Category: Articles

HOA Board of Directors – Who are they, and what do they do? Generally, an HOA Board of Directors is made up of community volunteers elected by fellow residents to serve on the Board to make decisions on the residents’ behalf regarding the HOA.

Below is a brief overview of the HOA leadership roles and duties. 

What is the structure of your HOA Board of Directors? 

In general, the Board of Directors consists of five (5) officers:

President:

The HOA President role, is preformed by someone who is knowledgeable of the community’s governing documents, oversees the community association’s operations by ensuring orders and resolutions are carried out, as well as signs contracts and co-signs checks. He or she leads all meetings acting as the foreman.

Vice President:

The Vice President performs other duties as required and will take the place of the President when necessary. Equally, the Vice President should have in-depth knowledge of the community bylaws and regulations.

Secretary:

The Secretary keeps meeting minutes, records votes, and maintains compliance with essential association documents.

Treasurer:

The Treasurer keeps track of the association’s finances and reports on monthly financials at board meetings.

Member at Large:

The Member at Large acts as the fifth voting member of the Board, as well as conducts other assigned duties.

What are the primary duties of your HOA Board?

The HOA Board members must ensure that the community is maintained by enforcing the community’s CC&Rs and Bylaws. Most importantly, Board members should be fair, honest and keep the homeowner’s and the association’s best interest in mind when making decisions.

What is the relationship between the Board of Directors and your professional community management partner?

As community volunteers, the majority of HOA Board’s elect to hire a professional community management company to leverage their expertise on community governance, ongoing maintenance, and resident communication. In partnership with the Board, the professional community management company helps provide structure to a community, protect property values and ensure positive living environments.  

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Have A Question?

If you live in an association and have questions about Board Member Roles and Responsibilities, fill out our CONTACT US form, and we will happily contact you to answer them. 

Fair housing and HOA enforcement are key aspects of community association management, often creating conflicts among homeowners. Enforcement actions are frequently seen as one of the most contentious issues within a Homeowners Association (HOA). The Board of Directors must navigate enforcing the association’s governing documents while ensuring compliance with the Fair Housing Act (FHA), which prohibits discrimination based on race, color, disability, religion, sex, familial status, and national origin. Balancing fair housing requirements with consistent HOA enforcement remains a critical responsibility for association leadership.

Understanding Fair Housing Act (FHA) Compliance

Although associations are subject to the Fair Housing Act Regulations, few Boards are familiar enough to distinguish the multitude of ways they could expose the association to discrimination claims. Under FHA HOA requirements, an association may not legally refuse to make the reasonable accommodations necessary for homeowners to enjoy and utilize their homes fully. A common mistake a Board makes is failing to offer reasonable accommodations for homeowners with special needs or disabilities and basing their enforcement solely on the language of the governing documents rather than exploring the extenuating circumstances that may lead to an alternate decision. It is important to render enforcement case-by-case, making reasonable accommodations for homeowners when necessary.  

Examples of Fair Housing Violations in HOA Enforcement

Driveway Modifications for Accessibility

A Board denies a homeowner’s request to expand the width of their driveway to accommodate their wheelchair. The governing documents state that residents’ driveways cannot exceed 10 feet wide, this would violate the FHA. Governing documents cannot override fair housing requirements.

Service Animals and HOA Pet Policies

If an owner requires the assistance of a service animal, an HOA must waive its “no pets” policy. Refusing a reasonable and necessary accommodation that allows a disabled owner full enjoyment of their home violates the FHA.

Recognizing these implications and enforcing them reasonably can help an association avoid FHA violations, costly lawsuits, or severe penalties. Relying on professional management and legal experts helps communities stay FHA-compliant and avoid penalties.

Consistent and equitable enforcement in an HOA and a Community’s governing documents, including the CC&Rs, is critical in creating a balanced, successful Association.

Know the Governing Documents

The first step to consistent HOA enforcement is understanding the Community’s CC&Rs and Design Guidelines. Homeowners should read them thoroughly. Board members must also understand these governing documents. The Community Manager should ensure they are thoroughly familiar with all guidelines. Governing documents may also include specific requirements or restrictions for each unit/lot, and members should be aware of all conditions. This step is essential because each Community’s governing documents can vary greatly. HOA rules, including backyard rules, differ. For example, one Community may allow a 12-foot playground structure. However, your new Community may not permit this. You cannot assume rules are the same everywhere.

Regular Inspections

The second step to consistent HOA enforcement is scheduling regular compliance inspections per the Association’s Governing Documents. Regular inspections will help ensure that items not in compliance will be identified and addressed promptly. It is also essential that an appropriate HOA Fine Policy be established and approved by the Board of Directors. A Board-approved Fine Policy gives the guidance needed to help ensure that all residents follow the Community’s rules and that the consequences of non-compliance are reasonable.

