or management company. Consider creating a physical or digital violation form the neighbors can fill out. They should be able to attach witness statements, photos, or videos as evidence.

How to Avoid Selective Enforcement of HOA Rules

Unfortunately, HOA abuse is not uncommon in homeowners associations. Many board members abuse their power and play favorites when it comes to enforcement, leading to selective enforcement and unfair penalties. How can communities avoid them? Here are some tips.

1. Elect Good Board Members

HOAs should elect competent board members who are fair and of good character. Good board members will enforce the rules equally, even if it means conflicting with friends or family.

2. Establish a System

The HOA should establish an efficient enforcement system that can be implemented across the community. It should outline the types of enforcement actions the board can take for each rule violation and include a fine schedule so the board imposes fair fines. 

3. Be Transparent

The HOA board should be transparent about rule enforcement. They cannot show bias or prejudice regarding penalties. Implement ways to keep the board accountable to ensure the enforcement process is fair and transparent. Keep communication clear and consistent to avoid confusion.

4. Keep Detailed Records

The HOA should keep detailed records of past violations and penalties. This way, homeowners have a reference for violations and how they were handled. The homeowners can call the board if they see any signs of selective enforcement. 

5. Provide a Medium of Complaint

The HOA should provide a means for homeowners to complain. Doing so allows residents to report violations the board might not notice. It’s a good way to enforce the rules and helps people see that the board is serious about enforcing them equally. 

Common HOA Violations to Watch Out For

What violations are common in planned communities? Here’s a list of HOA violations that occur most often. 

• Noise
• Smoking in non-smoking areas
• Improper vehicle parking
• Trash bins in the wrong place
• Exterior storage (e.g., storing bicycles and other equipment in the front yard)
• Forbidden exterior decorations
• Unapproved architectural changes
• Improper or overgrown landscaping
• Pet violations
• Illegal property rentals
• Commercial activity

Playing Fair

HOA violations are common in planned communities. They’re just a normal part of community living. HOA board members should handle each violation fairly and consistently. They should also have a standard enforcement process to avoid selective enforcement.

Personalized Property Management provides industry-leading HOA management services to HOAs in Southern California. Call us today at 760-325-9500 or send us an email at info@ppminternet.com for more details!

RELATED ARTICLES:

• HOA Meeting No Quorum: What Happens Now?
• What Is HOA Governance?
• Is Having An On-Site HOA Manager More Advantageous Than A Remote One?

Just like other parts of the community, HOA sidewalks need regular maintenance and repair. Who is responsible for HOA sidewalk maintenance? Is it the homeowner or the homeowners association? 

Who is Responsible for HOA Sidewalks?

It’s common knowledge that homeowners associations are responsible for maintaining the common elements. These include the association’s clubhouse, pool, and even shared roads. However, determining responsibility isn’t always clear when it comes to HOA sidewalks. Is HOA responsible for sidewalks, or are homeowners responsible for sidewalks?

Responsibility for HOA sidewalk repair isn’t always straightforward. It usually depends on the association’s governing documents and its municipality. More often than not, homeowners are responsible for maintaining the sidewalks in front of their property. Meanwhile, the HOA is responsible for sidewalks in common areas (e.g., in community parks or playgrounds).

In some cases, the homeowner and HOA are jointly responsible for maintaining the sidewalks. This means they must work together to ensure they’re clean, well-kept, and free of obstructions and cracks. 

Is the City Responsible for Public Sidewalks?

Some properties are located on the border between HOA property and public property. If a home has two sidewalks, one on the HOA’s side and one on the public street’s side, who is responsible for sidewalk maintenance?

Unfortunately, the answer is not always clear, either. The governing documents may determine responsibility for the sidewalk within the HOA’s boundaries. The governing documents may outline who is responsible for the sidewalk.

The sidewalk beside the public road may also depend on local regulations. For the most part, though, homeowners are responsible for maintaining sidewalks that border their property. This is surprising for many, as most people assume it’s part of the city’s job to maintain public sidewalks. 

However, it’s a common misconception, and the responsibility often falls on the homeowner. This is true in many states, including California. 

What’s Included in HOA Sidewalk Maintenance?

Whether the HOA or the homeowner is responsible, HOA sidewalk maintenance must be a priority. This is especially true if the HOA is located somewhere that sees a lot of snow. The one responsible should make sure to remove the snow so that the sidewalks are passable. Moreover, a lawsuit could result should someone slip and fall because of frozen sidewalks. 

What is included in HOA sidewalk maintenance? Here are some things the HOA or the homeowner must take care of. 

• Regular Inspections. Homeowners or HOAs may conduct regular inspections to ensure the sidewalks, the soil underneath, and the drainage are in proper condition. 
• Fix Landscaping Issues. Trees and vegetation around the sidewalks must be well-maintained and pruned to prevent damage to the sidewalk.
• Proactive Maintenance. Cracks in the sidewalks can lead to eventual erosion, property damage, and potential accidents. Make sure to be proactive in maintaining the sidewalks to steer clear of unnecessary damages. Apply sealant every 2-3 years to prevent cracks from forming on the surface.
• Tree Removal. Some tree roots may lift the concrete slabs on a sidewalk, causing damage. Maintenance may involve removing the roots or the entire tree. 
• Replacements. Heavily damaged sidewalks may need to be removed entirely and replaced with new slabs. 

Why is HOA Sidewalk Maintenance Important?

Maintaining HOA sidewalks is crucial for several reasons. 

1. Safety

One of the biggest reasons maintenance is essential is that neglect can lead to accidents. Let’s say a sidewalk hasn’t been maintained in years. There’s overgrown vegetation and cracks all over the area. Someone could trip and fall on the sidewalk because of all the damage. 

2. Liability Protection

If someone passes by, trips, and falls on the sidewalk, they could sue the HOA or homeowner responsible for maintenance. This can lead to big financial losses for the HOA or the homeowner. Moreover, it could even damage the neighborhood’s reputation. People won’t be as eager to buy homes in the community. 

3. Accessibility

Sidewalks are pathways that everyone in the neighborhood uses. If a sidewalk sustains too much damage, it may limit accessibility for homeowners. While it may not be as much of an issue for regular residents, those with limited mobility or other disabilities could have a much harder time. 

4. Halt Further Damage

Minor cracks and water pooling may not be alarming to some people. Nevertheless, they’re a sign that the sidewalk already has issues. Left unaddressed, these issues could lead to more damage and bigger problems in the future. 

If the community waits to fix the issue, it can result in accidents and lawsuits. Moreover, worsening the problem will likely lead to additional repairs and expenses. 

5. Curb Appeal

Homeowners associations exist to ensure that the neighborhood looks appealing to both homeowners and outsiders. That’s why they are so strict about creating and enforcing architectural guidelines. The community must always look neat and enticing to potential buyers.

HOA sidewalk maintenance is a big part of protecting curb appeal. After all, who would want to live in a neighborhood with dirty or cracked sidewalks? It wouldn’t be a very inviting sight.

6. Property Values

Curb appeal and proper maintenance are factors that buyers consider when buying a home. Everyone wants to live in a clean, beautiful, and well-kept neighborhood. If the HOA or homeowners neglect to maintain the sidewalks, the community’s reputation and property values could be jeopardized. 

Signs of a Damaged Sidewalk

Maintaining a sidewalk is hard work. How do you know if a sidewalk is not in good condition? Here are a few warning signs to watch out for:

• Uneven Surfaces. Part of the sidewalk may settle, making the surface uneven, posing a tripping hazard for passersby.
• Sinking or Raised Slabs. Raised or sunken slabs can be caused by erosion or tree roots. 
• Cracks. The soil under the sidewalk may settle, placing more stress on the concrete slab. Tree roots may also raise the slabs and cause them to crack.
• Discoloration. If the sidewalk looks coarse, discolored, timeworn, or bleached, it may no longer be in the best condition. The sun’s UV rays can cause fading, discoloration, and oxidation. 
• Snow or Ice. Excessive snow or ice forming on top of sidewalks may cause water damage and erosion in the soil underneath.
• Loose Concrete. Loose concrete could indicate that the sidewalk’s structural integrity has been compromised.
• Overgrown Vegetation. When weeds or other vegetation grow on or around the sidewalk, it has already been compromised. Continuous growth may lead to even more damage in the future. 
• Water Pooling. If water pools in parts of the sidewalk after heavy rain, it can damage the concrete and soil underneath. It’s also a sign that the sidewalk already has issues. 

How to Repair HOA Sidewalks

If the sidewalks along the HOA are damaged, the association or homeowner should contact a contractor to fix the issue. Here are some repairs the contractor might make should the sidewalks be damaged.

1. Concrete Leveling

Concrete leveling (also called concrete raising or lifting) lifts the settled slabs to level them with the rest of the sidewalk. It’s a cost-effective way to ensure the sidewalk is even without requiring a total replacement. The method solves minor problems like tree roots lifting sidewalks, trip hazards, and uneven slopes.

2. Grinding

Uneven sidewalks can be trip hazards for passersby. The contractor may grind the sidewalk down to ensure it’s even and safe to walk on. This is a quick and affordable way to level the path. However, keep in mind that while it’s cheaper, it can also have its downsides.

For instance, grinding may make the slab thinner and weaker. It might be more prone to damage, leading to more repairs and replacements. Furthermore, it often leaves a patchy appearance that could appeal to onlookers. 

