Author: aam_admin

Understanding the purpose of, and the different roles in, your Community Association.

You’re not alone if you’re asking what the purpose of an annual meeting is and what the differences are between an HOA, the Board of Directors, and the Management Company. Understanding the differences will help you have an even better experience for yourself and your family living in an HOA.

What is the purpose of an HOA Annual Membership Meeting?

The budget is presented during the annual HOA meeting, and past achievements and future goals are discussed. Committee reports are shared, creating a forum for members to ask questions and engage with the board and management. Board elections for expiring seats occur, allowing homeowners to vote for new directors. The governing documents or by-laws typically outline term lengths and eligibility.

What is the purpose of an HOA?

Community Association Living (a CAI publication) describes homeowners associations designed to manage common or shared property, protect owners’ property values, provide services to residents, and develop a sense of community through social activities and amenities. All residents have an essential role in a community’s success, but board members have a particularly vital job.

HOA refers to homeowners’ association; essentially, the HOA is responsible for maintaining items that are not the individual homeowner’s responsibility. Someone has to represent those interests to ensure the community’s assets are maintained and replaced at the appropriate time, that the community’s budget is well funded, and that home values are kept at an optimal pace. This is where the role of a board member comes in…

What is my role as a board member?

Your role is a very important one. You are responsible for making decisions directly impacting your community’s operations and finances. As a volunteer board member, you’re a fiduciary, prioritizing the community’s interests above your own in decision-making. As a fiduciary, you must protect the community by managing the budget, funding reserves, collecting assessments, and ensuring insurance. In sum, you actively preserve and enhance property values. This is no easy task, so selecting a professional management company is critical.

What is the role of the management company?

The management company works for the HOA and is hired by the Board of Directors. We help the board preserve community assets, maintain property values, and manage HOA operations and finances.

The Board sets policy, and the management company implements those policies by making decisions. 

What are some examples of how a management company assists the Board? 

• Coordinates maintenance activities 
• Seeks out proposals and screens vendors (licensing and insurance requirements) 
• Manages human resource needs 
• Informs the Board when legal advice is necessary 
• Manages the association’s finances (delinquencies, budgeting, examining reserves, assessment collection, payables and receivables, financial reporting) 
• Works with professional partners: CPA, legal counsel, reserve specialist, and insurance agent 
• Guides the Board through day-to-day operations by having a strong understanding of governing documents, governmental laws, and state statutes
• Brings the element of “community” through lifestyle programming

Board of Directors:

Volunteer, Governs, Makes Decisions

Management Company:

Under contract, Manages, Carries Out Decisions

Identifying who does what provides an excellent foundation for understanding your community association. It clearly defines how to care for the community and directs residents to the right contacts for their concerns. It clarifies board leaders’ roles, the management company, and what they do, enabling focused success. It’s a true partnership between board members, management company team members, vendors, and residents. A strong partnership in all capacities equals a successfully run community association!

Have A Question?

If you live in an association and have questions about the purpose of an HOA, fill out our Contact Us form, and we will happily contact you to answer them. 

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• HOA Board of Directors Roles and Responsibilities
• How to Get the Most from Your HOA Management Company

As a Board Member, you rely on your HOA management company to facilitate the day-to-day tasks and responsibilities of the Association. Typically, the relationship between a Community Manager and the HOA Board builds into a smooth and seamless workflow where everyone is happy, and the Association flourishes. Unfortunately, this isn’t always the case for every association. Sometimes, the Board identifies noticeable gaps in performance or strong partnerships that aren’t built, which leads the entire community to feel the result of poor management and leads to switching HOA Management companies.

When issues arise, a tactical conversation with the management company is generally helpful in implementing new practices and correcting the concerns. Still, if a problem persists and a resolution is not met, the Association often decides to change management companies.

Here are the top five reasons Boards choose to switch their management company:

1. Slow Response Time
2. Lack of Transparency
3. Poor Oversight
4. Inadequate Technology
5. Lack of Support Staff

It is important to note that these five reasons are not in any particular order. Usually, the decision to make the switch results from many failed attempts to correct poor performance. Your community management company should prioritize customer satisfaction, create an environment of transparent communication, and be active in your Association.

If your Association is currently experiencing one or more of the reasons listed above and are considering switching HOA management companies, contact AAM today! We would be happy to talk about how AAM can deliver peace of mind to you, your fellow Board Members, and the community.