Consistency

Lastly, “consistent” means constantly adhering to the same principles, course, or form. Consistent enforcement requires applying governing documents in every case. Each non-compliance issue should be treated the same, following the Board-approved Fine Policy. A Community Manager should not ignore a clear violation for one week and address it later. This standard also applies to the Board of Directors. They must support the consistent application of governing documents by the Community Manager. Board members should remain objective, even when compliance issues involve friends or neighbors.

Consistently enforcing CC&Rs and Design Guidelines builds trust with homeowners. This creates a foundation for a successful Association. The Community Manager and Board must apply all governing documents fairly and consistently. This approach fosters understanding and strengthens the community.

• HOA Selective Enforcement

Annual Meetings for homeowners associations are a crucial component for keeping the business of the association moving forward. In addition to holding the annual HOA Board elections, where new members are elected to the Board of Directors by their fellow homeowners, Annual Meetings also serve to update the homeowners on what is happening in the community. This is a meeting of the members and not a typical Board meeting where the Board of Directors is making decisions for the community.

The timing of your community’s Annual Meeting depends on the requirements indicated by your Association’s Bylaws. The meeting is typically held at the same time each year. Planning the Annual Meeting should begin several months before the meeting date to achieve the best results. Some communities require that a nominating committee be formed to select candidates for the Board.  Securing a meeting location is also imperative, and it is essential to book the venue early, as some places that do not charge for meeting space may be booked months in advance.

Below are some helpful planning tips: 

• Confirm available dates with the Board of Directors
• Schedule the location of the meeting
• Obtain Certificate of Insurance, if necessary (Most meeting venues require this, which would include the venue being named as additional insured for liability purposes)
• Prepare meeting notice signed by the Board secretary, if required by governing documents
• Send out a questionnaire to members to help prepare for questions in advance of the meeting
• Mail HOA Annual Meeting Notice within the timeframe noted in CC&Rs and/or Bylaws
• Be prepared for the meeting with the following items: sign-in sheets, delinquency reports, ledger cards, election ballots, quorum requirements, financial statements, meeting agenda, and any handouts.

The following are items to complete after the Annual Meeting:

• Work with the Community Manager to compile the list of Board members, including the newly elected members. Ensure that the new Board Members have filled the terms and are carefully tracked in communities that provide for staggered terms. 
• Schedule the first Board of Directors meeting post-election/Annual Meeting. This is typically the meeting at which the Board Members will determine the association’s officers.   
• Prepare Annual Meeting minutes.
• Update the bank accounts to remove previous Board members and add new Board Members.

Do you still have more questions about the HOA Annual Board Meetings? Contact AAM today to discuss your HOA’s needs.

Some of the benefits an HOA management company provides include:

• Clarity – Management companies help ensure the HOA rules, regulations, and policies are clearly defined and communicated to members. They also make sure these rules make sense and are easy to follow.
• Consistency – A good management company enforces homeowner associations rules and policies with consistency. The management company makes sure there’s no perception of unfair treatment or favoritism among members. They will also deal with problems as soon as they surface.
• Legal Knowledge – A management company is often very knowledgeable regarding legislation affecting homeowner associations. The company will understand how the HOA’s policies and enforcement of the policies best conform to the law.
• Varied Expertise – An HOA management company will have diverse professionals on staff, including experts trained in community management, finance, accounting, information technology, human resources, marketing, and more.
• Vendor Management – Management companies are experienced in building solid vendor relationships.  They know how to keep issues from escalating. Vendors may be more inclined to work with professionally managed HOAs because they know the chances are high that the community will be well-run.
• Neighborhood Commitment – Homeowners need to feel the management company is maintaining a safe, well-managed neighborhood that is meeting their expectations. It’s in the management company’s best interest to make all the members of the community satisfied with their services.
• Effective Communication – An HOA management company can open the lines of communication among members. Everyone within the community must feel comfortable voicing their concerns and ideas. A professional management company with multiple communication tools can bring more to the table than just enforcing HOA rules.

What Type of Community Should Hire an HOA Management Company?

Often, size dictates whether an HOA hires a management company. A smaller community may opt to be self-managed, whereas a larger HOA may find it impossible to conduct business without the help of a trained professional.

Although size is one criterion, it’s not the only deciding factor. A better way to decide whether to hire a professional HOA management company is to consider the following:

• Does the HOA manage many buildings, amenities, and properties?
• Does the HOA lack volunteers to manage the association?
• Do the volunteers lack the skills and expertise to do the necessary HOA management work?

Some HOAs may find they need to supplement their volunteer work with an outside professional management company.  For example, maybe the HOA management company will handle some of the accounting functions and Board member volunteers manage homeowner association rules and communications.

However responsibilities are delegated between the Board and management company, the focus should always be on keeping current members happy and involved.

