Navigating master-planned community management can be challenging for inexperienced leaders. The first step in mastering it is understanding how it differs from traditional HOA management. While the two share similarities, important distinctions set master-planned communities apart.
Understanding Master-Planned Community Management
The concept of master-planned communities has become increasingly popular as of late. Developers continue to create large, self-contained neighborhoods that offer a mix of residential, commercial, and recreational spaces.
These meticulously planned communities often provide a wide variety of amenities, from parks and schools to shopping centers and entertainment venues.
Managing a master-planned community is significantly different from managing a traditional homeowners association. This is because such communities’ scale, complexity, and needs are vastly greater.
What is a Master-Planned Community?
A master-planned community is a large-scale, planned development that typically includes a variety of property types, such as single-family homes, townhouses, condos, and even commercial spaces like retail shops or offices.
These communities often feature extensive amenities such as parks, swimming pools, golf courses, schools, and shopping centers—all designed to create a self-sustaining and attractive environment for residents and businesses alike. Unlike a traditional neighborhood, a master-planned community is developed with long-term growth and functionality in mind. It offers numerous services and amenities that cater to residents’ daily needs.
What is a Homeowners Association?
A developer creates an HOA to manage and regulate the common areas within a residential community. These associations enforce community rules, collect dues from residents, and maintain amenities such as clubhouses, pools, and landscaping.
HOAs focus on preserving property values and maintaining a high quality of life for residents. However, they typically govern much smaller, more localized areas than master-planned communities.
Differences Between a Master-Planned Community and an HOA
Although a master-planned community may include multiple HOAs, several key differences exist in the structure and management of these two types of developments. These differences are apparent in the size and scope, types of properties, amenities and infrastructure, and governance and structure of these communities.
1. Size and Scope
The most prevalent difference between a master-planned community and a traditional HOA is the size. A master-planned community is significantly larger, often spanning hundreds or thousands of acres. It includes residential units, commercial areas, parks, and schools.
In contrast, a typical HOA governs a smaller, residential neighborhood with more limited common areas and fewer amenities. Traditional homeowners associations often do not have commercial establishments, too. Sometimes, a master-planned community consists of several HOAs within its development.
2. Types of Properties
In a master-planned community, you will find a variety of property types. These include single-family homes, townhomes, condos, and even commercial spaces.
Because of the diversity of the properties in a master-planned community, it can be difficult to narrow down the right management approach. Varied properties call for varied management styles, as each type of property might have its own set of unique characteristics and problems, as well as different needs and requirements.
On the other hand, a traditional HOA usually governs a more uniform neighborhood. Property types do not differ as much, and if they do, there are only small distinctions. Unlike a master-planned community, which often calls for a broader management approach, a traditional HOA can focus on residential management.
3. Amenities and Infrastructure
Master-planned communities are known for their extensive amenities. This can include everything from golf courses and walking trails to retail centers and schools.
Managing these amenities requires more sophisticated infrastructure and long-term planning than managing an HOA, which typically manages fewer amenities, such as pools, parks, or clubhouses.
4. Governance and Structure
A master-planned community often includes multiple sub-HOAs. Each one governs a specific section of the community (such as a condo association or a townhome section) and reports to a larger, overarching master association that oversees the entire development. In a traditional HOA, only one board of directors is typically responsible for the entire community.
Differences in HOA Management for Master-Planned Community vs. HOA
Master-planned community management presents unique challenges that go beyond typical HOA management. Here are some key differences between the two types.
1. Scale of Operations
Master-planned community management requires oversight of much larger infrastructure and more extensive amenities compared to an HOA. For instance, a master-planned community with a vast network of parks, roads, and commercial spaces requires more complex maintenance. In comparison, a small neighborhood with only a community pool or shared clubhouse does not need a comprehensive maintenance plan.
Communication and member management are also more difficult to navigate in master-planned communities. Because these communities tend to have a larger population, the board might receive hundreds of messages, emails, and work orders every week. A smaller community, on the other hand, might have to deal with a few requests a month.
2. Financial Management
Due to its size and variety of amenities, a master-planned community requires a more complex financial management system. The budget must account for the maintenance of large parks, recreational centers, commercial areas, and potentially even schools. Fees can amount to tens—even hundreds—of thousands a month. Projects requiring significant budgets and reserves tend to be more demanding because there is more to consider.
This contrasts HOA budgets, which typically focus on maintaining smaller common areas and enforcing community rules. Boards in traditional HOAs don’t usually have large amounts of money to deal with. Furthermore, financial reports and statements may be more detailed in master-planned communities than small HOAs.
3. Coordinating Multiple Sub-HOAs
In a master-planned community, the master association must coordinate with multiple sub-HOAs, each responsible for different community sections. This adds layers of complexity to governance. Each sub-HOA has its own rules, responsibilities, and board of directors.
However, even if each sub-HOA is a moving part, a master-planned association must step in for cohesiveness. All of the development’s components have to come together to work in unity.
4. Community Growth and Development
Master-planned communities often grow in phases. Management must handle ongoing development, future expansion, and new property integration. All of these things require long-term planning and flexibility. In contrast, once an HOA’s development is complete, its management focuses primarily on maintaining the status quo.
Benefits of Hiring a Professional for Master-Planned Community Management
Due to the complexity of master-planned community HOA management, hiring a professional management company can provide significant benefits. Here’s how a management company can help.
1. Expertise in Large-Scale Operations
Professional management companies have experience overseeing large developments, coordinating the maintenance of vast common areas, and ensuring all amenities function smoothly. They also know how to handle the complex financial planning required to maintain a master-planned community.
While the board can try to take on this task, it is often challenging. Board members have other priorities on their plates. They also often lack the skills and experience necessary to manage a large community. Hiring a management company is a wise choice.
2. Financial Oversight and Budgeting
With extensive amenities and infrastructure, master-planned communities require careful financial management. A professional management company can help create and manage budgets, collect dues, and prepare financial statements. The company can also maintain a healthy reserve fund for future repairs or upgrades.
3. Legal and Compliance Support
Juggling the management of multiple sub-HOAs with legal compliance is often hard to achieve. There are plenty of federal laws, state regulations, and local ordinances to keep up with, not to mention numerous building codes and zoning laws.
A management company is well-versed in all aspects of legal compliance. Most companies have a dedicated legal team or, if not, have a law firm on retainer. Associations function differently than corporations, even though they are usually classified as such. Therefore, not all laws apply to them.
With a management company, master-planned developments can stay up-to-date on new legislation and ensure compliance with current ones. These include the Davis-Stirling Act and the California Corporations Code.
However, Federal, state, and local laws are not the only things to consider when it comes to legal compliance. The master-planned community’s governing documents usually include provisions and stipulations. Failure to comply with these documents can lead to potential liability.
4. Coordinating Vendors and Services
A master-planned community can’t function alone. It must rely on vendors to take care of tasks such as landscaping, maintenance, facility management, security, and more. Professional companies can handle the hiring and management of vendors and ensure that all services are provided cost-effectively and efficiently.
Moreover, management companies usually already have a network of pre-vetted vendors and contractors. This will help the master-planned community save time in the selection process. Vendors also typically offer discounted rates to long-time clients, allowing the community to save money.
Master-Planned Community Management Made Easy
While master-planned community management shares some similarities with traditional HOA management, some differences set it apart. Managing such a large development requires careful coordination and long-term planning. Often, it is much more prudent to hire the services of a professional management company.
Personalized Property Management offers expert master-planned community management services around Southern California. Call us at 760-325-9500 or email us at info@ppminternet.com for more information!
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