Property Management

homeowners association

Chances are you live somewhere with a homeowners association, but how are they led and governed? Check out this handy guide to find out.

Did you know that 62 million people live in an estimated 315,000 association-governed communities–and seven out of ten people are very happy with their communities?

A homeowners association is so much more than a group of people deciding what trees are allowed on your front lawn. It’s an investment in the wellbeing and happiness of your entire community, and it all starts with great governance.

Here’s a closer look at roles in HOA boards and how those roles fit together to achieve successful HOA governance and positive outcomes for the whole community.

What is a Homeowners Association?

A homeowners association, or HOA, is the governing organization of  a subdivision, planned community, or condominium building. It makes and enforces rules for all members, which are all homeowners within the community. It’s a bit like an apartment building’s management company in that respect, except that HOAs are run by volunteer members who live in the community.

Roles in HOA Boards

HOAs always consist of HOA boards, which are the Association Manager and the Board of Directors. The Board of Directors consists of a president, vice president, secretary, and treasurer, though some HOAs may add other roles depending on the needs of their community.

Association Manager

While the HOA is largely comprised of volunteer members, the association manager, sometimes called the community association manager, is the only professional role in the group. They may be hired by the Board of Directors or the property management company.

The manager’s role is to provide a professional counterpart to the rest of the HOA, primarily in an advisory role to offer administrative, operational, and managerial counsel to the Board. Since the Board is comprised of interested volunteers, this role is essential to deliver professional property management that homeowners expect.

They also help facilitate day-to-day operations of the community, which is where their connection with the property management company comes in. Because they’re a paid professionals, they know how to advocate for professional services that the community needs, like contractors, and they know how to handle various professional aspects of running a community, such as soliciting and evaluating work bids. They also know the latest regulatory guidelines and assist the board in maintaining financial records.

Board of Directors

Working in tandem with the association manager is the board of directors, which generally consists of four roles: the president, vice president, secretary, and treasurer.

The president is the leader of the Board of Directors and the homeowners association as a whole. Think of them like the CEO of the company (if your company were a community). They schedule board meetings, set meeting agendas, preside over meetings to ensure the board stays on track, execute legal documents, and represent the homeowners association board to the residents.

The vice president is the second-in-command–and a more vital role than many people realize. The role varies widely between one Board of Directors and the next, but generally, the vice president’s primary job is to fill in for the president in any of the president’s typical duties. When they’re not doing that, they fill other duties not ascribed to other positions and serve as a liaison between the community, the board, and the president.

The secretary’s job is to keep records on the HOA’s behalf. For example, they record minutes for each board meeting and maintain accurate financial records. When HOA members ask for information, the secretary is the one who provides it.

The treasurer is the most specialized job of the four, since the treasurer handles all incoming and outgoing financial transactions–including financial records for audit purposes. For this reason, the treasurer must be someone with finance experience to ensure all transactions are handled correctly and all records are maintained properly.

How HOA Management Works Together to Achieve Governance

Think of HOA governance like the foundation of your house: remove any structural element and the rest crumble. No individual position runs the whole show. Instead, you need everyone working together to achieve a good result.

For example, while it’s the president’s job to schedule board meetings and plan what each meeting will contain, the secretary is the one who keeps meeting minutes while the president runs the meeting. Or, put another way, the president sets the plan and enforces follow-through, and the secretary verifies that follow-through in real-time.

Similarly, while the association manager is the one who solicits vendor bids, the treasurer has to work with them to manage all transactions and financial records. And if you happen to be audited, the secretary, treasurer, and association manager work together to make sure all the records are in order and made available upon request.

In this respect, high-quality, cooperative HOA leadership is the secret sauce behind successful governance. If you have clean, pleasant common areas, on-time contractors, and swift response to any of your concerns, that’s all to the credit of good HOA governance.

