Communication in HOA communities is crucial to building a good relationship between the members and the HOA board. A lack of communication could cause conflict and lead to misunderstandings, accusations, and even legal complications. 

HOA Communication Tools to Adopt

Homeowners associations have several tools at their disposal. Here are a few tools your community can use to foster more efficient open communication.

1. HOA Newsletter

Newsletters are an excellent way to communicate important affairs to HOA members. Publishing newsletters lets them stay updated on community projects, events, and relevant news. The best HOA newsletters also cultivate good relationships within the neighborhood. 

Consider printing or distributing electronic newsletters regularly. HOAs can do so once every quarter or once a month. However, avoid publishing sensitive information or those that would humiliate members, such as the names of violating or delinquent members. 

2. HOA Email Communication

Maintaining an HOA email list is a quick and effective way to communicate with members. The association can quickly distribute electronic newsletters, announcements, and board meeting minutes using the HOA email address.

However, remember that email is not always ideal for every community. For example, communities primarily catering to elderly residents might benefit more from physical mail. Apart from this, email is not appropriate for all circumstances. If a board member wants to confront a homeowner about a violation, discussing the issue in person might be best.

3. Text Messages and Phone Calls

Text blasts are a great way to send information to homeowners. They’re easily accessible for both the board and residents, and they tend to deliver information quickly, which is useful for emergencies. 

In addition to these, homeowners associations can also send emergency messages through automated phone calls. This is helpful as it quickly gets homeowners’ attention. It’s also a better method of communication for homeowners with visual impairments. 

4. Direct Mail

Some people may think direct mail is outdated, but it’s still a good form of communication. In fact, many elderly residents will appreciate direct mail as it’s easier for them to access. Moreover, homeowners can read these letters on their own time. They also don’t get buried in their inbox like emails or text messages. 

5. Social Networking Sites

Social media can make communication between HOA boards much easier. This is especially useful if the HOA is composed primarily of younger, tech-savvy residents. Consider creating a dedicated Facebook group to disseminate announcements. 

Social media is also a good way to encourage the members to connect with their neighbors. They can discuss issues informally, talk about community events, or provide suggestions to the HOA board. 

However, remember that social media can get chaotic, especially when disgruntled homeowners spam unhelpful comments on HOA posts. Hence, creating an HOA communication policy or social media guidelines for members to follow may be wise. 

6. Community Websites

A dedicated HOA website is a good alternative to social media platforms. It may cost more or be more difficult to set up, but the board can better control the content posted. The HOA can publish the most important announcements on the front page with a website. 

In addition, websites are multifunctional and can integrate other services. For example, the board can use the portal to receive work order requests, architectural review requests, and violation reports.

7. Physical Signs, Flyers, and Bulletin Boards

Physical signage and flyers are still relevant even in the digital age. After all, not everyone is tech-savvy enough to know how to use an email address or navigate a website. We recommend posting physical signs in prominent locations like the community clubhouse bulletin board.

It’s also a good idea to post rules in relevant locations. For instance, the HOA can communicate its pool rules by posting a sign right by the community pool. They should also post parking signs in HOA parking spaces.

8. Board Meetings

Most homeowners associations conduct board meetings periodically. Use the opportunity to communicate relevant information or make announcements to the residents. It’s also a good avenue to discuss community issues such as problems with drainage, vendor issues, and the like.

9. Welcome Packet

An HOA can quickly disseminate important information to new homeowners through a welcome packet. Make sure it includes all essential information about HOA living. We recommend including the community’s governing documents and rules and regulations. Remember also to include FAQs regarding trash disposal, operating hours, and amenity use.

In addition, the welcome packet may have a resource page that lists local necessities such as grocery stores, home improvement shops, and hardware stores. The HOA can also list the contact information of local utility and service providers. 

Best Practices for Communication In HOA Communities

How should communication in HOA communities be done? Follow these best practices to foster a harmonious environment. 

1. Explain the Reason for Policy Changes

Board members often tell residents about policy changes without explaining them. This can lead to confusion and frustration among residents. As such, we recommend communicating why certain policies might change.

For example, the association has adopted certain pet restrictions regarding dog breeds. This decision is often not arbitrary—and it shouldn’t be. It often arises from specific incidents. For example, a resident’s violent dog may have caused an accident. 

It’s also helpful to outline how the new policy benefits the community. This will help the residents understand how it will improve their quality of life. As a result, they won’t see policy changes as a limitation but an enhancement. 

