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The Roles of Board Members in an HOA

Posted by IKO Community Management on September 19, 2013 at 3:52 PM

Wondering about how the relationship between your HOA board of directors and your management company works? Or maybe you are curious as to why your board needs a community management company. So how does it all work in a homeowners association? Read on…

Homeowners Associations, just like many other businesses, are managed by a board of directors. A HOA’s board creates and enforces the organization’s Covenants, Conditions & Restrictions, or CC&Rs, a document that dictates homeowner actions. The board is also responsible for all aspects of community management. However, most board members do not manage the community themselves. Instead, they often hire management companies, like IKO Community Management, to perform day-to-day operations.

Board of Directors

Most communities have a homeowners’ association, abbreviated HOA, which all owners in the community are required to join. The HOA is headed by a board of directors whose members are elected democratically. Most board members serve a term of not more than three years, and some can serve as few as a single year. Board members who do not satisfy their constituents can risk losing reelections. Typically, board member positions are unpaid. While each board operates a bit differently, many have a president, vice president, secretary, treasurer and members at large. Some board members share all of these responsibilities, while large boards have even more positions.

Board of Directors Roles

A HOA’s board of directors is responsible for financial, legal, physical and relational matters within a homeowners’ association. The board is required to collect and manage HOA fees, obtain insurance coverage for the building(s), retain a lawyer, handle the community’s legal affairs, create and enforce rules and regulations, maintain the property of common areas and communicate with homeowners about regulations, fees and legal matters. Board members must meet routinely and most have an annual meeting with all homeowners.

Management Company Roles

Because the list of responsibilities of a HOA’s board of directors is extensive, many boards delegate some of those responsibilities to management companies that they hire. Unlike boards of directors, management companies are employed by homeowners’ associations. A HOA’s management company is usually responsible for maintaining the property and ensuring that it is up to environmental standards, communicating with homeowners about CC&R violations, managing the association’s finances, handling questions and concerns from homeowners, obtaining and managing the community’s insurance policy and preparing reports.

Relationship Between Board of Directors and Management Company

The board of directors sets policies and regulations, while the management company enforces them. Though the board of directors may ask for feedback when creating policies, the management company cannot create policies or determine the consequences when they are broken – only the board can. The Management Company provides regular written reports to the Board that detail accomplished tasks and financial information.

Interested in community management for you community? IKO Community Management offers services for residential and commercial HOAs in the Washington DC, Maryland and VA area.

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Topics: HOA Board