We Make It Possible for HOAs to Succeed

We know that a great homeowners association can make a world of difference in your lived experience in a community. That’s why it’s our job to ensure you get the best results from your HOA, whatever your community looks like.

We provide a full range of expert HOA management services in Summit County, Colorado, from financial management to property management to administrative services. In short, we make sure your community is exactly what you want it to be–and then some.

So if you’re ready to fall in love with your community, get in touch today to find out how our team can strengthen your HOA.

There are a lot of moving parts in an HOA. The best place to start learning how an HOA works is to understand the jargon used by HOA’s and HOA managers. In future articles, each of these major topics will be covered in more detail. Let’s start by looking at the governing Board, beginning with the Association Manager.

Association Manager

The role of the Association Manager is to advise and provide administrative, managerial, and operational counsel to the Association governing body. The Association Manager is expected to:

• Exhibit professionalism and loyalty to the principal (the Board)
• Exercise diligence in performing duties on the principals’ behalf
• Account for financial activities covered by the Management Agreement
• Perform onsite property inspections
• Solicit and evaluate bids for association services
• Supervise maintenance activities and contractor performance
• Oversee and authorize payment for primary association services
• Know and abide by the Association’s Bylaws, recognizing the State agency that supervises the community associations

The Board of Directors

The Association Manager works with the Board of Directors to ensure that HOA members are following HOA rules and benefiting from being part of the HOA. Depending on the management agreement, some of the following responsibilities can be turned over to a managing company.

President

• Chief executive officer and leader of the Association
• Presides at all meetings of the Board and membership
• Executes legal documents on behalf of the Association
• Sets meeting agendas and controls all meetings
• Represents the Board before the residents
• May have nominating, if not appointment, responsibility for all committees

Vice President

• Performs all of the duties of the president in his/her absence
• Typically shares some of the burdens of the president regarding appearances, liaison, public hearings, etc.
• Usually assigned liaison responsibility to specific staff or contractors and specific committees

Secretary

• Prepares and distributes Board and membership meeting agendas, minutes, and materials referred to in minutes
• Maintains minutes and book on all meetings
• Maintains book of resolutions
• Maintains all official records, including official correspondence, contracts, membership roster, etc.
• Receives, verifies and supports all proxies
• Attests, by signature, to the legitimacy of certain documents

Treasurer

• Works with appropriate staff, contractors, and committees to develop and submit an annual operating budget for approval
• Maintains adequate records of all association financial transactions
• Maintains roster of disbursement of funds, as authorized
• Prepares period financial reports
• Arranges, subject to board approval, an independent audit of financial affairs

PERSPECTIVES OF BOARD, HOMEOWNER, AND MANAGER

Understanding the perspectives of the various stakeholders in an HOA is very important as each body has its perspective, goals, and objectives. Good communication keeps all the disparate parts working smoothly.

Board of Directors Perspective

• Maintaining the value of the property and good quality of life for the residential community
• Governing smoothly
• Enforces rules
• Establishing and keeping budget

Homeowners Perspective

• Most care a great deal about residences
• Will want service from manager and decisions from Board that will provide a good quality of life
• Problems may arise when expectations are too high or not realistic; this can occur when interests are too specialized or unique

Managers Perspective

• Working in balance with homeowners, board, and realities of management companies business (possible friction)
• Problem-solver
• Multi-task oriented

GOVERNING DOCUMENTS

As is the case with all governing bodies, there are legal documents that regulate how an HOA works and all the players’ rights and responsibilities. Documents may vary depending on the type of Association (condo, townhome, etc.)