3. Adding Concrete

The contractor may add more concrete or patching compounds to eliminate tripping hazards. It allows the concrete to be more level and makes walking safer. However, it’s not a permanent solution. The concrete will likely chip off as it naturally contracts or expands. It’s also difficult to bond the existing slab with the additional concrete. 

4. Replacement

Replacing the entire sidewalk is a time-consuming and expensive process. However, it’s the most effective solution if the sidewalk is damaged beyond repair. It might be time for a total replacement if homeowners or HOAs see any crumbling, heavy cracks, or lots of tree roots raising the slabs too much. 

A Crucial Part of Maintenance

HOA sidewalks are essential parts of the community. Regardless of who is responsible, homeowners and HOA board members must ensure they’re passable and in good working condition. Otherwise, accidents, lawsuits, and reduced property values could occur. 

Personalized Property Management offers premier HOA management services to neighborhoods in Southern California. Call us today at 760-325-9500 or send us an email at info@ppminternet.com for more details!

RELATED ARTICLES:

• Different Types Of HOA Management: Which One Is Best?
• How To Make Foolproof HOA Service Contracts
• 7 Best Recruiting HOA Board Members

Homeowners associations sometimes struggle to get people to participate in meetings and vote on agenda items. Residents are busy with their schedules, after all. This is where proxy voting in HOA communities comes in. What is it, and what precautions the board must take? Let’s find out.

What is Proxy Voting in HOA Communities?

Every association has HOA voting rules, which indicate whether proxy voting in HOA communities is allowed. A proxy is an authorization from a homeowner or board member that appoints someone else to represent them at a meeting. The proxy acts as their agent and makes the vote for them. 

State law and the governing documents typically indicate who can be appointed as a proxy. However, homeowners may typically assign anyone as their representative. Homeowners should appoint someone trustworthy to ensure they do not vote against the homeowner’s wishes. 

More often than not, homeowners appoint their spouses, neighbors, or friends as proxies. Depending on the community’s rules, homeowners may appoint more than one person as their proxy. Moreover, the rules may indicate when a proxy is allowed and when it is not. 

How Do Proxies Work?

The homeowner or board member must designate their proxy in writing. Homeowners associations may create community-specific templates that residents can use to ensure uniform information submission. 

In addition, HOAs should have a standard process for establishing proxies. Residents should know to whom to send the form, what information is given, and how the proxy should vote. Furthermore, it’s important to note that designation forms should not be reused. Homeowners should create a new one for each meeting the proxy attends. 

Proxy voting forms should be clear and detailed. Generally, they should contain the following information:

• HOA name and address
• Details of the meeting, including the time and date
• Clear identification of the proxy holder
• Type of meeting (e.g. special meeting, board meeting, or annual meeting)
• Whether the proxy will be used only to establish a quorum or if the representative will vote on the owner’s behalf
• Authorization that the proxy may attend the meeting in the owner’s stead
• Date and signature of the HOA member and proxy holder

How Long Do Proxies Last?

In California, proxies last for 11 months. However, the proxy may be revoked or have a set expiry date outlined in the designation form. At most, California proxies can last three years from the execution date. Proxies have full force and effect until they expire or are revoked.

HOA members may revoke proxies by doing the following:

• Providing written notice of the revocation to the Inspector of Election
• Executing a later-dated proxy before the vote and giving it to the Inspector of Election
• Attending the meeting and requesting a voting ballot before the ballot is distributed to the proxy holder
• Delivering a ballot to the Inspector of Election before a ballot is distributed to the proxy holder

In addition, proxies are not revoked by the proxy giver’s incapacity or death unless notice of such incapacity or death has been given to the HOA before the votes have been counted.

Types of HOA Proxies

There are two types of HOA proxies:

• Directed Proxy. The directed proxy holder may only vote on the homeowner’s behalf on specific topics and issues. Homeowners may dictate how the proxy holder votes on each issue based on the homeowner’s instructions. 
• Non-Directed Proxy. The non-directed proxy holder may vote on all issues on the meeting agenda. Homeowners do not dictate how the proxy holder will vote so that the representative will vote at their discretion. 

In addition, homeowners should follow state law and the governing documents when designating their proxies. In California, homeowners must follow strict guidelines when designating a directed proxy holder. 

Which Type of Proxy is Better?

Each type of proxy has advantages and disadvantages. For one, directed proxies allow homeowners to vote exactly as they intended without influence from the proxy holder’s emotions. However, they can also be detrimental, as the proxy holder will vote according to the homeowner’s instructions regardless of any new information presented. 

For instance, the proxy holder may be instructed to vote for Candidate A in the elections. They cannot cast a different vote even if someone brings up Candidate A’s misbehavior, violations, or fraudulent actions. 

Meanwhile, non-directed proxies allow for more flexibility. Nonetheless, they might not always vote according to the homeowner’s wishes. Undirected proxies must exercise discernment and vote at their discretion, which isn’t always favorable to the original owner. 

Are Proxies a Good Thing?

Proxy voting in HOA communities can be beneficial. While there is potential for abuse, the benefits may sometimes outweigh the disadvantages. Firstly, proxy voting is useful if the HOA has trouble obtaining a quorum. Allowing proxies allows the board to conduct regular meetings and move things forward without waiting for most members to attend.

In addition, proxy voting allows busy community members to participate in meetings. Some residents may want to be more active in their community but lack time. Proxy voting gives them a chance to make their voices heard. Proxies can represent homeowners and provide the board with more input and feedback.

How to Prevent HOA Proxy Abuse

Allowing proxy voting in HOA communities can sometimes lead to abuse. In some communities, prospective board members may collect fraudulent proxies from absent homeowners to secure their vote and position on the board. This allows them to continue to run the community and even engage in illicit activities. 

How do you prevent proxy abuse? Here are some precautions to keep everyone accountable and ensure that proxy voting is always fair. 

1. Prevent Fake Proxies With Watermarks and Codes

It’s not uncommon for homeowners and board members to create fake proxy documents. This usually happens when they know some other members don’t plan to attend the meeting. They create fake proxy designation forms and sign the homeowner’s name. 

To prevent this, homeowners associations may place watermarks or serial numbers on each proxy form. This way, HOA members and directors cannot replicate the form themselves. The serial number can also indicate whether a form has already been used or is a new one. 

2. Thorough Verification of Proxies and Records

Homeowners associations can avoid fraud by thoroughly verifying proxies and applying the rules equally to all homeowners. HOAs often require residents to designate a voting representative. 

For instance, a rental property owner should designate an employee or officer as the voting representative. Make sure to keep an accurate record of people with the right to vote. It’s also helpful to enforce provisions that a person can only sign a proxy if they have voting power. 

When a proxy does attend a meeting, HOA board members should confirm that the proxy isn’t being utilized for a member at the meeting. 

3. Establish Rules

Proxies are easy to manipulate and forge. Establish rules that can minimize illicit activity. Board members should make copies of the original designation form and give them to the proxy holder. The person who will vote on their behalf must attend the meeting in person and verify their identity. Moreover, they should cast a ballot for the vote to count.

It may be wise to produce multiple copies of the designation document. This ensures the proxy votes the way the owner wants. HOAs can also provide colored ballots for proxies to easily assess the proxy’s vote. 

In addition, proxies usually cannot be transferred. Hence, if the original proxy holder designates someone else as their representative, the HOA may disallow the vote or disqualify it. Nevertheless, it’s best to consult an HOA attorney before proceeding. 

4. Consider Alternative Voting Methods

Proxy voting in HOA communities is often used when homeowners cannot attend the meeting. However, it’s not the only option HOAs have when they’re struggling to get people to vote. A good alternative is to have people vote electronically or by mail. This way, HOAs can avoid proxy abuse entirely.

Frequently Asked Questions

What’s the Difference Between Proxies and Absentee Ballots?

While proxies grant meeting attendance or voting authorization to someone else, absentee ballots allow homeowners themselves to vote through a form without attending the meeting.

What is a Proxy for Quorum?

A proxy for quorum allows the proxy holder to be counted toward the meeting’s overall attendance so the HOA can meet quorum requirements. As a result, all the discussions and votes within the meeting will be valid, preventing delayed decisions or wasted time. 

How Many Proxies Can Someone Hold?

It depends on state law, the governing documents, and the meeting rules. In some cases, homeowners may assign separate proxies for different votes (e.g., one person may be designated for elections while another may be designated for amendments). 

An Important Part of Decision-Making

Proxy voting in HOA communities is vital for several reasons. It allows community members to participate in meetings they otherwise could not, and it helps the HOA obtain a quorum more easily. Nevertheless, HOAs must be vigilant and establish rules to prevent abuse. 

Personalized Property Management offers expert HOA management services to communities in Southern California. Call us now at 760-325-9500 or send us an email at info@ppminternet.com for more details!

RELATED ARTICLES:

• How To Make Foolproof HOA Service Contracts
• What Is HOA Governance?
• Is Having An On-Site HOA Manager More Advantageous Than A Remote One?

HOA insurance is a valuable form of financial protection, especially when faced with liability or property damage. Unfortunately, most associations are unaware of the need for insurance and continue without sufficient protection.

What is HOA Insurance?