2. Communicate Changes Promptly

Homeowners association communication must be thorough and prompt. If there’s any change in the community, don’t delay sending word to the homeowners. Otherwise, residents not caught up with new policy changes might receive warning letters for violations they didn’t realize they’d committed. 

Apart from being considerate to the homeowners, the governing documents may also require prompt communication. Some governing documents give boards only 30 days to communicate new policies. 

3. Be Clear with Rules

New policies, rules, or guidelines may overwhelm the community, especially if it entails a big change. HOAs can help residents digest the changes by breaking down how the community will adopt the new rules. The residents will know what to expect and make preparations.

It may also be helpful to adopt new rules slowly. For example, a new rule may limit how long guests can park in guest parking spaces. To ease the rule into community life, incrementally decrease the allowed period. If the HOA’s goal is to limit parking to 24 hours, try limiting it to 72 hours for the first month. The HOA can then implement a 48-hour limit in the second month and a 24-hour limit in the third. 

4. Use Multiple Communication Channels

One big mistake HOAs make is using only one communication channel. While certain channels like email or social media are convenient, they are not enough. Some people may not check their email or use social media. Hence, homeowners associations should use everything to keep everyone in the loop. 

5. Communicate Frequently

Frequent communication in HOA communities is always better than no communication at all. Make sure the residents are up-to-date on all the HOA’s affairs. Keep them informed of upcoming events, meetings, and even minor details such as the landscaping schedules.

6. Focus on Long-Term Effects

When communicating with homeowners, HOAs should focus on the long-term benefits and effects of a rule change. This will showcase how valuable the change will become to the community. 

For instance, let’s say the board has adopted a new rule that limits the types of trees homeowners can plant. Residents can more easily accept the rule if the board explains how certain tree species are more likely to cause structural damage due to sagging and falling tree branches. 

7. Keep Confidential Issues Private

Constant and open communication is beneficial, but that doesn’t mean the HOA should tell the homeowners everything. Sensitive issues such as litigation, delinquencies, and private data should never be publicized to the community. Otherwise, it can cause conflict within the HOA as some individuals may feel their privacy has been breached.  

Also, disclosing confidential information could be against state law or the governing documents. This could lead to lawsuits, costing the association thousands of dollars in litigation expenses. 

8. Create an FAQ Page

A Frequently Asked Questions (FAQ) page is essential for any homeowners association. It’s helpful for both old and new homeowners as FAQ pages outline everything most homeowners need to know. Ensure to include common questions regarding meeting schedules, rental restrictions, tenant rights, pet regulations, monthly assessments, and voting rights. 

Make Communication a Priority

Communication in HOA communities should be a top priority for HOA board members. It can make or break the residents’ overall satisfaction and keep conflict at bay. Just make sure to use the right tools and adopt effective communication practices. 

Don’t have time to manage your communication channels? Personalized Property Management can help. We provide premier management services to communities all across Southern California. Call us at 760-325-9500 or email us at info@ppminternet.com for more details!

Every community should exercise proper HOA vendor management. From hiring the right vendors to maintaining healthy relationships with them, the HOA board manages all vendors and contractors.

What Is HOA Vendor Management?

Homeowners associations are responsible for many tasks, including tasks that volunteers can’t accomplish independently. For work like maintenance, repairs, and landscaping, for instance, an HOA would be better off hiring a third party. This is where homeowners association vendors come in.

HOA vendor management is the practice of managing, scheduling, and coordinating with vendors. It involves the entire process – from hiring vendors to monitoring their performance. It is essential for maintaining quality, controlling costs, ensuring compliance, managing risks, and fostering positive community relations within homeowners associations.

How to Select HOA Vendors

It is imperative to start from the beginning to facilitate a good working relationship with vendors. Homeowners associations should first select quality vendors that match their values and goals. Far too many HOA boards hire vendors without doing proper research, resulting in years-long contracts with mediocre vendors.

Here is how to pick HOA vendors that suit your community.

1. Check Governing Documents

Before starting the vendor selection process, review the HOA’s governing documents, including the bylaws and CC&Rs (Declaration of Covenants, Conditions, and Restrictions). These documents may specify requirements or restrictions regarding vendor selection, contracts, and financial considerations.

2. Employee vs. Independent Contractor

Determine whether your HOA needs an employee or an independent contractor for the services required. Employees are directly managed by the HOA and may be suitable for ongoing tasks, while independent contractors offer specialized services on a contract basis.

