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The Difference Between HOA and Property Managers (and Why it Matters)

By Jessica Galeano

The_Difference_Between_HOA_and_Property_Managers_and_Why_it_Matters.jpgGiven the fact that they share the same industry and similar job duties, it’s easy to understand why many people confuse home owners associations (HOA) with property management companies. In reality, the function and scope of the two jobs are actually quite different. In many cases, the two will work in conjunction to manage a property and/or housing community, but most times they work entirely independent of one another. If you’re not quite sure what the difference is yourself, let’s take a closer look.

What is an HOA?

When it comes to certain housing arrangements, such as condos and subdivisions, the result is a community that is made up of a number of different owners. The individuals or families residing in each unit often share responsibilities for things like property upkeep. They may also all share the same expectations for how properties will be maintained. To formalize these responsibilities and expectations, the community may form a home owners association that will be charged with developing and enforcing rules that everyone living there must abide by.

An HOA is made up of residents of the housing community in question and is governed by a board of individuals who are voted into each position by other members. In addition to creating and enforcing community rules, the home owners association is also typically responsible for:

  • Maintenance of common areas, such as pools and playgrounds
  • Establishing, collecting and allocating dues to pay for things like security and maintenance
  • Determining and managing budgets for all necessary HOA expenses
  • Obtaining adequate insurance coverage for all common areas
  • Hiring and managing staff and contractors, including maintenance and security professionals

To assist with all of these responsibilities, sometimes an HOA will choose to hire a property manager or property management company. This is where the two areas often collide.

Get your free copy of The Property Manager’s Guide to Proactive Management — and make the time necessary to plan for an extraordinary future.

How do property managers and HOAs work together?

There are a number of different scenarios in which a community may be managed by both a home owners association and a property manager. Most of the time, this occurs when the HOA hires the property management company to carry out many of its duties, as mentioned above. The duties assigned may vary, but often include things like overseeing contractors and other staff, collecting HOA dues, communicating with residents and dealing with any emergency situations that may arise.

In some instances, property managers may also be owners within a community that is governed by an HOA. In cases such as this, they are essentially just like every other owner and must abide by the same rules as everyone else in the community. Things can get somewhat sticky in these types of situations, particularly when the property manager rents the home or condo he owns to someone else. It’s important that the rules and regulations are still adhered to, regardless of who is actually living in the residence.

What kind of authority does an HOA have?

Many people are surprised to learn that home owners associations have the legal authority to enforce their own rules, up to and including putting a lien on a property for things like non-payment of HOA dues. Should a particular rule be broken, the HOA will typically issue a warning before taking action. For example, if a property isn’t landscaped as agreed upon in the rules and the initial warning is ignored, the HOA might take matters into their own hands and hire someone to take care of the issue at the expense of the owner in question.

s you can see, there are marked differences between an HOA and a property manager, despite the fact that the two often work closely together. Knowing this difference can help you determine what type of living arrangement and property management situation would be the best fit for your particular needs.

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Get your free copy of The Property Manager’s Guide to Proactive Management — and make the time necessary to plan for an extraordinary future.

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