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3 Common Questions About an HOA Board of Directors

Every homeowners’ association (HOA) has a Board of Directors that’s tasked with managing, improving, and protecting its community. If you’re part of such a community, knowing more about your HOA Board of Directors can help you stay updated on all matters concerning your residential area.

To give you a better understanding of the HOA Board of Directors, here are the 3 most commonly asked questions about it.

1. What are the different roles of the Board of Directors’ members?

An HOA Board of Directors usually has four to five different offices, which can take the form of the following:

  • The President is the Board’s executive officer. They preside over decision-making proceedings and are responsible for ensuring the proper execution of solutions to all issues affecting the community. They also co-sign checks and sign contracts.
  • The Vice-President performs the President’s duties should said President be absent, in addition to other responsibilities.
  • The Secretary regularly updates information about members, notifies members about meetings, takes meeting minutes, signs contracts on the HOA’s behalf, and records votes.
  • The Treasurer signs checks, receives and deposits money, maintains financial records, prepares the yearly budget, and schedules the yearly examination of accounting books.
  • The Member at Large is the HOA board’s fifth voting member, and performs any assigned duties.

2. What are the HOA Board’s other duties?

The HOA Board may also:

  • Determine the annual HOA fees
  • Employ an independent contractor or manager
  • Protect homeowners by adopting and modifying rules and regulations concerning HOA members’ personal conduct and the use of shared spaces

3. Why should an HOA’s Board of Directors be homeowners in said HOA?

It’s in everyone’s best interests that an HOA’s Board of Directors is composed of people who live in a community governed by that HOA. Homeowners have a firsthand experience of the many issues affecting their community, like HOA fees, the proper maintenance of shared spaces, and more. As such, homeowners have a vested interest in finding the best solutions to problems impacting their community.

Because of their knowledge, experience, and personal stake in the betterment of their community, homeowners make ideal candidates for an HOA’s Board membership. It’s, for this reason, it’s extremely rare for an HOA’s Board of Directors to have members who aren’t part of the HOA.

Do you have any other questions about the HOA Board of Directors or HOAs in general? If so, please feel free to contact us through our corporate website, or give us a call at 951-270-3700. We’d be glad to hear from you!

3 Key Benefits of Hiring an HOA Property Management Company

Homeowners associations or HOAs are generally established for two primary reasons: to take care of the community that it serves and to ensure that community standards are followed to maintain property value. These two general reasons may look simple enough on the outset but looking deeper, each of these entail a series of tasks and processes, often tedious and complicated. How can an HOA management company help?

Whether the HOA is a newly established one or it’s been around for awhile but basically run by the Board of Directors and board members, hiring the services of an HOA management company will take on most of the burden. Here are a few key benefits to having an HOA management company help with operations:

1. Fulfill HOA duties and functions on a budget

One of the key takeaways to having an HOA manager take care of the association is that they can fix your finances. This means, once they come onboard, they can immediately check your books to first see if these are balanced; and secondly, to see which areas of operations you’re bleeding money and which ones need immediate attention (and funding). They can help you come up with a workable budget for HOA operations.

2. Serve as an all-around go-to person

If a homeowner has a complaint or concern, or needs something fixed, they can go to the HOA manager to discuss their issue. A key benefit to having an HOA manager onboard is that they have the time to be present for the community. Unlike with the HOA Board’s directors and members who have day-to-day duties and responsibilities who aren’t always available, an HOA manager can be there with one phone call.

The same goes for emergency situations, whether repairs, medical emergencies or natural disasters, a representative from your HOA management company will be there to assist or take charge in some instances.

3. Enforce rules and regulations

One of the biggest challenges for HOAs is getting every homeowner within their jurisdiction to follow the rules. There will always be one or two who will try to bend the rules, and often, they can be a cause for disputes and disagreements between neighbors. As a third-party overseer, the HOA manager can enforce rules and regulations without worrying about stepping on someone’s toes (or ego) or hurting the feelings of a neighbor. They are the neutral player that every HOA needs to ensure that regulations are strictly followed.

In a word, an HOA manager can make your HOA more effective.

5 Ways an HOA Can Effectively Save Money

Homeowners associations or HOAs collect fees from its members to have funds for its operations. But regardless of the size of the HOA and the total amount of fees collected each month, there will be occasions when the association will fall short on funds, especially funds for unforeseen and unplanned expenses. So how can your HOA save money? So Cal Enterprises shares some tips:

Conserve energy

The bulk of expenses for HOAs goes to utility bills, which are primarily electricity and water bills. Here are ways to conserve energy:

1. Turn off and unplug equipment

Even if you’re not using a piece of equipment, it is still using up power by simply being plugged in. Make a checklist of all the equipment in common areas and evaluate their usage. You can create a schedule for usage of specific equipment, too, so they all don’t need to be simultaneously plugged in.

2. Discuss energy conservation programs and options with your provider

If you haven’t yet asked your energy provider about their conservation programs and options, now’s the time to do. The government usually gives incentives or credits to energy providers that help conserve energy, which means there’s a good chance that your provider has one or several. If they don’t, find out if you can switch providers. If you can, shop around for one in your area that has such credits or incentives.

