How Does the Governance of a Homeowners Association Work?
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 well-being 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.
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.