An HOA master insurance policy is the most common coverage for homeowners associations. This policy protects HOAs against insurance claims, stepping in to cover the cost of expenses related to property damage and general liability.

Insurance for Single-Family HOAs vs Insurance for Condos

Condo associations are physically structured differently from single-family HOA communities. Single-family homes tend to be detached, so they do not share walls, roofs, or plumbing systems. However, condominiums share walls between units, with shared roofs and pipes running in between. As such, the insurance needs of a condo association tend to differ from those of an HOA.

The Importance of Homeowners Association Insurance

Insurance is critical to the financial protection of any homeowners association. It ensures that an HOA or condominium association will not have to tap into its funds or spend as little of its own money as possible when faced with property damage or general liability.

For instance, if a fire burns down the playground, an HOA can file a claim with its insurance provider to cover the replacement cost. If someone slips and hurts themselves on icy pavement in a common area, insurance can cover the cost of legal fees and settlement if they decide to sue.

Without HOA insurance, an HOA board must use its operating budget or reserve funds to pay for the damages. This would severely interfere with the annual budget and deplete its reserves, causing operational hitches and taking away essential funding from other budgetary line items.

As a result, the HOA board would need to compensate for the deficit. This often involves turning to homeowners for additional funding through a special assessment. Depending on the damages, this special assessment could be astronomical, putting more financial burden on the homeowners. Other options include raising regular dues significantly or taking out a loan—both would still result in extra expenses for homeowners.

Is HOA Insurance Required?

Whether or not an HOA is required to carry insurance depends on state laws and the governing documents.

In some states, associations are statutory required to purchase insurance. Homeowners associations in California must carry insurance and include a summary of their policies in the annual budget report, as per Civil Code Section 5300. Similar laws exist in other states.

Apart from state laws, an HOA’s governing documents will also outline the needs and requirements for insurance. If state law does not require insurance, an HOA’s governing documents likely will. In addition to the requirement, the CC&Rs and bylaws usually dictate the type of coverage and amount of insurance an HOA must have.

HOA Insurance vs. Homeowners Insurance

It is important to understand that an HOA insurance master policy differs from homeowners insurance. HOA insurance protects the association itself, while homeowners insurance protects individual homeowners and their properties.

In single-family communities, the HOA’s insurance policy will likely not cover damage to or liability arising from individual homes. For those, homeowners must purchase their policies. In condo communities, though, the condo’s master policy may cover the shared elements, such as walls between units and roofs.

What Does HOA Insurance Cover?

Coverage will ultimately depend on the type of insurance policy an HOA purchases. That said, HOA insurance generally covers physical property damage and general liability.

Property Damage

Property damage coverage will cover the cost of repairs or replacement for physical damage to an HOA’s common areas. These include clubhouses, parks, playgrounds, swimming pools, and more.

In condo associations, property damage coverage extends to the exterior of the condo building and covers the cost of repairs and replacement for shared interiors such as basements and stairwells.

It is essential to note that this policy usually doesn’t cover general wear and tear. Property damage coverage applies more to damages arising from natural disasters, storms, fires, and vandalism. Insurance providers typically offer separate coverage for earthquakes.

General Liability

General liability coverage will cover the cost of legal fees and damages for lawsuits against the HOA after someone gets hurt on common property. For example, if visitors slip and injure themselves on a slippery sidewalk in the parking lot, they may sue the HOA. In this case, general liability can cover legal fees and settlement costs.

Lawsuits can be costly and time-consuming. With general liability coverage, an HOA can save a hefty sum of money and avoid charging special assessments to cover the expenses.

What HOA Insurance Doesn’t Cover

While insurance is beneficial to any community, it does not cover everything. Here are some of the things that a typical HOA insurance policy will not cover:

• Property damage to individual homes or units
• Liability for injuries that occur on individual homes or units
• Flood insurance coverage
• Earthquake insurance coverage
• Damage to personal belongings
• Stolen personal belongings (whether in common areas or individual homes/units)
• Property damage or liability caused by a person
• Claims that go over the limitations of the policy

Bare Walls vs. Walls-In vs. All-In Condo Master Policy

Insurance usually comes in the form of a master policy for single-family HOAs. For condo associations, though, there are three insurance policies to choose from bare walls, walls-in, and all-in.

Bare Walls Coverage

Bare walls coverage only covers the fixed items within the condo units. These include appliances, cabinets, wall coverings, countertops, and wall coverings, among other things. This type of coverage also does not cover any upgrades the owner might make. Instead, the bare walls policy only covers replacement and repairs up to the drywall. 

Due to its limited coverage, this is the cheapest form of insurance for condo associations. The association does not insure the interior of an owner’s unit, except for unfinished walls, floors, and ceilings.

Moreover, if a flood or fire occurs in a unit, bare walls coverage does not pay for improvements. These include appliances, cabinets, wall coverings, fixtures, interior partitions, and floor coverings. The owner’s insurance policy will have to cover the cost of these items.

Some condo associations settle for bare walls coverage due to its low cost. However, some lenders will not approve loans if the association only has limited coverage.

Walls-In Coverage

Also known as single-entity coverage, this type covers all non-personal property items inside condo units. These include appliances, cabinets, wall coverings, countertops, and floor coverings. However, any upgrades the owner makes do not fall under this coverage.

All-In Coverage

Also known as all-inclusive coverage, this type of coverage covers all non-personal property items and any upgrades the owner makes. For example, if the owner changes the countertops from marble to granite, the all-in coverage can pay for it. Due to the extensive coverage, the all-in policy is the most expensive.

How Much Does HOA Insurance Cost?

The type and coverage of an HOA’s insurance policy will determine its annual cost or premium. Additionally, different HOA insurance companies may offer various price points in places where insurance costs are not highly regulated. As such, it is a good idea for an HOA or condo association to shop around before deciding on a provider and policy.

In general, though, HOA insurance can cost between $200 and $500 per month. Some more comprehensive policies can go beyond that, up to $1,000 or more. 

Many HOA boards let the cost of insurance stop them from purchasing the best one that meets their needs. However, it is essential to remember insurance’s role in an HOA’s financial protection, especially in the long run.

Other Types of HOA Insurance

Apart from a master policy, there are other types of insurance an HOA should consider purchasing. These include the following:

• D&O Insurance. This protects board members from personal liability. If they’re sued for decisions made in their capacity as HOA leaders, this policy covers legal defense costs. It’s essential to attract qualified individuals to serve on the board without fear of personal financial risk.
• Workers’ Compensation. HOAs with employees or contractors may require workers’ compensation insurance. This coverage provides medical benefits and wage replacement to injured workers. Depending on local laws, it’s often mandatory and helps the HOA avoid costly legal fees from workplace injury claims.
• Umbrella Liability. Umbrella liability insurance provides additional coverage when claims exceed the limits of standard policies. It’s an extra layer of protection for severe incidents, such as accidents involving large sums of money. This type of insurance ensures the HOA won’t face financial ruin from a major lawsuit.
• Crime and Fidelity. This protects the HOA from theft, fraud, or embezzlement losses. This policy can cover the loss if funds are stolen by board members, employees, or even third parties. It’s especially important for associations that handle large sums of money.
• Flood Insurance. If the HOA is in a flood-prone area, flood insurance is crucial. Standard property insurance policies typically exclude flood damage, making separate flood coverage necessary. It can protect the community from significant financial losses after a natural disaster.
• Earthquake Insurance. In regions prone to earthquakes, this coverage is vital. Like flood insurance, earthquake damage is not covered under most property policies. Earthquake insurance helps repair or rebuild structures affected by seismic activity, ensuring the HOA’s financial stability.

All Things Considered

Every community should have HOA insurance, whether or not state laws or their governing documents require it. Insurance plays a critical role in protecting an HOA’s financial interests. Additionally, it helps ensure that homeowners don’t shoulder additional financial burdens when the unthinkable happens.

Personalized Property Management offers HOA management services around Southern California, including assistance with insurance management. Call us at 760-325-9500 or email us at info@ppminternet.com for more information!

RELATED ARTICLES:

• HOA Board Duties: What To Expect From Your BOD
• How Does A Leased Land In Coachella Valley Work?
• Why Do You Need A Professional HOA Reserve Analyst?

Using social media for HOAs has become quite a common practice nowadays. Given its widespread availability and reach, it has become a popular communication tool for boards and homeowners alike. However, social media has downsides, so boards should enact proper rules to govern its use.

The Pros and Cons of Using Social Media for HOAs

There is no denying that the rise of social media has brought interconnectivity to a whole new level. With the click of a button, people can share information, photos, and videos at a rapid rate.

Many homeowners associations have used this tool to improve communication with residents. However, as with a lot of things, social media brings with it several pros and cons. It is essential to analyze these pros and cons so that boards can make an informed decision on whether or not to incorporate social media into their communication arsenal.

Pros of Social Media for HOAs

The pros of social media in HOA communities include:

• Improved Communication. Social media platforms make it easier for HOA boards to communicate quickly and effectively with homeowners. Announcements, reminders, and updates can be posted instantly, reaching a large audience.
• Increased Engagement. Social media can foster a sense of community by encouraging homeowners to interact with the board and each other. It can be a space for discussions, sharing ideas, and addressing concerns.
• Cost-Effective. Social media is free or low-cost compared to other communication methods, such as printed newsletters or mailed notices. Therefore, it is a budget-friendly tool for HOAs.
• Convenience. Homeowners can access information at any time, from any location. They can also respond or ask questions more easily than traditional communication methods.
• Faster Feedback. Homeowners can provide immediate feedback on issues or suggestions, allowing the board to address concerns promptly.