With employees, your HOA must pay their wages directly, have workers’ compensation, and may need a more comprehensive fidelity bond. Contractors offer more wiggle room, as they are responsible for their wages, taxes, and insurance. Your HOA merely needs to pay the contractor the agreed price.

3. Establish a Budget

Set a realistic budget for the services your HOA needs. Consider factors such as the size of the community, the scope of work, and any financial constraints. A clear budget will help narrow vendor options and ensure that the selected vendor aligns with the association’s financial goals.

4. Send Out RFPs

Create requests for proposals (RFPs) outlining the scope of work, expectations, and evaluation criteria. Having an RFP standardizes the proposals candidates send you, making it easier for your HOA board to review each one. 

Distribute the RFP to potential vendors, inviting them to submit proposals detailing their qualifications, experience, and pricing. It is important to be specific about the requirements to ensure that vendors provide relevant information.

5. Contact References

Request references from vendors and contact previous clients to gather feedback on their performance, reliability, and customer service. Ask about the vendor’s communication style, responsiveness, and ability to meet deadlines. References provide valuable insights into the vendor’s reputation and reliability.

6. Verify Credentials, Licenses, and Insurances

Before hiring a vendor, verify their credentials, licenses, and insurance coverage. Ensure that the vendor holds the necessary permits and certifications to perform the services in your area. 

Additionally, confirm that the vendor carries adequate insurance coverage to protect against liability and property damage. Your HOA can ask for a Certificate of Insurance as proof. However, insurance coverage should not stop once you hire a vendor. Vendors should maintain their insurance policies, so asking for the same certificate every year is best.

7. Interview Candidates

Conduct interviews with shortlisted candidates to assess their suitability for the job. Sample questions to ask vendors include:

• Can you provide examples of similar projects you’ve completed?
• How do you handle communication and updates?
• What measures do you take to ensure quality and customer satisfaction?
• How do you address unexpected challenges or delays?
• What is your approach to resolving disputes or issues that may arise?

The interview portion will also allow your board to gauge the personality and work ethic of the candidates. Getting a clear picture of potential vendors beyond their services is vital. Building a strong relationship with a vendor will prove difficult if your HOA doesn’t share the same values and objectives.

8. Get a Vendor Contract and Have a Lawyer Review It

Once you pick a vendor, draft a detailed contract outlining the scope of work, timelines, payment terms, and responsibilities. It is essential to have a lawyer review the contract to ensure legal compliance and protect the HOA’s interests. Your HOA lawyer should ensure the contract includes indemnification, dispute resolution, and termination clauses.

One thing that HOA vendor contracts may have is an auto-renewal clause. This clause specifies that the vendor agreement will automatically renew for another X years if the HOA fails to terminate the contract within a certain time. Make sure your vendor contract does not have this clause.

Your HOA board should negotiate for a shorter contract period first. Perhaps start with a 1-year agreement. This way, you can evaluate the vendor’s performance and be free to terminate the contract if the results don’t meet your standards. Don’t trap your HOA into a 5-year contract with a subpar vendor.

9. Make an Informed Decision

Finally, all proposals, references, and interviews should be evaluated to make an informed decision. Consider factors such as reputation, experience, pricing, and compatibility with the HOA’s values and goals. Choose a vendor that meets the association’s needs and demonstrates professionalism, reliability, and a commitment to quality service.

If a vendor seems like the best fit but is too expensive, don’t hesitate to ask for discounts or bulk pricing. And keep in mind that quality does not always equal price.

Where to Look for HOA Vendors

Now that you know how to hire vendors, you should also know where to start looking for them. A simple Google search may give you results, but more effective ways to search for reputable vendors exist.

Here are three methods for looking for HOA vendors:

• Online Directories. Online directories list all the vendors that serve a particular area or vicinity. Some directories even cater specifically to HOAs or planned communities.
• Referrals. If you want a tried-and-tested vendor, ask around for referrals. Perhaps you can ask someone from a neighboring HOA or seek out suggestions from members of the association. Just make sure there is no conflict of interest.
• HOA Management Company. Regarding HOA vendor management, management companies have the practice down pat. If you already have an HOA management company, they already have a network of vetted vendors. 

How to Manage HOA Vendors

Effective HOA vendor management is essential for ensuring vendors deliver quality services on time. Here are key strategies for managing HOA vendors and fostering successful partnerships.

1. Communicate Clearly and Frequently

Clear and frequent communication is the cornerstone of effective HOA vendor management. Establish open communication channels with vendors to relay expectations, updates, and any changes in requirements. 