• All documents that regulate the community life
• State law
• Declaration of Covenants or Master Deed
• Conditions and Restrictions
• Bylaws
• Rules and Regulations
• Plats of Survey and Easement Agreements (may be separate, often included in the declaration)

Basic Condominium/Townhome Legal Documents

• State Enabling Statute-permits the creation of condominium/townhome form of ownership and prescribes the basis of determining ownership interest, rights and obligations of the owners, duties, and powers of the Association, and the process of dissolution of the condominium
• Subdivision of Condominium/Townhome Plat-describes the location and nature of the common elements and the units
• Condominium Declaration or Master Deed-defines the units, common and limited common elements, and is the collection of covenants imposed on the property to provide for:
• The obligation of each owner to share in funding the cost of association operations
• The power, authority, and responsibility of the Association in its operations and in making and enforcing rules
• Individual Unit Deeds-comprises the individual unit deed
• Articles of Incorporation-creates, the Association as a corporation under state corporate statute and, defines its membership, and sets forth the process for creating the Board of directors, voting procedures, etc.
• Bylaws-implements, in specific detail, the provisions of the Declaration and the Articles of Incorporation regarding the association operations, including delineation of the meeting process, election procedures, powers and duties, board meetings, committees, insurance requirements, rulemaking, and enforcement process
• Rules and Regulations-sets forth the operational powers or provisions and the use restrictions adopted by the Association

Legal Docs for Homeowner Associations and the Hierarchy of such Documents

• Subdivision Plat – describes the location and nature of the common property and the individual lots
• Property Deeds – comprise the individual lot deeds and the deeds to common property, which give a legal description of the property
• The Declaration of Covenants, Conditions, and Restrictions-the declaration of CC&R’s is the collection of covenants imposed on all property within the development and provides:
• For automatic association membership of all owners and the basis for voting rights
• The obligation of each owner to share in funding the cost of association operations
• Certain restrictions (architectural control and other rules) on the use of the property and the Association’s enforcement powers
• Sets forth the power and authority of the Association to own and maintain the common property and to make and enforce rules
• Articles of Incorporation-creates the Association as a legal entity under state corporate statute; defines the board powers and responsibilities of the Association and its membership; and sets forth the process for creating the Board of directors, voting system, etc.
• Bylaws-implements, in specific detail, the provisions of the CC&R’s and the Articles of Incorporation regarding the association operations, including delineation of the meeting process, election procedures, powers and duties, board meetings, committees, insurance requirements, rulemaking, and enforcement process
• Rules and Regulations-sets forth the operational powers or provisions and the use restrictions adopted by the Association

Applicable Civil Rights Laws

• Prohibition against racial discrimination as stated by the Civil Rights Act of 1866
• Equal Credit Opportunity
• Fair Housing Amendments Acts, 1988, applies to the sale of a residence
• Does not prohibit discrimination by owners, if selling or renting as long as they own three or fewer homes
• Board is prohibited from discrimination in exercising its 1st right of refusal
• Association must abide by laws prohibiting discrimination against families with kids
• Persons with disabilities (at their own expense) must be allowed to make accommodations per the Americans with Disabilities Act, 1993

ACCOUNTING BASICS

An HOA needs to decide how it will manage its accounting. There are two methods: the cash method and the accrual method.

• Cash Method of Account-income and expenses are only recorded when cash changes hands. Financial reports only reflect cash transactions. This is a relatively simple system for simple situations. Because all obligations are not recorded until cash changes hands, this method does not provide an accurate portrayal of the financial condition of the Association at any given time.
• Accrual Method of Accounting-keeps track of all financial activities, including revenue as it is earned (as opposed to when it is received) and expenses as the obligation are incurred (as opposed to when it is paid). This makes possible a more accurate determination of the financial condition of the Association at any point in time. Also, this is a better method for multi-year tracking of capital reserves credits and deficiencies. The primary disadvantage is the greater complexity and technical knowledge needed to maintain the records, understand the reports, etc.

Capital Reserves

The Board should repair and replace major capital facilities, buildings, and equipment of the Association. The ideal method of providing for these future expenses is establishing a capital reserves system and budget to assure that such funds are available when needed.

With the knowledge that the future holds predictable major expenditures for repair and replacement of facilities and equipment, the Association could begin the gradual accumulation of funds through a reserve account to meet all or a portion of that expense when it comes due.

