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Moving into a homeowners association can come with a new set of terms, processes, and responsibilities to understand. One of the most common questions new residents have is: what does the Board do, and what does the management company do?
Both play an important role in serving your community, but they do not have the same responsibilities. In simple terms, the Board makes decisions for the Association, while the management company helps carry out those decisions and manage daily operations. Understanding the difference can help you know how your community operates and why certain requests may require board review.
What Is the Homeowners Association?
Your homeowners association, or HOA, is a nonprofit corporation created to serve and protect the community. Property owners are members of the Association and collectively elect a Board of Directors to govern on their behalf.
The Association’s responsibilities may include:
- Maintaining common areas
- Protecting property values
- Enforcing community standards
- Managing association finances
- Providing community services and amenities
- Preserving quality of life in the neighborhood
The Association is governed by documents that may include its Declaration or Covenants, Bylaws, Articles of Incorporation, Rules and Regulations, and Architectural Guidelines. These documents establish how the Association operates and what standards apply within the community.
What Does the Board of Directors Do?
The Board of Directors is elected by property owners to make decisions on behalf of the Association. It serves as the community’s governing body by setting direction, approving spending, and overseeing how the Association’s governing documents and policies are applied.
1. Sets Community Policies
The Board adopts rules, interprets the governing documents, and makes policy decisions for the community.
2. Approves the Budget
The Board reviews and approves the Association’s annual budget, determines assessment levels, and plans for future reserve funding.
3. Oversees Association Finances
The Board reviews financial reports, oversees reserve funds, and makes decisions about how association funds are spent.
4. Makes Common Area and Vendor Decisions
The Board determines what maintenance is needed, which vendors to hire, what capital improvements to complete, and how community projects should be prioritized.
5. Oversees Compliance
The Board establishes the framework for enforcing the governing documents and reviews the policies used during the compliance process.
6. Manages Risk and Insurance
The Board reviews insurance coverage, works to protect association assets, and makes decisions regarding insurance claims when needed.
7. Upholds Architectural Standards
The Board may approve or deny exterior modification requests, establish design standards, and help maintain visual consistency throughout the community. A separate architectural committee may handle some of these responsibilities when one has been established.
8. Conducts Association Business
The Board holds meetings, votes on association matters, fills Board vacancies, and makes decisions on behalf of the Association.
Simply put: The Board makes the decisions.
What Does the Management Company Do?
The management company serves as the Board’s professional advisor and operational partner. It does not govern the Association or independently create community policy. Instead, it supports the Board, carries out approved decisions, and manages many of the Association’s day-to-day responsibilities.
1. Provides Administrative Support
Management may attend board meetings, prepare management reports, coordinate follow-up actions, and provide professional guidance to the Board.
2. Supports Financial Management
Management may prepare draft budgets, maintain accounting records, process owner payments, and produce monthly financial reports for board review.
3. Coordinates Vendors and Maintenance
Management may request contractor proposals, monitor contracted services, process work orders, and oversee maintenance projects based on the Board’s direction.
4. Conducts Compliance Inspections
Management may inspect the community, document possible violations, send notices according to board-approved policies, and track compliance activity. Management administers this process within the framework established by the Board and the governing documents.
5. Supports Architectural Reviews
Management may receive modification applications, maintain application records, communicate with homeowners, and coordinate review by the Board or architectural review committee.
6. Assists Residents
Management handles homeowner questions, manages amenity access systems, assists with resale requests, and provides after-hours emergency response.
Simply put: Management carries out the Board’s decisions and handles daily operations.
How Do the Board and Management Company Work Together?
The Board and management company operate as a strategic partnership. The Board sets the community’s direction, makes decisions, establishes policies, and approves spending. The management company provides professional expertise, recommends solutions, coordinates services, implements approved decisions, and reports results to the Board.
This partnership allows volunteer board members to govern the Association without personally handling every administrative or operational task.
Example: Reconsidering a Landscape Contract
If the Association is considering a change to its landscape contract, the Board determines whether the current vendor is meeting the community’s standards. It reviews proposals and approves the budget and vendor selection.
Management supports that process by submitting a request for proposal, obtaining vendor proposals, coordinating communication, scheduling onsite meetings, and processing the approved contract and invoices.
In this example, management gathers information and coordinates the process, but the Board makes the final decision.
What Goals Do the Board and Management Company Share?
Although their responsibilities are different, the Board and management company share the goal of making the community a wonderful place to call home.
Their shared goals include:
- Protecting property values. Maintaining standards that help keep the community desirable and its homes marketable.
- Maintaining community assets. Caring for common areas, amenities, and infrastructure.
- Preserving financial stability. Managing Association funds responsibly.
- Providing excellent homeowner service. Responding to residents with professionalism and care.
- Enhancing quality of life. Supporting a community where residents can feel proud, safe, and connected.
By working together, the Board and management company help the Association remain well-maintained, financially sound, and desirable for its residents.
FAQ: HOA Board vs. Management Company
Can the management company change my community’s rules?
No. Rules and policies must be approved by the Board. The management company can recommend changes, but it cannot independently adopt or alter the Association’s governing policies.
Can the management company approve a homeowner request?
Only when that authority has been specifically granted through the governing documents or a board policy. Most architectural and policy decisions remain with the Board or a designated committee.
Who decides how my assessment payments are spent?
The Board approves the Association’s budget and major expenditures. Management prepares financial reports and draft budgets, but spending authority rests with the Board.
Who sends compliance or violation notices?
Management may conduct inspections, document concerns, and send notices according to the Association’s governing documents and board-approved policies. The Board establishes the enforcement framework that management follows.
Who hires the Association’s vendors?
Management helps obtain proposals and coordinate vendor services. The Board generally approves significant contracts and expenditures before the work begins.
Who reviews exterior modification requests?
Management may receive the application, maintain its records, and coordinate communication. The Board or a designated architectural review committee generally makes the decision, unless management has been specifically authorized to approve the request.
Does the management company work for individual homeowners?
The source document describes the management company as the Board’s professional advisor and operational partner. It assists residents with questions and services, but it carries out association operations and board-approved decisions rather than governing the community itself.
Why might management need to send my request to the Board?
Some requests involve decisions or authority that remain with the Board or a designated committee. Management may gather the necessary information, maintain the records, and coordinate communication while the authorized group reviews the request.
Working Together for Your Community
Your board and management company have different responsibilities, but they are working toward the same goal: supporting a well-maintained, financially stable, and enjoyable community. Knowing which role each one plays can make association processes feel clearer and help you better understand how community decisions are made.
As a resident, staying informed and engaged is one of the best ways to contribute to your community. Thank you for being an active part of it!