When it comes to HOA management, the primary qualification for any community association is trust. You absolutely must trust the company you hire to manage your homeowner’s association. But first, you need to develop a short list of qualified candidates.

Running an HOA involves managing a lot of projects and tasks. So, experience and expertise should represent the initial qualifications. After you separate the best-qualified HOA management companies from the less capable ones, you can delve deeper into finding the best match for your community association.

Your selection committee should expect to spend ample time during the evaluation process. Given what’s at stake, you don’t want to rush this important decision. Making sure you cover all your bases takes time, discipline, and effort.

Look Within Before You Look Outside

If you don’t already have a search committee in place, put one together before the evaluation process begins. The search committee can have any number of members, depending on your Association.

Before you begin your search for an HOA management company, make sure you understand exactly what your community association needs. Your committee members should each make a list of what they think are critical requirements. Then, you should compile one master requirements list based on everyone’s input.

Search for Industry Certified Management Company

It is a best practice to consider management companies that promote staff being certified by local and national industry associations such as the Arizona Association of Community Managers (AACM) and the Community Associations Institute (CAI). These organizations were established to improve the professionalism of community management through on-going education and proactive support.

AACM’s Certified Arizona Association Manager (CAAM®) education program provides the only Arizona-specific professional certification for Community Managers. An AACM-certified management company can instill a greater level of confidence in the management company’s qualifications. In addition, CAI offers various certifications for community management industry professionals, including the Certified Manager of Community Associations (CMCA), the Association Management Specialist (AMS) certification, and the Professional Community Association Manager (PCAM).

Finally, you’ll want to consider the company’s bonding and insurance, including liability and workers’ compensation. State laws will outline the minimum standards. Make sure to ask for a copy of all insurance certificates to confirm proper coverage.

Internal Processes for HOA Management Company

Once you establish a list of management companies meeting the minimum qualifications, you can begin looking inside each candidate to determine the best match. For example, any HOA management company you select must demonstrate stringent internal hiring practices.

Your evaluation should start with checking references. A good track record with other community associations is a good indication of how they will perform for you. You’ll also want to visit the company’s offices and the facilities they manage in person. These visits will give you a good idea of the type of services they provide to other clients and how they perform them.

Read the Fine Print

When you make your selection for a management firm, don’t skip reading all the terms of the contract.  Don’t rely on standardized contract forms. Instead, have your Association attorney review all legal documents and make changes accordingly.

It may also be a good idea to enter into an agreement for a shorter period of time. Rather than commit your community association to a multiple-year agreement, try a one-year arrangement instead. You can then fully evaluate the management company to ensure it’s a good fit for your Association. If it’s not, you won’t be locked into keeping them for a long period of time.

In addition, make sure you understand termination clauses. Your community association attorney can help finalize an agreement that’s in your best interest. A typical termination clause involves a 30-day notice.

Finally, know all the costs associated with your HOA management company’s services. Are all the fees clearly outlined in your proposal and agreement? You don’t want to find you’re paying a bunch of extra fees you didn’t know about. When you’re evaluating competitive management companies, make sure you compare apples to apples with costs.

It is never too early in the year to start thinking about HOA budget preparation for your association. AAM begins the yearly budget preparation timeline with budget training sessions for Community Managers in August. The Association Board of Directors also plays an important role in the budget process, so we feel it is important to share a few budget questions for your consideration. August is right around the corner, so let’s get ready for budget season!

Key Questions to Consider During HOA Budget Preparation

Please consider the following during your HOA budget preparation:

• How well is the association performing versus the current year’s budget?
• Is operating cash flow for the association trending up or down over recent years?
• Is the current budget meeting the expectations of homeowners?
• Have changes in economic factors impacted the assessment level?
• Are reserve contributions at an appropriate level to ensure long-term financial health?

Reviewing the Current Year’s Budget Performance

Before diving into a fresh budget season, it is important to compare the current year’s budgeted income and expenses versus actual financial activity while focusing on HOA budget preparation. AAM provides a month-to-date and year-to-date variance report in the monthly financial package that explains why certain income or expense activities are over or under budget. If additional details are needed, the community manager and accounting department will be happy to provide information for budget decision-making purposes.

Managing Cash Flow and Operating Expenses

Under normal circumstances, the yearly operating income and expenses of the association are fairly predictable. With that being said, there is not a lot of room for error in a zero-based budget. Planning for the worst-case scenario will help ensure adequate cash is available to cover operating expenses. Start the budget process by taking a conservative approach and make adjustments as needed during HOA budget preparation. Balance sheet information is sometimes forgotten during the budget process, so please remember to take a look at cash flow trends for the past few budget seasons. Maintaining a modest operating cushion is acceptable, and it will help the association cover any unexpected expenses that might arise from time to time. If nothing unexpected occurs, then it provides an opportunity to fund community enhancement or make an additional reserve contribution.