Conserve water

Another huge expense for HOAs is its water bill. Here, you have several ways to conserve water:

3. Schedule your sprinkler system

There is a common misconception about sprinklers: that if you set them to automatically turn on and water the lawn for short periods at small intervals several times per week, you’ll be saving more. Truth is, the more often you turn on the sprinkler system, the more water it uses up even if you did set it to work only for short periods at a time. The more cost-efficient system would be to turn it on fewer times fewer week but working for longer intervals.

4. Utilize a rain gauge

If you haven’t installed a rain gauge, it’s high time that you do. Rain gauges save water that you can be used for the HOA’s irrigation system. Utilizing these water conservation gadgets can significantly cut your water usage.

Re-evaluate service contracts

5. Update your contract with vendors

If your HOA has been around for a good number of years, you may have forged a good working relationship with select vendors. Check your current contract with each one and discuss new terms you can both agree on that can help you save on professional fees and supply costs.

These money saving tips can help you get started on your campaign to lower your HOA expenses for a more efficient HOA management and operations.

HOA Management and Condo Management

For multi-family housing, which is usually an apartment building or a condominium, may be regulated by a homeowner’s association (HOA) and managed by a property manager or a building administrator. The HOA itself may be managed by an HOA management company. The setup varies; and it is usually upon the discretion of the unit owners, real estate developer, and the HOA.

Assuming the condo community is managed by an HOA, which in turn is managed by an HOA management company, the most common question that unit owners and tenants ask is if an HOA management company is necessary, thinking that hiring such services means higher association dues. The answer is “yes,” and here’s why: the association’s finances are better managed.

HOA finances

Budgeting

One of the biggest challenges that HOAs deal with on a regular basis has to do with finances; specifically, budgeting and reserves. How do they ensure that there is always enough for emergencies, from unforeseen equipment breakdowns to natural disasters, for instance? How can they make sure, too, that they have enough money for daily operations? From landscape to building maintenance, and other services needed to ensure the safety, comfort, and security of the community

States generally have specific regulations regarding HOA or association budgets. For instance, the HOA may be required by local regulations to update their budgets annually, taking into account financial challenges experienced the previous year.

Fundraising

For emergencies, HOAs should have a reserve fund. Unforeseen circumstances that may require funding include emergency equipment repairs or replacement, unscheduled facility and utility upgrades, and disasters and accidents (such as flooding, and fires).

Usually, association dues only cover operational costs and money that goes into the reserve fund is usually “charged” as an additional expense or fee. This additional burden isn’t usually welcomed “with open arms,” as one could imagine. The better alternative is to hold a fundraiser.

The challenge here isn’t the type of fundraising to hold but rather, the amount of money that the reserve must have at all times. Financial forecasting is needed here.

Professional assistance may be called for

Understand that homeowners/condo associations are run by volunteer residents, which means they have a life outside of the association. They have day jobs, families, and other responsibilities to take care of. What this translates to is basically overlooking and neglecting association duties without meaning to. And the HOA aspect that usually takes the brunt is finances.

An HOA management company usually has an accounting/financial expert that oversees the HOA’s finances. In general, HOA management companies ensure that the association is fully functional, serving the interest of both the community and its members.

A Primer on Homeowners Association Rules and Regulations

Homeowners associations or HOAs are there to serve the homeowners and the community. Unfortunately, they have gotten a bad reputation because of misconceptions and misinformation. And the most common (and reputation damaging) misconceptions about HOAs is that they are too restrictive; too strict to the point of being “dictatorial.”

But if one were to shift their perspective and truly see HOAs from the point of view of an entity tasked to take care of the community and its homeowners, you’d probably gain a better understanding of why rules and regulations are imposed in the first place.

Here are a few things to know about :

The Board of Directors has a say in the rules and regulations

HOA rules and regulations are generally first drafted, decided on, finalized, and implemented by the property developer. When the HOA is turned over to the homeowners, there will be an election for the Board of Directors and members of the Board will then be the ones to implement these rules. They may also vote to add, amend, or remove certain stipulations. Board members are homeowners within the same community as well, which means they understand the sentiments and needs of homeowners.

The HOA preserves the community

Within a community, specific standards are expected to preserve the community’s good reputation. There are guidelines for public behavior, parties, street parking, use of common areas and facilities, structural design, and such. All these are meant to maintain a certain standard of living meant to preserve the community’s reputation and way of life.

HOAs may affect property value

In relation to the above, how well or how poorly the HOA preserves the community may directly affect property value in the area it covers. If your HOA’s rules and regulations are well-implemented, maintaining community standards will be easy and this benefits your property as well. While it is not a “sure-fire” way to protect or enhance property values, they certainly won’t negatively impact others’ first impression of the homes within your community if they are followed. And this could be good if you plan to sell your home in the future.

Adversely, if the HOA doesn’t do its job, the community’s overall value may decrease, which could directly impact your home’s value.

Do you have more questions regarding homeowners associations? Please feel free to send your questions online or call So Cal Property Enterprises, Inc. at 951-270-3700; we’d be glad to hear from you.