Making the Change to a New HOA Management Company 

Some of the most challenging decisions that board members face involve implementing changes without disruption to the Association. Changing management companies is often challenging, especially for Boards with no transition experience or a previous bad experience. Choosing a management company with a dedicated onboarding team ensures a secure, courteous, and seamless transition for your community.

At AAM, we have a dedicated Transition Team that begins working to guarantee a smooth transition from day one. Our team follows a precise transition plan that benchmarks task completion on 30 | 60 | 90 | 120-day increments. AAM leverages technology, communication, and experience to manage the Association while ensuring seamless customer service and financial management for residents.

As HOA Board Members, you understand the importance of demonstrating integrity and upholding your social responsibility in every decision made.  Due to the uncertainties of changing management companies, you should not have to compromise on a positive community management experience. AAM takes the guesswork out of the transition; let us show you how.

Why HOA Boards Stay with AAM

Simply put, our Boards choose to stay because we deliver exactly what they are looking for in a community management partner, giving them no reason to make a change. How do we do this? We listen to our customers, homeowners, and employees to better hone our focus on improved relationships and personal experience.

• We are Industry Experts that Focus on Your Peace of Mind

This concept goes beyond the communities we serve; we want our employees to also benefit from our strong support structure and resources to continue delivering the best service to our Boards, communities, and homeowners. 

• We Have Immeasurable High-Touch Service

Communication and attention to detail are a few of the qualities we are known for in the HOA industry. We have created various communication tools and channels to increase engagement and decrease frustration, making workflows more efficient and our services more appreciated.

• AAM is More than a Service Provider – We’re a Trusted Association Partner

We keep a pulse on the community by monitoring satisfaction and taking a proactive approach to ensure total peace of mind for all of our customers, just like YOU.

Best HOA Management Companies

When selecting a new HOA management company, you need a qualified team on your side. Our skilled team ensures quick responses, transparency, vendor oversight, and innovative technology for your community’s needs. Are you ready to develop an effective game plan for switching your HOA management company search? If so, contact us today.

As a Board member, you manage your Association’s money, property, and business. Serving on the Board positively impacts your community’s well-being. However, you must understand the fiduciary responsibility of HOA Board Members to serve responsibly and avoid legal liability.

Corporate Law and Fiduciary Duties

Corporate law outlines the fiduciary duties of HOA Board members under individual state laws. Most HOAs are nonprofit corporations formed by filing Articles of Incorporation. Since Board members serve in a position of trust, state laws impose a fiduciary duty on them. This duty requires board members to act in the best interests of the HOA. Fiduciary responsibility applies even though HOAs are nonprofit and Board members are volunteers.

The Three Components of Fiduciary Responsibilities

Fiduciary duties include three components: duty of care, duty of loyalty, and duty to act within the scope of authority.

Duty of Care

Research, research, research! Board members must make informed decisions, often requiring research before acting or voting on HOA matters. Learn your Association’s CC&Rs and state statutes. Board members must act prudently, use sound judgment, and avoid impulsive actions. For example, you can’t penalize a homeowner for painting their garage door orange and blue unless documents prohibit it. Acting with fiduciary responsibility requires thorough research.

Duty of Loyalty

Board members must act fairly, in good faith, and in the Association’s best interest. Personal interests or gain must not influence decisions. Avoid conflicts of interest. For example, abstain from voting on vendors if a friend or family member owns a competing company. Loyalty to fiduciary responsibility maintains trust.

Board members must also protect confidentiality. Do not disclose this information if a homeowner shares financial struggles to arrange a payment plan. Confidentiality is a critical part of fiduciary responsibility.

Duty to Act

Boards must perform required duties and avoid acting beyond their authority. Their authority comes from state laws and Governing Documents. These include Articles of Incorporation, Bylaws, CC&Rs, and Rules and Regulations. Boards must follow laws and Governing Documents when performing duties. Aligning actions with fiduciary responsibility prevents overstepping.

Upholding Fiduciary Responsibility

Fiduciary responsibilities are essential for community leadership. Your management company should provide tools and encourage Board training. If you have questions, contact your community manager.

Understanding fiduciary responsibility is crucial for an HOA Board member. Following the duties of care, loyalty, and authority protects you from legal issues and benefits the community. Your management company should offer support and training to help you navigate these responsibilities. Prioritize informed decisions, act in the community’s best interest, and uphold Board integrity.

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