Author: aam_admin

Who does what? 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 while living in an HOA.

What is the purpose of an HOA Annual Membership Meeting?

During the annual HOA meeting, the budget is presented, 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?

As described in Community Association Living (a CAI publication), homeowners associations are 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 important role to play in a community’s success, but board members have a particularly vital job.

HOA refers to homeowners association and essentially, the HOA is responsible for the maintenance of items that are not the individual homeowner’s responsibility. Someone has to represent those interests to ensure the assets of the community 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’ve been elected to make decisions that will affect your community, both operationally and financially. 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 protect and enhance property values. This is no easy task, and that is where 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 implementing its 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 a great 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 gives board leaders clarity on their 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. 

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 commonly one of those decisions, especially if the Board has never been through a transition to a new management company or has had a bad experience. When you make a change to a management company that employs an entire team dedicated to improving the onboarding process, you can rest assured your community and its residents will experience a secure, courteous, and seamless transition.

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, depending on the size of the community. Leveraging the power of technology, communication, and overall experience, AAM can assume management of the Association while simultaneously providing excellent customer service and financial management to the residents without interruption.

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 are entrusted with the money, property, and day-to-day business of your Association. Serving on your Association’s Board can be an important way to positively impact and maintain your community’s well-being. However, to serve responsibly and avoid potential legal liability, it is important to know your fiduciary responsibility as a Board member.

Under Corporate Law, the fiduciary duties of Community Association Board members are outlined by individual state corporate law. Most HOAs are nonprofit corporations, typically formed by filing Articles of Incorporation in the state in which the community is located. Recognizing that a corporation’s Board members serve in a position of trust, every state’s corporation law imposes a fiduciary duty on the Association (a.k.a. corporation’s) Board of Directors, requiring them to act in the best interests of the HOA. This fiduciary responsibility applies to HOAs even though they are typically nonprofit corporations and HOA Board members serve as volunteers.

The Three Components of Fiduciary Responsibilities

Your fiduciary duties involve three basic components: the duty of care, the duty of loyalty, and the duty to act within the scope of authority. Understanding fiduciary responsibility in these areas is crucial.

Duty of Care

Research, research, research! To meet the duty of care, Board members must make informed decisions. This may require a little or even a lot of research before you act or vote on an HOA matter. Familiarize yourself with your Association’s CC&Rs and your state statutes. Board members must also act in a prudent and reasonable manner, use sound business judgment, and avoid uninformed or impulsive actions. For example, you can’t discriminate against a homeowner for painting his or her garage door orange and blue just because you don’t like that color if it is not in violation of the Association documents. Here, acting with fiduciary responsibility by researching thoroughly is key.

Duty of Loyalty

Board members must act fairly, in good faith, and for the benefit of the Association as a whole. Board members must not make decisions based on personal interest or gain. Board members should also avoid acting where there is a conflict of interest. For example, a Board member who is helping select a new landscape vendor for the property should abstain from voting if a close friend or family member owns a landscape company participating in the bid process. Loyalty to fiduciary responsibility is essential in maintaining trust.

Additionally, a Board member must protect members’ confidentiality and not divulge information provided in confidence. For example, if a homeowner confides in a Board member about their impending home foreclosure in order to arrange a payment plan for dues, the Board member should not disclose this information to a friend or neighbor. Confidentiality is a crucial aspect of fiduciary responsibility.

Duty to Act

This requires the Board to perform the duties it is obligated to carry out but prohibits the Board from making decisions or acting on matters without the authority to do so. The authority of the Board comes from its obligations under state laws, as well as the authority granted to it in the Governing Documents, specifically the Articles of Incorporation, Bylaws, CC&Rs, and Rules and Regulations. In short, Boards must obey applicable laws and their Governing Documents while performing their duties. Ensuring all actions align with fiduciary responsibility prevents overstepping.

Your fiduciary responsibilities are one of the most important components of being a community leader. It is important that your management company provides the tools for you to succeed as a Board member and should encourage you to attend board training sessions. If you have specific questions about your fiduciary obligations as a Board member you can always reach out to your community manager. 

In conclusion, understanding and upholding your fiduciary responsibility is crucial to your role as an HOA Board member. By adhering to the duties of care, loyalty, and authority, you not only protect yourself from potential legal liability but also ensure the well-being and success of your community. Remember, your management company should be a valuable resource, providing the support and training needed to navigate your fiduciary responsibilities effectively. Always prioritize informed decisions, act in the best interest of the community, and stay committed to the integrity of your Board position.