Cons of Social Media for HOAs

The cons of social media in HOA communities include:

• Risk of Misinformation. With many homeowners participating, there’s a higher chance of spreading rumors, misinformation, or unverified claims. This can create confusion, conflict, and tension among homeowners and board members.
• Lack of Privacy. Social media discussion may not be private or secure, raising concerns about confidentiality. This is particularly concerning when sensitive topics like legal matters or personal grievances are involved.
• Moderation Challenges. Managing the tone and conduct of discussions can be challenging. Improper moderation can lead to potential disagreements or heated exchanges among members. Boards may need to appoint moderators to ensure conversations stay civil and productive.
• Exclusion. Not all homeowners may use social media or be comfortable with technology, especially in communities with technologically challenged residents. Relying heavily on these platforms can leave some people out of the communication loop.
• Liability Issues. Inappropriate comments or posts made by homeowners on an HOA’s social media page could result in legal complications. These include defamation claims and violations of HOA policies, among other things.

How to Use Social Media for HOAs

Social media has several benefits. While there are also disadvantages, many of them can be curbed with the right practices. Boards who wish to use social media for their community should keep the following things in mind.

1. Set Up Objectives

Before starting, the HOA should define its social media goals. These could include sharing updates, promoting community events, or gathering feedback. Clear objectives help guide content creation and ensure the effective use of the platform.

2. Select a Platform

Choosing the right platform depends on the community’s needs. Many have a homeowners association Facebook page. These are popular for HOAs due to their ease of use and privacy settings. Additionally, Facebook remains the leading social media platform in the United States. This means most of the HOA’s members likely already have access to it.

Other platforms like Nextdoor or private forums may also work well, depending on homeowner preferences. Given the nature of HOAs, platforms such as Instagram and TikTok are not best suited for communicating with homeowners. They are better used as promotional tools.

3. Establish and Enforce Rules

It’s essential to set guidelines for participation. Establishing clear rules ensures respectful communication and keeps discussions focused. The HOA should post these rules on the page and enforce them consistently to maintain a positive environment.

Moderators should monitor the content that homeowners post. If a post or comment goes against the rules, moderators should take swift action to delete it. They may even warn the poster or commenter not to do it again or face a temporary ban.

4. Appoint Admins

Managing a social media page requires oversight. The board should appoint a few trusted individuals as administrators or moderators. Admins monitor content, approve posts, and step in if discussions become heated or off-topic.

Of course, board members can do this themselves if they choose. Admin or moderator work tends to be demanding, though, especially if anyone can post or comment at any given time. The workload can also multiply depending on the number of residents in the community.

5. Focus on the Facts

HOAs should always prioritize factual and relevant information in posts. This includes updates on maintenance schedules, community events, or rule changes. Avoiding opinions helps prevent misunderstandings or conflicts among homeowners.

6. Engage Homeowners

Social media works best when there’s active engagement. HOAs can encourage homeowners to participate by asking for suggestions, creating polls, or inviting discussions. This keeps the community involved and fosters a sense of connection.

Sometimes, getting homeowners out of their shells takes a while or some effort. Some homeowners may feel shy or apprehensive about communicating with their neighbors in person at meetings. These people may benefit from the decreased pressure that social media allows. Before long, these homeowners may feel more comfortable talking to others and participating in HOA activities.

7. Prioritize Confidentiality and Privacy

While social media promotes transparency, HOAs must be mindful of privacy. Personal information, disputes, or sensitive topics should not be shared publicly. It’s important to remind homeowners that social media is for general information, not for private matters.

HOA Social Media Rules

Board members must establish a policy to govern the use of social media in their community. At a minimum, an HOA should tackle the following guidelines.

1. Identify Permitted Content

The HOA board should determine what type of content can be posted, commented on, or shared on the platform. A general rule of thumb is that content should be limited to topics related to the association. Examples include meeting dates, new rules or changes, deadline reminders for HOA dues, and community events.

Even if the HOA has a website or owner portal where members can access important documents, it’s still wise to post links to them on the platform. This will give homeowners easy access to the HOA’s governing documents, application forms, meeting minutes, and more.

Of course, the HOA’s social media page tends to stagnate when there’s nothing worth announcing, which may negatively impact involvement. To keep engagement up, the HOA can share helpful content such as maintenance reminders, gardening tips, cleaning advice, etc. The board can also share photos from recent community events.

2. Identify Prohibited Content

The HOA board should establish what type of content is permitted and what is not. All members—homeowners and board members alike—must not post prohibited content.

Prohibited content can vary, but they generally include the following:

• Profane or violent content
• Defamatory or offensive content
• Personal attacks
• Disruptive content with the intent to abuse, intimidate, threaten, or harass (example: trolling)
• Links to websites or files that contain malware
• Spam
• Confidential information (including HOA-related confidential information such as contract negotiations and ongoing litigation)
• Click baits
• Sexual content or content that is not safe for work (NSFW)
• Discriminatory content or content that encourages discrimination
• Illegal content or content that promotes unlawful, harmful, or offensive acts
• Personal information without the consent of the party
• Photos of children without the consent of the parents
• Trademarked or copyrighted content
• Promotional content without the approval of the moderator or HOA board
• Personal opinions are made to look like the association’s opinions
• Rants
• Gossip, hearsay, and speculation
• Political bias
• Criticism

Violating the rule on prohibited content should carry a stern penalty. 

Moderators should remove the post or comment immediately, requiring no prior notice to the poster or commenter. Better yet, the HOA can adjust the settings so that moderators have to approve content before they are posted. However, this may not be possible for comments.

Depending on its severity, the first offense can result in a strict warning. However, if the homeowner violates the rule again, the HOA should consider removing the offender from the social media page or group. Alternatively, the HOA can revoke their ability to post content or comment on posts.

3. Establish Controls

Finally, it is essential to establish internal controls for the social media page. These controls should answer the following questions:

• Who can access or join the HOA’s social media page/group?
• Who can approve or deny posts?
• Are there going to be offline hours?
• Who can post or comment?

A Double-Edged Sword

Using social media for HOAs is inevitable, especially with the prevalence of technology in our day-to-day lives. However, boards need not use social media if they feel it’s not best for the community. That said, if the board does opt to make a social media page for the HOA, it is pertinent to use it wisely and establish a social media policy.

Personalized Property Management offers HOA management services around Southern California, including assistance with owner communications. Call us at 760-325-9500 or email us at info@ppminternet.com for more information!

RELATED ARTICLES:

• How Can The Board Address HOA Noise Complaints
• Selective Enforcement In HOA: What Can Homeowners Do?
• What Is HOA Governance?

The HOA election of officers is an important part of every homeowners association’s governance. It allows homeowners to elect competent leaders who will make decisions in the community’s best interest. Therefore, knowing how board elections work is equally critical to an HOA’s success.

What is the HOA Election of Officers?

Homeowners associations share many similarities with corporations. Like corporations, HOAs are governed by a board of directors elected by the shareholders. In the case of HOAs, board members are elected by the homeowners.

The election of officers is important when one or more board seats open up. This usually happens when a board member’s term expires, but it can also arise from the removal or resignation of a board member. The HOA’s governing documents, specifically the bylaws, dictate the timing, requirements, and election procedures.

For most communities, the elections occur at the annual membership meeting. Here, homeowners cast their ballots for the candidates they wish to elect into office.

HOA Board Elections: Understanding the Process

Elections in an HOA follow the general sequence below.

1. Select Proposed Voting Deadline

First, the HOA must choose a date for the voting deadline. This date should be 105 days after the board intends to mail the nomination procedures and deadline. The voting deadline is often the same date as the annual meeting or when the HOA will count the ballots.

Existing board members must identify which positions will be up for election. Board terms are often staggered, which means that board seats won’t all open up at the same time. Staggered terms ensure that the board is not entirely empty simultaneously and allow a mix of new and experienced directors.

Associations should expect elections to take 105 to 120 days.

2. Nomination Procedures

As per Civil Code Section 5115, an HOA must send a general notice (or individual notice upon request) of nomination deadlines and procedures at least 30 days before the nomination deadline. If an HOA intends to disqualify a candidate, they must provide them with a chance to participate in internal dispute resolution first. 

Associations can only disqualify a person from nomination if the person has been allowed to engage in internal dispute resolution. (Civ. Code § 5105(e).)

During this time, the HOA must also draft the electoral roll. The electoral roll lists all eligible voters in the HOA community. It also includes their identifying numbers (such as lot number or member number), addresses, and contact information. Boards should ensure that their electoral roll is updated. This way, all current homeowners get a vote.

3. Announce and Nominate

The next step is to announce the elections using the appropriate communication channels. Normally, the HOA board should also provide notice ahead of time with a specific timeframe.

At this point, the HOA should also open nominations. Nominations can occur in a few ways: floor nominations, self-nominations, and write-in nominations. Once the HOA establishes its pool of candidates, it can announce the names of those in the running. This is also a good time to create the ballots.