Aligning the Budget with Homeowner Expectations

Members of the association buy property with certain expectations in mind, and some of them are not shy about sharing feedback when those expectations are not met. As this feedback is gathered each year, there is an opportunity to make adjustments and improvements through the budget process.

Associations vary in size, design, lifestyle, amenities, and owner demographics. Some of these variables may change over time, so the budget will also evolve. If new expenses or services are being added to the budget, they should be carefully evaluated. The short and long-term impact should be considered, as well as how the association will cover the expense. Enhancements to the community covered by operating funds also impact long-term reserve planning, especially during HOA budget preparation.

Evaluating Economic Factors and Assessment Adjustments

Unfortunately, economic factors such as wages or the general cost of services may increase each year. Increases in minimum wage requirements in some areas of the country have impacted many vendors over the last few years. Each year, the Board should carefully evaluate whether an assessment increase should be approved. In most cases, large assessment increases can be avoided by implementing smaller increases at the appropriate time. This will help avoid unpleasant surprises and special assessments.

Planning for Reserve Funding and Long-Term Stability

Planning for Reserve Funding and Expenditures is essential to the association’s long-term financial health. Associations should have a Reserve Study that identifies major replaceable components. Component details include the remaining useful life of an item at the time of the study, typical life spans, and estimated future replacement costs. The study combines this data into a 30-year schedule of repair and replacement activity. Careful analysis of the yearly reserve contribution recommended in the study is important when considering how much the association should contribute to reserves as part of the annual budget and during overall HOA budget preparation. The Reserve Study should be updated as necessary, with new studies performed every three years or as the governing documents instruct.

The budget is a financial roadmap to ensure the association successfully navigates through each year of financial activity. The budget also serves as a guide for long-range strategic reserve planning, a critical aspect of HOA budget preparation. 

• Association Budget Preparation 101
• Guide to HOA Budgets
• Budgeting Tips for Master Planned-Communities
• How to Increase HOA Homeowner Participation

Top Five Considerations for Selecting an Association Management Company

As Board members of an HOA, you recognize the time and effort typically involved in conducting a search for professional community association management. In order to help with the search and to better evaluate management company candidates, below are the top five considerations for selecting an association management company as your community management partner.

Communication 

Effective and prompt communication plays an important role in community management and the overall success of a community. Partnering with a management company that emphasizes and promotes a strong communication plan is crucial for selecting a community association management company. Boards and homeowners need to stay updated and informed on what is happening in their community.

A well-suited management company believes in always being there for their homeowners and Board members, treating them with the utmost courtesy and respect. They accomplish this by making themselves readily available to answer questions, solve problems, and address any issues that should arise, through email, web, telephone, or in person.

Innovation in Technology 

In today’s technology-driven world, a well-qualified management company will continue investing in technological solutions and service offerings that enhance both management productivity and the user experience of their Boards and homeowners when selecting a community association management company.

Ensuring that Board members and homeowners have access to the best technology available should be a top priority of your community management company. Technology services offered should provide the Association with an array of helpful tools, adapt to the community’s specific needs, and be secure, productive, collaborative, and efficient.

Client Longevity 

A well-established management company will have an extensive portfolio of long-term client partnerships and first-rate references. A significant percentage of its current client base will have been with the company for several years. This continued partnership speaks volumes about the level of services when selecting a community association management company.

Other factors to consider about a management company’s client base includes their size and growth. Is the company’s client base growing or stagnant? When’s the last time they added a new community? How many communities have they added in the past year?

Also, the HOA should evaluate the range of associations the company serves. In other words, is the focus broad or narrow? A full range of association management would include master-planned communities, active adult communities, traditional neighborhoods, condominium properties and more. The HOA should select a management company with experience in its community type.

Qualified People

The services of the community association management company will only be as good as the experience and expertise of the people providing them. Therefore, to deliver the highest standards, the company’s people must be highly trained and motivated. In certain positions, professional credentials are required. In particular, HOAs should evaluate the management company’s executive team, community managers, human resource department, accounting personnel, information technology department, and support staff when selecting a community association management company.

For example, do key personnel hold college degrees and/or professional certifications/designations? Does the company promote a positive culture that drives both success and employee satisfaction?

On-going Education 

Continuing education and training is essential for both the community association management company’s internal staff and the HOA’s Board members. The management company must make it a priority to invest regularly in staff training for everyone involved in managing the community, as well as providing training opportunities for Board members.

On-going education and training ensures that community management professionals have the skills needed to help communities succeed by keeping current on all issues, legislative updates and best practices concerning association management. Additionally, providing training opportunities to HOA Board members helps develop the skills and knowledge necessary to effectively lead their communities and make informed decisions. Selecting a community association management company that prioritizes education is vital.