What is a Homeowners Association (HOA)?

 

An HOA is an organization of homeowners of a particular subdivision, condominium, or planned unit development. The purpose of an HOA is to provide a common basis for preserving maintaining and enhancing their homes and property. Most HOAs are non-profit corporations, as is the Seagate Terrace HOA. They are subject to state statutes that govern non-profit corporations and HOAs. The associations provide services, regulate activities, levy assessments, and impose fines. Usually, each member of an HOA pays assessments. Those assessments or dues are used to pay for expenses that arise from having and maintaining common property.

 

What’s the difference between the HOA board and the management company?

 

The Seagate Terrace HOA board and the HOA management company, GRG Management Inc., are two separate entities. The HOA board is comprised of elected volunteers who own property in the community and live there. The HOA management company is an outside vendor contracted by the HOA.

 

The Role of the HOA Board

 

The HOA board has two main duties:

• ·      Acts a fiduciary for the non-profit HOA corporation

  • This means that they’re entrusted with making the decisions that affect the values of the properties in the community. One of the board’s primary responsibilities is to protect, preserve, and enhance the value of the physical property governed by the community association.  The board also oversees the performance of the HOA management company 

• ·      Facilitates the enjoyment of the community

  • This involves setting and implementing the rules and regulations for residential use of common spaces, landscaping standards, and anything else that affects the overall residential environment of a community.​

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The Role of the HOA Management Company

 

As mentioned above, the management company is a vendor, hired by the HOA board. They act as agents of the HOA corporation. The management company is a fiduciary and has two core duties:

• ·      Provides helpful business advice

  • As experts regarding the laws that affect property values in a particular area, HOA management companiesare counted on to offer unbiased, well-researched recommendations to help HOA boards make the most prudent and effective decisions to preserve and enhance the value of the property.

 

• ·      Implements the direction of the HOA board and facilitates day to day operations in the community

  • The management company implements the HOA governing documents, including the CC&Rs, Bylaws, Articles of Incorporation, and Architectural Review Committee Design Guidelines. This can range from issuing notices to homeowners for minor infractions to acquiring independent bids for service providers that affect the community. The management company does not have the final say in how rules are written; they simply ensure that residents follow the HOA regulations and HOAs follow legal regulations.

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What can a homeowner expect from their HOA board?

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Members of the board are elected volunteers who should act in the best interest of the HOA, no matter their private opinion or personal bias. In addition, board members are expected to:

·      Act in a fair and consistent manner

·      Refrain from voting on issues or making decisions that present a conflict of interest

·      Maintain confidentiality

·      Treat homeowners and other board members with respect during discussions and throughout any dispute resolution

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What can the board expect from the HOA management company?

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The HOA management company does not establish any rules or regulations for a community. Their role is to implement the governing documents and guidelines set by the HOA. They will simply act upon the rules that the HOA sets. The management company ensures the HOA is working in accordance with the state and national laws that protect homeowners.

 

How do management companies help the board?

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The management company is the board’s closest and most trusted business relationship. They are counted on having the best interest of the HOA in mind and working to protect and increase property values in the community. They do this by implementing HOA management resources such as ensuring the community common area looks great, ensuring the HOA liability exposure is low, and helping to build a sense of community through good communication with the board and homeowners.

 

Sources:

https://definitions.uslegal.com/h/home-owners-association-or-hoa/

https://www.kppm.com/rules-and-expectations-of-managers-and-hoa-boards-of-directors/

https://www.boardeffect.com/blog/board-of-directors-vs-management/