ABCs of HOA – Association Management
We’ve compiled a list of some Frequently Asked Questions below regarding Association Management.
Q: What is a “management company,” what do they do, and how do I reach them?
A: The Management Group, Inc. (“TMG”) is contracted by the Board of Directors to provide such services as: Collection of assessments, supervision of subcontractors, obtaining bids for subcontracted services, providing financial statements and collection reports, as well as a general clearing house for problem solving, communications with homeowners and the Board of Directors and to serve in an advisor capacity. TMG reports directly to the Board and all decisions are made by a majority vote of the Board of Directors. TMG may be reached online through the Management Office page on this website or by phone from the numbers listed on the Contact Us page on this site.
Q: What is a homeowner’s association?
A: A homeowner’s association is a non-profit corporation registered with the State and managed by a duly elected Board of Directors. Its purpose is to maintain all common areas and to govern the community in accordance with the provision of the legal documents: CC&Rs, Bylaws, and Articles of Incorporation. The governing legal documents for the association may be viewed online within the Resource Center page of this site. The corporation is financially supported by all members of the homeowner’s association. Membership is both automatic and mandatory.
Q: What are the CC&Rs?
A: The Covenants, Conditions and Restrictions (CC&Rs) are the governing legal documents that set up the guidelines for the operation of the planned community as a non-profit corporation. The CC&Rs were recorded by the County recorder’s office and are included in the title to your property. Failure to abide by the CC&Rs may result in a fine to a homeowner by the Association. The governing legal documents for the association may be viewed online within the Resource Center page of this site.
Q: What are the Bylaws?
A: The Bylaws are the guidelines for the operation of the non-profit corporation. The Bylaws define the duties of the various offices of the Board of Directors, the terms of the Directors, the membership’s voting rights, required meetings and notices of meetings, and the principal office of the Association, as well as other specific items that are necessary to run the Association as a business. The Bylaws for the association may be viewed online within the Resource Center page of this site.
Q: What is the Board of Directors?
A: The Homeowner’s Association is a corporation and is, therefore, a governing body that is required to oversee its business. The Board of Directors is elected by the owners within the community annually at the Board of Directors. The By-Laws of the community outline the process for elections. The limitations and restrictions of the powers of the Board of Directors is outlined in the Association governing documents found within the Resource Center page of this site.
Q: Are there any other rules?
A: The Board of Directors is given the authority by the governing documents to adopt Use Guidelines (“Rules and Regulations”) and resolutions for the community that set a policy or procedure. Rules are established to provide direction to the homeowners for common courtesies with regard to collections, fines, architectural guidelines, leasing, display of a flag, leasing, etc. In addition, your Association does have additional Architectural Guidelines with procedures for submitting requests to make exterior changes to your home. Such changes may include patio covers, decks, landscaping, exterior paint and additions. These rules and guidelines are set up to maintain the aesthetic value and integrity of the community on behalf of all owners and hopefully protect the market value of your investment as well. Violations of these rules may result in action by the Board of Directors and a fine. In addition, if you proceed with an exterior improvement or change without written approval of the Board of Directors or the Architectural Committee, as applicable, you will be required to remove or correct the alteration and a punitive fine may be imposed even after your property is brought into compliance.
Q: If I am having a problem with a neighbor for a violation of the Policies and Guidelines, what can I do?
A: If residents cannot resolve a situation between themselves, then turn to your Association. Should you have a situation that does not appear to be resolved through neighborly means, and you are willing to actively participate in the enforcement provided by the Policies and Guidelines, you may complete a Covenant Violation form online. The Violation form may be found within the Management Office page on this site. If the situation is deemed in violation of the Policies and Guidelines, the Board of Directors will institute the enforcement policy. Your continued assistance may be required.
Q: Are Board Meetings open to all residents? If so, where and when are they held?
A: Yes. All Board Meetings are legally open to all members; however, Board Meetings are for Board business and are not generally open for feedback from the members. Most Board Meetings have a Homeowner Forum period on the agenda and this would be the time for homeowner input. Check with your specific documents on notice requirements.
Q: If I want to serve on a committee, how do I find out what committees are active and how I can get involved?
A: The Contact Us page of this website will inform you of the status of current committees organized. If you are interested, please go to the Contact Us section of this website and email your manager or complete the Volunteer. Committees are generally appointed by the Board of Directors and serve at the Board’s discretion.
Q: What is my assessment?
A: The assessment is the periodic amount due from each homeowner to cover the operating expenses of the common area and provide for reserve funds for replacement of common facilities in future years.
Q: How is the amount of my assessment determined?
A: The Department of Real Estate typically requires an initial budget from the developer for each community that a developer proposes to build. This budget is set upon specific guidelines for utilities, landscaping, administration, etc. Reserve funds are monies set aside for future expenses due to the life expectancy of certain items: lighting, street resurfacing, pool equipment, etc. These amounts are then divided by the number of units built in a given phase of the development. Subsequent budgets are developed by the Board of Directors and adjusted periodically to meet anticipated expenses.
Q: Will my assessment go up?
A: There is no concrete answer to this. The Board of Directors may approve an increased budget, increasing your assessment based on estimated expenses for the Association. To obtain specific information on how your assessments increase, refer to your documents. It is, however, not unusual for your assessment to go up anywhere from 2 to 7% on an annual basis, depending on the individual community.
Q: What happens if I don’t pay my assessment?
A: The maintenance and management services incurred by the Association are dependent upon timely receipt of the assessments due from each homeowner. Late payments will result in a late charge and interest being imposed once the due date has passed. In addition, the CC&R’s allows the Association to proceed with a lien on your property which could result in foreclosure proceeding, garnishments, etc. The best thing for any owner to do when facing financial distress is to make contact with the Managing Agent to try and work out a mutually acceptable payment plan.
- Advise and provide administrative, managerial, and operational counsel to the association governing body
- Exhibit professionalism and loyalty to the Board of Directors
- Exercise diligence in performing duties on the Board of Directors behalf.
- Account for financial activities covered by the Management Agreement
- Perform onsite property inspections at direction of the Board
- Solicit and evaluate bids for association services
- Supervise maintenance activities and contractor performance
- Oversee and authorize payment for primary association services
- Know and abide Bylaws, recognizing the State agency that supervises the community associations
The Board of Directors
Depending on the management agreement, some of the following responsibilities can be turned over to a managing company
- 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
- Performs all of the duties of the president in his/her absence
- Typically shares some of the burden of the president regarding appearances, liaison, public hearings, etc.
- Usually assigned liaison responsibility to specific staff or contractors, and to specific committees
- 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 maintains all proxies
- Attests, by signature, to the legitimacy of certain documents
- Works with appropriate staff, contractors, and committees to develop and submit 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