4. Select the Inspector of Elections

The HOA must appoint an election inspector. This inspector must be an independent third party with no conflicts of interest with the association and its election. The HOA must choose an inspector before sending the pre-ballot notice.

5. Send the Pre-Ballot Notice

At least 30 days before distributing the ballots, the HOA must send a general notice consisting of the following information:

• The date, time, and physical address to mail or hand-deliver the votes to the inspector/s
• The date, time, and place of the meeting for counting ballots
• Names of the candidates who will appear on the ballots

6. Review for Accuracy

The HOA must give members and candidates an opportunity to review their information as it appears on the candidate lists and electoral roll at least 30 days before distributing the ballots. The inspector of elections must then correct the inaccuracies or add any omitted information within two (2) business days.

7. Distribute Ballots

The HOA or inspector of elections must mail or hand-deliver the ballots to every association member at least 30 days before the voting deadline and at least 30 days after sending the pre-ballot notice. 

The inspector must also deliver the election rules individually or by posting them online. If the inspector posts the rules online, the website address (URL) must appear on the ballot and inform the member that they may find the rules there.

8. Annual Meeting

The HOA must establish a quorum at the annual meeting and call the meeting to order. At this point, those who have yet to cast their ballots may do so. After that, the board or inspector must close balloting.

At this point, the inspectors can begin opening and counting the votes. They will then announce the results. The HOA must post the results within 15 days.

California HOA Election of Officers

It is essential to note that election procedures and requirements can vary from one community to another. State laws and individual governing documents can also influence how elections proceed. In California, there are certain rules and regulations that HOAs must know.

According to Civil Code Section 5105, all HOAs must adopt election rules consisting of the following:

• Procedures for nominating candidates
• Qualifications of candidates
• How the HOA must select independent third parties as inspectors of election
• Access to the HOA’s media channels during campaigns
• Use of the HOA’s common areas during campaigns
• Procedures for secret balloting
• Uncontested elections procedures
• Procedures for recall elections
• Election materials retention

Key Points

Here are some key points in to know about the HOA election of officers in California:

• HOAs must allow homeowners to nominate themselves as candidates for election.
• An HOA may establish a nominating committee. However, this committee does not have the power to reject qualified candidates.
• An HOA may not exclude candidates based on minor technical violations of the nomination process. However, it may exclude candidates who fail to submit their nomination on or before the deadline or who don’t meet the director qualifications.
• HOAs must prepare a candidate list and have candidates review them for accuracy at least 30 days before distributing the ballots. The inspector of elections then has two (2) business days to correct any inaccuracies.
• An HOA must disqualify a candidate if they are not an association member.
• Certain HOA director qualifications are no longer permissible in California. These include requiring the member to have no violations or unpaid fines, disallowing candidates who are in litigation with the HOA, disallowing candidates who have been convicted of a felony within the last 10 years (provided the HOA’s fidelity bond goes unaffected), disallowing candidates who are second- or third-tier registered sex offenders (with the same fidelity bond caveat), and having minimum age or residency requirements, particularly for 55+ communities.
• An HOA must hire an independent third party to assume the role of inspector of elections.
• HOAs must use secret ballots for elections, as per Civil Code Section 5100. Additionally, they must deliver the ballots to every member at least 30 days before the vote deadline.
• Associations need not use balloting for uncontested elections. Instead, they can use election by acclamation.

HOA Elections Frequently Asked Questions

Here are the answers to the most frequently asked questions about HOA elections.

How often do HOA elections take place?

It depends on the homeowners association. However, HOA elections generally take place every year at the annual meeting. Boards should check their governing documents, specifically their bylaws, to ensure they understand the exact timeline and dates.

Can the HOA election of officers be electronic?

Some associations allow online or electronic voting for their elections, though this varies depending on state laws and an HOA’s governing documents. 

In California, however, HOAs must use secret balloting for board elections. The HOA must mail or hand-deliver the ballots and two pre-addressed envelopes to homeowners. Homeowners must insert the completed ballots in the first envelope before inserting them into the second envelope, which is then sealed.

Can anyone run for the HOA board?

In theory, any homeowner can run for a position on the HOA board. However, some HOAs may have candidate qualifications. It is essential to check the HOA’s governing documents to understand who can run.

In California, an HOA can disqualify a candidate if they are delinquent on their regular dues, have a joint ownership interest with another board member, have been owners for less than a year, or have a past criminal conviction that would prevent the HOA from getting a fidelity bond or terminating its existing policy.

Are there term limits for board members?

Yes, board members usually have term limits in an HOA. It is important to read through the HOA’s bylaws to understand specific term limits.

Can renters vote?

Whether or not renters can vote depends on the association’s bylaws. More often than not, though, only homeowners receive the right to vote in the election. However, a homeowner may assign their renter as their proxy if the association allows proxy votes.

Assistance With HOA Elections

The HOA election of officers can be confusing, with many requirements and conditions. Still, boards must understand how elections work to avoid an invalid election. An HOA management company can assist boards with carrying out legally compliant election procedures.

Personalized Property Management offers HOA management services around Southern California, including assistance with board elections. Call us at 760-325-9500 or email us at info@ppminternet.com for more information!

RELATED ARTICLES:

• HOA Board Duties: What To Expect From Your BOD
• HOA Meeting No Quorum: What Happens Now?
• 7 Best Recruiting HOA Board Members

Managing a planned community can be challenging. It involves not only dues collection but also common area maintenance, administration, financial management, and community governance. Over the years, numerous types of HOA management have emerged to address planned communities’ concerns and daily operations.

What are the Different Types of HOA Management?

There are three main types of HOA management:

1. Self-Management

Self-management involves a board of directors overseeing the entirety of the community’s operations. The community does not use an HOA manager or professional management company. Instead, the board handles everything from member disputes to budget preparation and vendor management. 

2. Association Employed Manager

Homeowners associations often seek outside help handling community affairs. This is especially true for communities with many amenities or homeowner properties. One way to get professional help is by hiring an independent HOA manager to handle the board’s workload.

In this scenario, the HOA manager is tasked with certain duties, such as dues collection, maintenance management, and vendor relationship management. The HOA manager is considered an employee who receives a salary and benefits. 

It’s important to note that HOAs must consult their governing documents before hiring an HOA manager. The documents often outline how the hiring process should proceed, how the payment process should be handled, and what requirements should be met to hire an independent contractor. 

3. HOA Management Company

HOA management companies are firms dedicated to helping community associations with their operations. They fulfill several duties of the board, including accounting, financial management, vendor management, maintenance, and dues collection.

Different management companies will offer different services. Some may offer full-service community management, while others only offer remote or financial management services. Regardless, communities can often hire an HOA management company to fulfill one or more of their needs.

What Services Does Professional Management Offer?

Professional management provides numerous services to homeowners associations. Here is a rundown of the most common services offered.

1. Administration

HOA management companies and community managers often take charge of administrative work. This can include, but is not limited to, the following:

• Vendor and work order management
• Homeowner and board member communication
• Rule enforcement
• Database and document management
• Violation processing, fines, and charges
• Invoicing and dues collection
• Architectural review applications
• Website maintenance
• Common area scheduling and coordination

2. Board Guidance

Professional management can guide the board members on all HOA operations and activities. This can include the following services:

• Board meeting scheduling, preparation, and facilitation
• Recordation and distribution of meeting minutes
• Financial, policy, legal, and insurance advice
• Liaison for the board
• New board member training
• Documentation and reporting
• Annual election oversight

3. Financial Management

HOAs often need help with accounting and financial management. With a professional manager or management company, HOA boards can outsource all financial tasks. They no longer have to worry about managing bank accounts, preparing budgets, filing taxes, auditing reports, preparing financial statements, or collecting dues. Moreover, professional managers can even coordinate reserve studies and handle insurance. 

4. Maintenance

HOAs often have trouble with maintenance — especially if the community is large or has several facilities. The HOA management company or community manager can handle all of the upkeep and related tasks, including the following:

• Vendor bid collection and screening
• Contractor insurance and licensing oversight
• Routine inspections
• Management of maintenance requests
• Maintenance plan preparation and scheduling
• Delegation of maintenance requests to respective vendors
• Oversight of contractor work

5. Legal Advice and Representation

HOA management professionals often provide expertise in legal disputes and compliance issues. They can represent the board whenever there’s a lawsuit within the community and advise the board on what to do if there’s an internal dispute within the neighborhood.

Industry professionals can also serve as legal advisors when there’s a problem within the HOA. They can prevent issues from escalating or reaching court, keeping the HOA’s reputation in check and allowing the community to find resolutions quietly. 

Pros and Cons of the Types of HOA Management

The different forms of HOA management come with various pros and cons. They offer varying degrees of flexibility, responsibility, and financial commitment. Here are the pros and cons of each to help you decide which one is best for your community.

Self-Management

Pros	Cons
Lower fees	Requires time, effort, and expertise
Complete control over operations and projects	Lack of follow-through
Less restrictive rules	More difficult to resolve disputes
Fosters a tighter community	Properties may be harder to sell

Self-managed associations offer two main advantages: complete control and lower HOA fees. The former is self-explanatory, as the board can oversee all of the community’s operations. They govern the community’s capital improvements and often have less complex procedures for voting on community decisions. 