Conclusion

There is a lot that goes into building a strong HOA. In future articles, we are going to unpack the topics we introduced here. Alpine Edge is Breckenridge’s premier property manager and HOA manager. Contact us today about your HOA. We’re here to help!

What Is a Homeowners Association (HOA)?

What is a homeowners association (HOA)? Here is everything you need to know about living in a neighborhood with a homeowners association.

When you hear the term homeowners’ association (HOA), what do you think? It’s often disheartening to hear people associate the term with “rules” and “regulations.”

Yes, those two exist, but what’s the purpose for them? Their purpose is to create a community that can only be described as something out of a Hollywood film.

When you come upon a community with an HOA that takes their job seriously, you’ll find that the lawns are manicured; the entrances boast bright signage and elegant flowerbeds; the community feels safe and secure, whether it’s nestled into the mountains of Colorado or the shorelines of Miami.

It’s a homeowner’s nightmare to sink their life savings into a house that’s bordered by a hoarder who trashes the entire community feel. If you like to take pride in your ownership, then an HOA may be right for you.

Let’s take a closer look at what it is, what it accomplishes for its community, and how it differs from a property management company.

What Is An HOA?

An HOA is an organization that oversees the common interests of a community of people. Homeowners collectively pay a fee to maintain the individual units and/or the entire neighborhood.

An HOA may oversee individual units if it’s an apartment complex or condominium development. Conversely, it may only serve the development and not the individual units. Or, it may oversee the entire neighborhood, including the individual units and the property.

Typically, the residents elect a board of directors that ensures the interests of the community are being served. You can often tell the difference between communities with a great HOA and communities with either a lack-luster HOA or none at all.

Those with a sound HOA will have well-manicured premises. There won’t be any trash lying around. The houses will appear well-kept and maintain a level of uniformity.

When individuals and families move into a community with an HOA, they agree to abide by a governing set of rules or bylaws. They also pay a monthly fee that will achieve that well-manicured look.

Here are some things a good HOA will do for its community:

• Work behind the scenes to prepare and present annual budgets.
• Coordinate special projects.
• Screen and hire the right landscaping/irrigation companies.
• Manage pool maintenance.
• Oversee pest and weed control.
• Coordinate snow and trash removal.
• Offer a 24-hour emergency maintenance service.

HOA vs. Property Management Company

An HOA is, by its very definition, an association for homeowners. A property management company, however, tends to manage a property with rental units.

A property management company will still tend to the overall maintenance of the property. But, they’re typically doing it at the behest of the corporate entity or private individual who owns the complex.

You may see properties out there that have both an HOA and a property management company. In this instance, the property management company serves the HOA.

Property management companies will often step in to help the HOA carry out many of the tasks listed above. They may source the best contractors if the condominium development needs a new roof.

The property management company may also be the “face” of the HOA when it comes to collecting fees and handling emergency situations.

So, while the two can work in tandem, the HOA remains the governing force that outlines the bylaws and ensures compliance. The property management company is, in a way, the enforcer of said bylaws.

Benefits of an HOA

Again, when people hear the phrase HOA, they often associate it with rules and regulations. But, isn’t that how living in a community maintains civility and order?

“Rules” are hardly ever a bad thing. Parents make rules to ensure the safety of their children. HOAs have rules to make community living more amenable.

Here are the benefits of living in a residential community governed by an HOA:

• Your property value should continue to increase because it remained well-maintained throughout the years.
• Your amenities, e.g., pool, gym, dog park, and clubhouse, should also remain in tip-top shape, making them a joy to use year-round.
• There may be social events at the clubhouse that will be enjoyable to attend and get you out and about in your community.
• Property-related issues that fall under the HOAs jurisdiction, i.e., unkempt yards, property line disputes, loud neighbors, or barking dogs, can be mediated by the HOA (which is always far more productive than fighting amongst yourselves).