Your HOA board should communicate project timelines, scope of work, and any specific guidelines or preferences. Encourage vendors to provide status updates and address any concerns promptly. By maintaining transparent communication, HOAs can prevent misunderstandings and ensure smooth project progress.

2. Evaluate Performance and Provide Feedback

Regular performance evaluations are crucial for assessing vendor performance and identifying areas for improvement. Your HOA board should establish measurable criteria for evaluating vendor performance, such as adherence to deadlines, quality of work, responsiveness to requests, and customer satisfaction. Collect feedback from residents to understand their points of view. 

Once you have an evaluation, don’t keep it to yourself. Communicate them to your vendor. Provide constructive feedback by acknowledging their strengths and addressing any areas needing improvement. Performance evaluations will also prove useful for contract renewals, negotiations, and terminations.

3. Build a Healthy Relationship

Building a healthy relationship with vendors begins during the hiring process. Screen and select vendors carefully based on their qualifications, experience, and compatibility with the HOA’s values and goals. 

Establishing clear expectations and responsibilities upfront is essential to avoid conflicts. A clear and comprehensive contract can accomplish this, but communication is equally critical.

Of course, your HOA board should also show your appreciation. It goes both ways. Vendors should feel valued for their hard work, especially if they provide quality results. To show you care, foster a collaborative and respectful working environment while always maintaining professionalism.

HOAs can build trust and loyalty with vendors by cultivating a positive relationship from the outset. This will help you establish long-term partnerships built on mutual respect and success.

HOA Vendor Management Done Right

Homeowners associations rely on vendors to maintain the integrity and functionality of their communities. Whether it’s landscaping, maintenance, or repairs, choosing the right vendors and knowing how to manage them is crucial for the well-being of the association and its residents.
Personalized Property Management offers expert management services to HOAs and condos in Southern California. Call us today at 760-325-9500 or email us at info@ppminternet.com to learn more!

An HOA budget is important in maintaining the community’s financial health. Without it, the HOA may be unable to fund its regular maintenance activities. How does the board manage to create an accurate one every year? Let’s examine the steps to create an HOA annual budget.

What Is an HOA Budget?

An HOA budget, also known as the HOA operating budget or annual budget, is the financial plan that forecasts the community’s income and expenditures for the fiscal year. It allows the association to allocate its financial resources to various activities such as maintenance and necessary repairs. Moreover, it helps them determine how much to charge the homeowners in HOA assessments. 

Parts of an HOA Budget

Like any financial plan, a homeowners association budget has several parts. These parts can be divided into two overarching categories: income and expenses. 

Income Sources

Homeowners associations need an income source to fund their operations. Typically, this comes in the form of homeowner assessment fees, which are the monthly assessments homeowners are required to pay the HOA. These fees also include other necessary fees, such as special assessments.

Apart from assessments, HOAs may also earn money from other revenue streams. For example, the HOA may charge for services and amenities such as gym use or landscaping. The HOA may even charge event fees and earn income from renting common areas. Moreover, many communities earn money through fines for HOA violations.

Expenses

HOAs have three main expenses to account for in the budget: operational costs, reserve funds, and community improvements. Operational costs include everyday expenditures like utilities, management fees, insurance, and cleaning. 

Meanwhile, the reserve funds are set aside for major expenditures outside of regular operations, such as major repairs, upgrades, and replacements. They also exist to fund emergencies to avoid special assessments.

Lastly, communities must fund HOA improvements that will enhance the community’s living experience. This includes anything from gym renovations to new facilities like pools or co-working spaces. 

How to Plan an HOA Budget

HOA budgeting can be overwhelming, especially for communities without experience with HOA financial planning. However, it can be made easier if we break the process down into several key steps. 

1. Form a Committee

Homeowners associations often create a dedicated budget or financial committee that creates the budget. Typically, this includes the HOA treasurer and several community volunteers who are well-versed in financial management. It also includes a representative from the HOA management company, if applicable. 

2. Set an HOA Budget Meeting

With the team assembled, it’s time to schedule a dedicated meeting to plan the budget. Set a date and time when everyone is available. If you’re having trouble, consider scheduling the meeting after a regular board meeting or HOA event. If they’re also attending the HOA event beforehand, more of the committee members should be able to come. 

However, remember that it’s best to dedicate an entire afternoon to the meeting. This will give you ample time to consider every possible factor that affects the community’s budget. 