As a result, the community members have more say in the HOA’s projects. This fosters a tight-knit community with less restrictive rules. Moreover, self-managed HOAs have lower fees since no HOA management fees are covered.

On the other hand, self-management can be challenging as the board must devote a lot more time and effort to governance. The board’s lack of experience and expertise may also result in a lack of follow-through regarding maintenance. They may not be as good at resolving community disputes, either. These may deter potential buyers as they must invest more time and effort into the community.

Association Employed Manager

Pros	Cons
Better knowledge and expertise	Additional insurance policies
Simplified vendor management	Employee status
Expert advice on governance
Experience in HOA management

HOAs that employ association managers enjoy many of the benefits of professional expertise. HAO managers often have the knowledge, experience, and expertise to help communities succeed. They can often support the board in areas where they need the most help, like financial management, community governance, and rule enforcement. 

In addition, HOA managers can help you simplify vendor relationship management. HOA managers can act as a liaison between the board and contractor. They can also collect vendor bids, screen potential candidates, and help the board make a good hiring decision.

However, HOA managers often require additional insurance to protect the community from liability. For example, the community may need to purchase workers’ compensation coverage or a liability policy for employees in case of accidents or lawsuits.

Finally, contracted managers may be regarded as employees under state law. In this case, the HOA may need to meet specific obligations like payroll withholdings, employee benefits, and sick leave.

HOA Management Company

Pros	Cons
Saves time and effort	Higher HOA fees
Access to multiple industry professionals	Less involvement from the board
Vendor connections
Management Software

Hiring HOA management companies is a popular choice among planned communities. They offer several benefits that other types of HOA management do not. One of the biggest advantages is that management companies save the board time and effort.

While HOA governance is essential, the board members don’t always have the time to devote to community management. They have their own lives and careers, after all. With an HOA management company on board, the directors can have better peace of mind knowing all their obligations are being fulfilled carefully.

In addition, HOA management companies have an entire team of professionals with experience working with HOAs. These professionals are often required to hold certifications, complete training, and gain experience before they work with HOAs. This means communities can work with industry professionals who can solve most of their complex problems.

Furthermore, HOA management companies have deep connections with skilled vendors. They can connect clients with various contractors, such as construction companies, landscapers, and even HOA attorneys.

Finally, HOA management companies often have access to resources like HOA software, accounting systems, and online portals. With these tools, the HOA can streamline its processes and enhance the community’s experience. 

However, HOA management companies do take away a lot of control. While the board is still in charge of making big decisions, it is less involved in day-to-day operations, which can be challenging for some board members. 

Moreover, management companies have one big drawback: they cost a lot. Nevertheless, the HOA may be able to save money in the long term because management companies can prevent the board from making costly mistakes.

Which is Best for Your Community?

There is no one-size-fits-all answer to HOA management. Different communities will have different needs and financial capabilities. 

For instance, if an HOA consists of a handful of lots, it might make more sense to go the self-managed route. It costs less, and there are fewer common areas to maintain. The HOA may be more manageable even if the board members are the only ones overseeing operations. 

Meanwhile, HOAs with more members and facilities may need professional help. Managing communities like these might not be feasible — even if the board comprises a dozen members. Moreover, they often have more complex processes and procedures that require expertise and experience.

Find a Reliable HOA Management Company Today

Homeowners associations should consider their needs when deciding between the different types of HOA management. If your community has decided to hire an HOA management company, hiring a reliable one with years of experience only makes sense.

Personalized Property Management is just the right choice for communities in Southern California. We have years of experience working with communities in the area. Our team is familiar with the ins and outs of community management — and the state laws that govern HOAs. Call us at 760-325-9500 or email us at info@ppminternet.com to know more!

RELATED ARTICLES:

• What Is HOA Governance?
• Setting Limits For HOA Committees
• 7 Best Recruiting HOA Board Members

Homeowners associations are known for having well-maintained shared spaces and common areas. In fact, it’s the main selling point of living in a planned community. What are the HOA maintenance responsibilities you should be aware of? Here is what board members and community residents need to know. 

What are HOA Maintenance Responsibilities?

Two things dictate HOA maintenance responsibilities: state law and the community’s Declaration of Covenants, Conditions, and Restrictions (CC&Rs). 

States often have dedicated laws governing planned communities. These laws generally outline how a planned community is created, what restrictions can be in place, and how it should be managed. 

As you might expect, they also indicate what the HOA is responsible for maintaining. For example, California law generally states that, unless otherwise provided in the governing documents, HOAs are responsible for maintaining the common areas while homeowners are responsible for separate interests and limited common elements.

Apart from state law, the community’s CC&Rs also outline what the HOA must maintain and what homeowners are responsible for. While these can vary between associations, HOAs are typically required to maintain the following:

1. Common Areas

HOA community maintenance usually includes the common areas. But, what are common areas anyway? Common areas typically refer to HOA amenities, facilities, and properties that all unit owners can use. For example, HOA parks, gyms, clubhouses, and fitness centers all fit this category. Shared pathways like sidewalks and private roads are also included. In condominiums, these also include hallways and elevators.

HOA maintenance responsibilities typically encompass the following:

• Inspection. Homeowners associations are responsible for periodically inspecting the common areas to check for damages. 
• Cleaning. HOAs are responsible for regular cleaning of all common elements and shared spaces.
• Repair and Maintenance. HOAs must conduct regular maintenance activities to ensure each facility is in good condition. The association is also in charge of repairs should any damage occur to the common areas.
• Infrastructure. HOAs are often required to maintain shared infrastructure like walkways, sidewalks, private roads, and parking lots. They are responsible for fixing any cracks, potholes, or water damage they find in these areas.
• Utilities. Homeowners associations cover the cost of repairing and maintaining utilities like sewage, plumbing, and electrical systems.
• Landscaping. HOAs are responsible for the landscaping in each common area like parks and community entrances.

2. Limited Common Areas

HOA maintenance fees may also cover limited common areas, depending on the provisions of the governing documents. Limited common areas, also known as exclusive-use common elements, are shared spaces that are only accessible to specific homeowners. These types of spaces are most common in condominiums.

For example, a condominium may have a shared balcony only accessible to units on one side of the building. In this case, the shared balcony is considered an exclusive-use common area that the HOA may maintain. 

It’s important to remember that the governing documents may have different requirements when it comes to limited common area maintenance. In some communities, these spaces are left in the care of the HOA. Meanwhile, other communities assign maintenance responsibility to the unit owners who have access to these areas. 

3. Exterior Maintenance

Homeowners associations are also in charge of HOA exterior maintenance. This means they are responsible for maintaining the structures and exteriors of common components and buildings. These include sidings, roofs, and exterior walls that are not a part of separate interests. Exterior maintenance is most common in condominium associations. However, it also applies to structures in single-family and townhome communities that have shared buildings.

What Should Homeowners Maintain? 

Homeowners are not free from maintenance obligations. Just like the HOA, they’re required to maintain their separate interests. Separate interests refer to property owned exclusively by unit owners, such as apartments, condominium units, lots, and houses. Moreover, they may include the spaces surrounding a home, like the front and back yards and driveways. 

In some cases, homeowners associations will offer landscaping services to ensure individual yards and lawns look pristine. However, this is not always true. Homeowners should check the governing documents to verify what services the HOA will provide. 

What About Damages Caused by Members?

You might think that all HOA repair responsibilities for the common elements fall on the association’s shoulders. However, if a member causes the damage, the person responsible may vary.

In these cases, the HOA’s insurance may cover the cost of repairs and maintenance. However, state law also has certain regulations that dictate who may be held responsible. In California, community associations may charge a reimbursement assessment to the homeowner responsible for the damage. This means that the homeowner may need to pay for the repairs if they, their guest, or their tenant damages the common elements. 

Who is Responsible for Water Damage?

Water damage is tricky to resolve as the root cause can be hard to pinpoint. Generally, who is responsible for water damage depends on where the damage has occurred. HOAs are usually responsible for water damage in the common areas. Likewise, homeowners must take care of water damage in their own homes.

In some instances, the HOA or homeowner may be responsible for water damage if it resulted from their negligence. If the water damage started from either party’s area of responsibility, it may also be the HOA or homeowner’s responsibility. However, this is not always the case, and it’s usually best to handle these issues on a case-to-case basis. 

Insurance Responsibilities

Damages to the common elements are inevitable. Yes, they can happen due to the HOA’s or homeowners’ negligence. Nonetheless, they can also occur because of natural disasters or regular wear and tear. Regardless of the cause, the HOA has a responsibility to obtain ample insurance to avoid levying special assessments.

In fact, some laws require associations to obtain HOA insurance to cover the cost of property damage and liability claims. The association’s governing documents may also mandate the board to maintain sufficient coverage to prevent the HOA from levying hefty special assessments. 

Who Pays for Maintenance?

The association has responsibility for HOA maintenance. The board is in charge of inspection, regular cleaning, upkeep, repairs, and replacements. However, while the HOA is responsible for conducting all these activities, the association will have to draw funds from homeowner assessments.

This means that, in essence, the homeowners themselves are paying for all the upkeep. Every resident shares the financial responsibility by paying their monthly dues to the HOA. This money is used for common area maintenance and to fund the HOA’s other operations. 

What Should Homeowners Do if the HOA Neglects Maintenance?