There can be some serious consequences for those who do not abide by their HOA bylaws. Residents can be fined and even have a lien put on their house if they don’t pay their dues or seriously violate any of the bylaws.

But, if you’re taking pride in the outward appearance of your home, there shouldn’t be a cause for a fine or a fee. The pros of leaving room in your budget for a standard of neighborhood living that’s high will leave you feeling well-settled and cared for.

In summary, a good HOA company will make everyone’s life easier.

Homeowners’ Association (HOA)

And there you have it. We hope this outline of a homeowners’ association (HOA) has settled things for you. When you make the ultimate investment in a house, an HOA can be there by your side to protect your investment.

They can make the difference between driving onto a property with dead shrubbery, faded paint, dilapidated signage, and trash everywhere vs. a property with bright flowers dotting the roadways, power-washed signage, and well-kept homes that stand tall with pride.

If you’re interested in organized living high atop the Colorado Rockies, we invite you to come on over and check out our properties. You’ll quickly see what life in a well-managed HOA looks like.

Here at Alpine Edge, we offer vacation rental homes that are superbly managed, offering the ultimate Breckenridge vacation experience. Each rental home has its own unique charm that lends to the town’s unique voice.

We make it our mission to make sure you’ll never want to leave. When you’re ready to book, be sure to take advantage of any existing promotions and discounts before you book. We look forward to serving you!

6 Tips for Choosing a Property Management Service in Breckenridge

Finding the right property management company requires knowing your options. Here are tips on choosing a property management service in Breckenridge.

By investing in real estate, you’re following the advice of 90% of millionaires who say that real estate is the best investment you can make. However, for your property investment to be a success, you need to manage it.

Hiring a property management service can help you streamline and optimize the management of your real estate. The key is to choose the right service to work with.

This guide will help you know what to look for, so you select the right management company for your needs.

1. Understand the Services Offered

Each property management company offers a unique suite of services. It helps to create lists of your “must-have” and “nice to have” services.

Consider these types of services and whether you want your management service to provide them for your property.

• Annual property inspections
• Maintenance services
• Marketing
• Tenant screening
• Rent collection

2. The Experience of Other Clients

Read references and reviews to find out what the property management experience was like for previous clients. The service you choose should have a reputation for being professional, accountable, and responsive.

They should have a reputation for proactive action and not reactive. This means they have disaster and contingency plans in place. There are set and clear standards that the property management firm adheres to.

3. Fees and Costs

As with any service, it needs to make financial sense to employ it. Fees and costs shouldn’t be your sole deciding factor, though. Look for a service that has a clear fee structure.

The service should also provide you with regular accounting statements, so you understand your rental property’s account status.

4. Technology

Modern property management firms use software to automate many tasks. Look for a firm that embraces technology to streamline processes and make renting easier for potential tenants.

There should be a portal for tenants to log into for rental payments and maintenance requests. There should also be a portal for you as the owner to manage reporting and your disbursements.

5. Performance Track Record

Ask potential firms what their performance track record is. This ensures you trust your property in Breckenridge to a capable firm. Some property managers are more experienced with managing homes for families while others are more adept at managing commercial real estate.

Look for these statistics to understand a service’s performance track record.

• Vacancy rates
• Occupancy rates
• Average tenancy length
• Number of properties under management
• Number of owners represented

6. Qualifications

You’ll want to confirm that any property service you work with is a legitimate company. You can do this by confirming the licensing of a particular service. You can do this online.

Verify that the company is licensed to work where your property is located. You’ll also want to confirm that the license is in good standing.

Find a Property Management Service

By following these six tips, you’ll be prepared to find the best property management service. Pay attention to what a service has to offer you and how that fulfills your needs.

Research what other clients have to say about the quality of a service and a firm’s performance track record. This will give you a good indication of how that particular service will perform for you.

Contact our skilled team of property managers and entrust your property to a qualified team.