3. Gather Financial Information

The committee should collect financial information from the HOA. A good way to gauge the association’s projected income and expenses is to get an example of the HOA budget—preferably the previous year’s budget. 

Review the budget and how the committee allocated money for each expense. Compare the association’s actual income and expenses for the previous year to the budget. 

The committee can also review the HOA’s account balances and previous financial statements. These should provide an overview of the HOA’s financial condition and help you identify potential problems. 

4. Set Goals

Homeowners associations maintain the common areas, enforce the rules, and enhance the community’s overall living experience. However, in addition to the community’s regular operations, HOAs should identify its long-term goals and needs. 

What does the community want to happen in the next 5 years? Answering this question will help the committee set financial priorities and create a more effective budget. For example, the community wants to create more useful facilities for its residents. The HOA will need ample funds in its reserves for capital improvements to do this. The budget committee can then suggest increasing regular assessments to fund the reserves.

Before you set your goals, remember to consider the community residents’ opinions. Consider surveying the homeowners for improvements they want to see around the neighborhood. The board may want that new pool, but homeowners may simply want more services such as snow removal and landscaping. 

5. Estimate Community Expenses

The community’s regular expenses are among the most important HOA budget requirements. Make sure to account for all the necessities so you don’t levy a special assessment later. Moreover, it’s crucial to remember that prices of various services and utilities may change due to inflation. 

One way to do this is to ask the HOA’s vendors about their rates for the coming year. Some vendors may provide the same rates, while others may increase their prices to accommodate rising material and labor costs. 

6. Account for the Reserves

If the HOA hasn’t conducted a recent reserve study, they should consider hiring a professional to assess the community’s physical assets and financial condition. Doing so will help the committee allocate how much it needs to fund the reserves. With ample reserves, the community will be ready for upcoming major repairs and replacements. 

7. Anticipate Changes

The HOA budget might serve as a reliable guide for homeowners associations. But changes and unexpected challenges occur no matter how well you plan things. It’s best to anticipate these changes and account for them beforehand.

For instance, the country’s economic condition might change in the following months. This can increase wages and inflation, resulting in higher contractor and management costs. Moreover, economic shifts may lead to unemployment and impact homeowners’ livelihoods. It can affect the HOA as there may be more delinquencies and late payments. 

8. Calculate Assessments

After considering all the factors, it’s time to calculate the regular assessments. Ensure that the HOA’s collections are enough to meet the community’s monthly expenditures. You should also account for the reserve funds and capital improvements.

However, remember that significant increases may invite backlash from the homeowners. Thus, balancing the community’s needs with the homeowners’ capabilities is crucial. The committee and board should also review state law and the governing documents, as there may be limits to how much the HOA can increase its fees. 

For instance, the state of California limits assessment increases to 20% of the preceding fiscal year’s HOA dues. The HOA can only surpass that limit with the approval of a majority of a quorum of the membership. 

9. Present the Budget and Gather Feedback

The budget committee should make a preliminary presentation to the community. Remember to be transparent with the HOA’s financial condition, needs, and constraints. The committee must also be open to correction and suggestions. Be prepared to adjust the budget according to the feedback. 

HOA Budget Best Practices

Here are some tips and best practices to keep in mind to create a reasonable budget. 

1. Be Transparent

The committee must be transparent about HOA finances. It must communicate the budgeting process and results clearly to the homeowners. Ensure they are well-informed about the community’s current state to support the budget and fee increases.

2. Don’t Neglect the Reserves

There will always be emergencies and rainy days in life. Accidents and natural disasters happen, so it’s best to be prepared to fund any major repairs, replacements, or maintenance when they do. 

3. Plan for the Long-Term

It’s easy to fall into the trap of planning for only short-term goals. However, planning for the community’s long-term objectives is the wiser choice. Anticipate future needs such as major improvements, upgrades, and amenity constructions. 

4. Use Technology

Several useful tools can help with budgeting and financial planning. They can help you track expenses, forecast income and expenditures, and generate reports. Take advantage of them to streamline the budgeting process and make proper analyses. 

5. Observe and Adjust

The community should regularly monitor its finances and spending as the year passes. Pay attention to whether or not the community remains within or exceeds the HOA budget. If you notice a discrepancy, adjust the budget to stay on track. 

6. Seek Professional Help

Budgeting often requires financial management expertise and accounting knowledge. If your community doesn’t have a resident accountant or financial expert, consider hiring a professional management company to help you draft the budget. It’s also a good idea to work with reserve study specialists to help you plan the reserves. 