Homeowners pay their monthly dues expecting the HOA to meet all their maintenance obligations. However, there are times when the board is negligent or fails to fulfill its maintenance obligations. What can homeowners do in that case? Here are some steps you can take:

1. Review the Governing Documents

Homeowners should first review the governing documents to verify what the HOA is responsible for. They should check whether or not the HOA is indeed being negligent or if they are simply maintaining only the facilities the HOA is responsible for. Moreover, the governing documents may contain procedures for reporting maintenance issues.

2. Report the Maintenance Issue

Homeowners should first report the maintenance issue to the board. The HOA may have simply failed to notice the problem during their regular inspections. Take photos with timestamps and dates and send them to the board as evidence. It may also be helpful to take a video of the issue, if possible.

If the HOA does not have a proper reporting system in place, homeowners may also choose to communicate with the board directly. They may also attend the next board meeting and raise the issue there.

3. Talk to the Board

The HOA board may already know about the issue and are working on a solution to fix the problem. Delays happen all the time due to a lack of funds, challenges with vendor management, a deeper problem that’s causing the maintenance issue, or simply a lack of experience on the board’s part. Whatever the root cause may be, it’s important to speak with the board to understand the root of the problem. Large, complex issues may take time to resolve.

4. Try Dispute Resolution

There are times when the HOA board fails or neglects to fulfill its duty. They may be unresponsive or simply negligent when it comes to minor maintenance issues. In these cases, the best course of action is to enter dispute resolution with the association.

Some communities may have internal dispute resolution systems in place. Homeowners should review their community guidelines and follow the proper procedure to resolve their concerns. If there are no internal dispute resolution procedures, though, the homeowner may turn to third-party mediation or arbitration.

5. Remove the Problematic Board Member

Homeowners may remove the problematic board member as a last resort. Typically, this requires a community vote and a special meeting. According to the community’s procedures, homeowners must petition to recall a director.

The Bottom Line

Board members and homeowners should be aware of many HOA maintenance responsibilities. Staying on top of these responsibilities will ensure the HOA remains compliant with state law and the governing documents. Moreover, it will ensure that the community’s property values always remain high.

Personalized Property Management offers various HOA management services to communities in Southern California. Call us at 760-325-9500 or email us at info@ppminternet.com to learn more!

RELATED ARTICLES:

• HOA Board Duties: What To Expect From Your BOD
• Here’s What To Expect When You Don’t Pay HOA Fees
• Know Your HOA Rental Restrictions Before Renting Out Your Home

Several potential HOA meeting problems can arise, and board members must learn how to deal with them. In doing so, they can hold informative, concise, and trouble-free meetings, which, in turn, helps keep the association in good shape.

How to Handle the Most Common HOA Meeting Problems

HOA meetings are essential for effective community management, but they can sometimes encounter problems that hinder productivity and decision-making. Here are some of the most common issues that arise during HOA meetings.

1. Lack of Attendance and Quorum

Not all residents have the time or interest to attend meetings. This causes a disconnect between homeowners and the HOA board. Worse yet, for annual meetings or meetings that require a membership vote, it can be hard to get a quorum when not enough people attend.

Ensure Proper Notice

One of the best ways to ensure that meetings are packed is to ensure proper and sufficient notice. Notifying residents ahead of time about an upcoming meeting gives them more time to prepare and allows them to make room in their schedule before their calendar fills up.

Notice requirements vary by state. In California, an HOA should give notice of an annual meeting at least 30 days in advance, and for board meetings at least four days’ notice.

An HOA’s governing documents will also contain notice requirements for HOA meetings. Typically, this ranges from seven to 30 days in advance. As the meeting date approaches, remember to give constant reminders to residents. It is also a good idea to promote the meeting using various communication channels such as newsletters, email, phone calls, text messages, flyers, and the community website.

Allow for Virtual Participation

Physical attendance isn’t always a viable option for residents. To address this, an HOA can use technology to make things more accessible for everyone. If state laws and the governing documents allow it, an HOA should consider offering remote or virtual meetings as well as online voting.

2. Poor Preparation and Organization

Poor preparation and organization are among the simplest yet most destructive HOA meeting problems. Without a clear agenda, meetings can become directionless and quickly spiral into chaos. An HOA board that doesn’t prepare for a meeting in advance is also prone to making poor decisions.

Prepare an Agenda

An HOA should develop an agenda ahead of time to avoid poor preparation and organization. This agenda should follow a clear and concise structure and include all pertinent topics of discussion and voting. An agenda serves as a guide for all meeting participants to stay on track.

Distribute and Review Materials Ahead of Time

The HOA board should distribute the agenda and any other materials well in advance of the meeting. This gives both homeowners and board members time to review the materials and make informed decisions.

3. Poor Participation

A high attendance rate doesn’t always equate to high participation. Residents can show up at meetings but remain silent the entire time. While the board mainly makes the decisions at these meetings, it is still important to seek feedback from residents to gauge reactions.

Dedicate Time for an Open Forum

Although residents don’t actively participate in the discussions and decisions at a board meeting, they should still be given the opportunity to voice their concerns. As such, it is important to allocate time for public comment in the agenda. Notices should also reflect that residents have a chance to share their input at these meetings.

Keep in mind that some states require open board meetings to include an open forum. California is one such state. According to Civil Code Section 4925, the board must allow any member to speak at open board meetings within a reasonable time limit.

Keep Discussions Simple

Discussions and decisions can involve technical jargon that residents might not be familiar with, which discourages participation. To address this, the board should make every effort to use simple terms and express their opinions clearly. This promotes inclusivity and encourages residents to engage in community affairs.

4. Going Off-Topic

One of the HOA meeting problems that most associations struggle with is going off-topic. Discussions can quickly veer off course. Sometimes, the board might spend too much time on a single issue, expounding on it in a way that doesn’t relate to the original concern. This unnecessarily lengthens the meeting, causes burnout, and pushes the board to make haphazard decisions just to get it over with.

Stick to the Agenda

Stick to the established agenda to avoid going off-topic. Prioritize urgent issues and avoid branching out to unrelated issues. An agenda not only sets the tone for the meeting but also the pace.

Additionally, distributing the agenda to everyone beforehand gives them time to research, form opinions, and settle on a stance. Board members can do this in advance so that they come prepared with their organized thoughts at the meeting proper, keeping things on track.

Implement Robert’s Rules

Robert’s Rules of Order is a set of parliamentary procedures that facilitate an orderly and efficient meeting. Following Robert’s Rules or another set of procedures allows the HOA to stay on course throughout the meeting. It also prevents members from speaking out of turn and formalizes procedures for efficiency and professionalism.

5. Compliance Issues

The last thing any board wants is to conduct an Illegal HOA board meeting. Unfortunately, this happens way too often, as board members fail to adhere to statutory requirements and their governing documents. Improperly conducted board meetings can call into question the legitimacy of every decision made at these meetings. They also expose the HOA and board to potential liability.

Understand State Laws and the Governing Documents

Board members should thoroughly understand state laws and their governing documents. This means reading up on meeting notice requirements, proper voting procedures, open forum requirements, and proper record-keeping rules.

Hire an HOA Management Company

While self-management is an option, hiring a professional management company can help ensure compliance with legal requirements. An HOA manager can ensure that the board follows all procedures to the letter.

6. Dominant Personalities

Homeowners have different personalities, and some are more dominant than others. While these owners tend to be more vocal about their opinions and issues, there is a danger of them taking over the whole meeting and not allowing others to speak. This creates an imbalance within the community. The loudest voices don’t always represent the majority, but the board might inadvertently mistake it as such because they overshadow the silent owners.

Designate Speaking Time Per Member

To combat this, it is important to allot a time limit for each member to speak during the open forum portion of the meeting. The time limit can vary depending on the needs of the association. In addition to the time limit, consider enforcing a rule prohibiting the same person from speaking twice if other people have yet to get their turn.

Allow Written Input

Some homeowners may feel shy or apprehensive about public speaking. To encourage participation from these owners, an HOA can consider allowing written input. Let members submit their questions or concerns in writing, which can then be read during the open forum portion of the meeting.

7. Escalating Debates

There are plenty of stories of an HOA meeting gone wrong because of heated debates that turn ugly. It is normal for people to have differing opinions on topics and issues. These conflicts are simply part of meetings and discussions. However, it is important not to let these conflicts get out of hand or completely derail the meetings. 

Stay Professional

Board members must remain professional and respectful at all times. They must rein in their emotions and refrain from raising their voice. It is entirely possible to conduct healthy and inclusive discussions without turning heated.

If things do get a little tense, it is essential to exercise empathy. Try looking at things from the opposing party’s point of view. It is also equally important to actively listen to the opinions of others. Keep an open mind, as participants may make good points that could change the perspectives and decisions of others.

Take a Break

Everyone is human, and humans can get caught up in their emotions, which can start affecting their decision-making. When tensions run too high, it is best to take a step back and go on a short break. This will give everyone time to calm down, reorient themselves, and gather their wits. Then, go back into the discussion with a clear head.

8. Technological Hindrances

Nowadays, meetings often need the aid of technology, such as presentations, videos, and even remote meeting applications. Of course, this creates new problems, such as poor Internet connections, audio/visual hitches, and a poor understanding of software functionality.

Check Connectivity Before the Meeting

To ensure a smooth meeting, it is vital to check connectivity before the meeting begins. This way, connectivity issues won’t hinder the flow of the meeting, helping to keep everyone’s attention and maintain momentum.

Familiarize Yourself With the Tools

If the HOA doesn’t have a “tech guy,” it is imperative that board members understand how to operate the various equipment and tools that come with the meeting. This includes laptops, projectors, monitor screens, audio/visual connections, and software. Learning how to use these tools and knowing how to troubleshoot issues can keep things on track.

9. Long Meetings

Finally, HOA meeting problems also include long meetings. Long meetings are detrimental to an HOA not only because they waste time but also because they contribute to poor decision-making. If a meeting takes too long, board members will grow weary and tired, hindering their ability to make good decisions.

Additionally, long meetings can discourage attendance and participation. Nobody wants to attend a meeting if they know it will take hours to finish. Plus, they demonstrate that board members don’t respect homeowners’ time.

Prepare and Study in Advance

Preparing everything in advance helps ensure concise meetings. Board members should research beforehand, gather their thoughts, and list their concerns way ahead of time. This way, they can come to the meeting ready for discussion.

Allocate Timeframes Per Agenda Item

To avoid straying from the topic or dwelling on it for too long, it’s a good idea to designate a timeframe for each agenda item. Set a timer for the discussions so that everyone is conscious of the time.

The Final Word

Board members can face many potential HOA meeting problems. These problems contribute to lengthy, inefficient meetings that can further drive homeowners away. Fortunately, these problems have a fix, and it is fairly easy to implement them.

Personalized Property Management offers HOA management services, including assistance with board meetings, around Southern California. Call us at 760-325-9500 or email us at info@ppminternet.com for more information!

RELATED ARTICLES:

• HOA Meeting Minutes Rules
• HOA Board Duties: What To Expect From Your BOD
• How Can The Board Address HOA Noise Complaints

A professional HOA reserve analyst is an asset to any community. Unfortunately, far too many associations forgo hiring one for various reasons, including budgetary constraints. All things considered, though, the benefits of hiring a professional analyst far outweigh the costs.

What is an HOA Reserve Analyst?

An HOA reserve analyst is a professional who conducts a reserve study or analysis. Professional reserve analysts help ensure the financial stability and long-term viability of an HOA and its assets. With an accurate reserve study on hand, HOAs can carefully plan for future costs while simultaneously protecting the financial interests of homeowners.

Are All HOAs Required to Have a Reserve Study?

Whether or not an HOA must conduct a reserve study depends on state laws and the governing documents.

In some states, associations are required by law to plan for their reserves. California is one of them. According to Civil Code Section 5550, HOA boards must conduct a reserve study at least once every three years if the current replacement value of the HOA’s major components is equal to or greater than half of the association’s gross budget. The board must also review the reserve study every year.

If there is no statutory requirement to conduct a reserve study, an HOA must check its governing documents. The governing documents may require the association to perform a reserve analysis or study, including information on how often it must review this study.

Even if state laws and the governing documents are silent, an HOA would still benefit from conducting a reserve study. Reserve studies allow associations to plan for future costs and accurately incorporate contributions into the budget. This way, when the need arises, an HOA can safely dip into its reserves without needing to levy special assessments or considerably raise regular dues.

The Benefits of Hiring a Professional HOA Reserve Analyst

While California law does not specify who should conduct reserve studies for HOAs, it is best to hire an independent reserve analyst for the job. Most governing documents require an HOA reserve study professional to perform it anyway. Even without such a requirement, though, there are several reasons why hiring a professional reserve analyst is the way to go.

1. Compliance

Different states have different laws regarding reserve requirements and review frequency. An HOA reserve analyst can ensure compliance with these requirements because they are more well-versed in the reserve study laws in their state. 

The same goes for governing documents. Not all associations have similar requirements. A professional reserve analyst can review the provisions of an HOA’s CC&Rs and bylaws and ensure compliance with them. They know to understand the technicalities and jargon involved, often better than the board or community manager.

2. Expertise

Most professional HOA reserve analysts receive training and education to perform reserve studies. As such, they are better suited to conduct them.

Reserve analysts know how to perform various types of studies. These include a full reserve study, a study with a site visit, a study with no site visit, and annual reviews/updates. They also typically offer customized services depending on the community’s needs.

Furthermore, reserve analysts are well-versed in carrying out both parts of a typical reserve study. They can perform the physical analysis, which assesses the physical condition of the community and its assets. This includes estimating the cost of repairing and replacing major components in common areas. They can also perform the financial analysis portion, which reviews the HOA’s current financial health.

From there, reserve analysts can develop a financial plan for the association. This plan includes how much an HOA needs in its reserves at any given time and the dollar amount of contributions it must make every year to maintain the appropriate fund level.

3. Experience

Reserve analysts have the necessary experience to help associations prepare their studies. They have the proper industry accreditations that serve as evidence of their proficiency. They often have backgrounds in accounting, engineering, architecture, and other roles that can supplement their analyses. 

Moreover, reserve analysts usually pursue continuing education to keep up with the latest developments, industry trends, and standards. Associations can also ask for references or samples of past work to understand their work better.

4. Liability

There is a greater risk of potential liability when an HOA board takes the reserve study into its own hands. Hiring an independent specialist minimizes the association’s exposure to liability. Reserve analysts or specialists often have guarantees and warranties written into their contracts. Furthermore, when an HOA board prepares the study, it arguably breaches the Business Judgment Rule.

5. Objectivity

Professional reserve analysts offer an objective, unbiased perspective crucial for making informed decisions about reserve funding. This impartiality helps avoid potential conflicts of interest or biases that more commonly arise when the board conducts the study internally.

In addition, hiring an HOA reserve analyst helps shield the board from potential criticism. Homeowners who dislike the board will usually challenge or contradict any decision the board makes, including matters pertaining to reserve funding. With an independent or third-party analyst at the helm, homeowners can’t claim that the board used biased judgment to conduct the study.

6. Cost

Budgetary constraints are one of the major factors keeping HOAs from hiring a professional. However, reserve analysts offer various options suitable for every budget. Plus, smaller communities usually command a lower price for reserve studies.

7. Assurance

Hiring an independent reserve specialist gives board members and homeowners peace of mind. It is reassuring to know that the HOA’s physical and financial assessment rests in capable hands.

How to Select an HOA Reserve Analyst

Choosing the right HOA reserve analyst is essential for obtaining a reliable and accurate reserve study. Here are key steps and considerations during the search and hiring process.

1. Establish a Budget

The first step in hiring an HOA reserve analyst is establishing a budget. Not all associations have a large budget for reserve studies. Only a few associations dedicate some of their funds to this expense. However, the importance of reserve studies should be accounted for.

Once an HOA has set a budget for its reserve study, it can begin the search process. The established budget will help narrow down choices and remove expensive analysts from the running.

2. Determine Needs

What type of reserve study does the HOA need? This question should be answered at the beginning of the selection process. Determining whether the HOA needs a full study, a study with no site visit, or a simple update will help streamline everything.

3. Check Credentials

Look for reserve analysts with recognized certifications and credentials. The Community Associations Institute (CAI) offers the Reserve Specialist (RS) designation, which indicates that the professional has met specific education, experience, and ethical standards. Other certifications to look for include the Professional Reserve Analyst (PRA) designation from the Association of Professional Reserve Analysts (APRA).

4. Ask for References

It helps to ask for references to check the quality of work. References will allow the HOA to gauge whether or not a particular analyst is a good fit for the community. Expertise and experience should be considered, as well as work ethic and values. Ensuring these align with the HOA is critical to a good working relationship.

5. Verify Insurance

A professional reserve analyst should have the proper insurance coverage in place. Liability insurance is a must, as it protects both the HOA and the analyst in case of omissions or errors.

6. Request a Sample Report

An HOA should ask the reserve analysts for a sample of their previous work. The report should be clear, comprehensive, and easy to understand. It should contain detailed information on the condition of the assets, projected costs, and funding recommendations. Visual aids like graphs and charts also help the board grasp the findings better.

7. Evaluate Methods

The analyst’s methodologies must use industry-standard practices. When asked about their process, reserve analysts should offer transparent explanations. A good methodology also considers factors such as inflation, interest rates, and other economic conditions.

8. Gauge Responsiveness

Effective communication is essential for a successful working relationship. Evaluate the analyst’s communication style, responsiveness, and willingness to answer questions. They should be approachable and able to explain technical concepts in plain language.

9. Review Contracts

The HOA should request detailed quotes from multiple reserve analysts and compare the costs. Be wary of unusually low bids, which may indicate a lack of thoroughness. Boards should review the contract carefully to understand the terms and conditions, including payment schedules, deliverables, and additional services. A good contract should also include guarantees and warranties.

Everything Considered

A reserve study is a fundamental tool in ensuring a homeowners association’s financial health and stability. Not everyone can properly conduct a reserve study, though. Even with no requirements in place, hiring an HOA reserve analyst to perform this study is best, as the benefits are clear and convincing.

Personalized Property Management offers HOA management services, including help with reserve study reviews, around Southern California. Call us at 760-325-9500 or email us at info@ppminternet.com for more information!

RELATED ARTICLES:

• How Does The Board Come Up With An HOA Budget?
• How To Improve Communication In HOA Community
• 9 Reasons You Need An HOA Attorney