A Successful Community

An HOA budget is essential for a community’s success. Otherwise, the community might neglect its duties and let its common areas disappear, which will affect the residents’ quality of life and impact property values.

Do you need help creating a community budget? Personalized Property Management can help. We offer specialized management services to South California homeowners associations. Call us now at 760-325-9500 or email us at info@ppminternet.com to learn more!

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

What Are HOA Board Duties?

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

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

Here are the typical HOA board of directors responsibilities.

1. Common Area Maintenance

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

2. Financial Management

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

3. Vendor Management

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

4. Rule Enforcement

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

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

5. Homeowner Communication

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

Understanding HOA Board Roles

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

HOA President Duties

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

The HOA president’s responsibilities are as follows:

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

HOA Vice President Duties

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

The HOA vice president’s responsibilities are as follows:

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

HOA Secretary Duties

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

The HOA secretary’s responsibilities are as follows:

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

HOA Treasurer Duties

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

The HOA treasurer’s responsibilities are as follows:

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

What Are the Fiduciary Duties of HOA Board Members?

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

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

Duty of Care

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

More specifically, the duty of care entails the following:

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

Duty of Loyalty

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

More specifically, the duty of loyalty entails the following:

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

Duty to Act Within the Scope of Authority

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

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

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

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

Do HOA Board Members Get Paid?

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

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

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

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

The Bottom Line

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

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

What Is an HOA Special Assessment?

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

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

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

Why Do HOA Special Assessments Exist?

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

Emergency Repairs

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

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

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

Community Projects

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

Insufficient Reserve Funds

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

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

Inadequate Insurance

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

Poor Budgeting

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

How Much Are HOA Special Assessments?

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

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

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

Can HOAs Charge Special Assessments Anytime?

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

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

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

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

How Special Assessments Impact Communities

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

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

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

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

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

Can You Refuse to Pay Special Assessments?

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

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

Can Homeowners Challenge Special Assessments?

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

How to Avoid Special Assessments

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

1. Conduct Reserve Studies

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

2. Practice Proper Budgeting

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

3. Hire a Professional

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

4. Get Insurance Coverage

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

Frequently Asked Questions

What Is a Special Assessment Tax?

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

Can Insurance Cover Special Assessments?

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

A Last Resort

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

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

What Do HOA Management Companies Do?

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

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

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

Qualities to Look for in HOA Management Companies

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

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

1. HOA Knowledge

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

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

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

2. Varying Services

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

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

3. Experience

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

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

4. Technologically Advanced

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

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

5. Excellent Communication

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

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

6. Reliable

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

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

7. Flexible

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

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

How Much Do HOA Management Companies Charge?

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

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

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

Making the Right Choice

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

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

What Is an HOA Manager?

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

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

What Does an HOA Manager Do?

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

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

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

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

What Are the Benefits of Hiring an HOA Manager?

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

1. More Experience and Expertise

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

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

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

2. Focused Attention

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

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

3. Dedicated Support

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

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

4. Has a Team

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

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

5. Neutral Third Party

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

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

A Manager Worth Hiring

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

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

What Are HOA Documents?

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

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

Hierarchy of HOA Governing Documents

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

1. Federal, State, and Local Laws

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

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

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

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

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

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

2. Community Plat

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

Other than that, the community plat details the following:

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

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

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

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

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

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

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

4. Articles of Incorporation

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

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

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

5. Bylaws

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

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

6. Rules and Regulations

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

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

Some of the most prevalent rules of an HOA include:

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

Review Thoroughly

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

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

What Is HOA Fee?

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

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

What Do HOA Fees Cover?

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

1. Common Area Maintenance

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

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

2. Municipal Services

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

3. HOA Insurance

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

4. Services and Amenities

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

5. Reserve Funds

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

How Much Are HOA Fees?

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

How Are HOA Fees Determined?

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

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

Do Homeowners Need to Pay Other Fees?

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

Special Assessments

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

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

Fines

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

What Happens If You Fail to Pay HOA Fees?

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

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

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

Are HOA Fees Tax Deductible?

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

What Is HOA Fee? Answered!

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

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

What Is HOA Management?

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

What Do HOA Management Companies Do?

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

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

Who Does What: HOA Board vs HOA Management Company

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

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

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

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

How Much Does Professional Management Cost?

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

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

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

Self-Management vs. Professional HOA Management

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

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

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

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

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

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

Call a Professional Today!

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