If your rental property is in a community governed by a homeowners association (HOA), you may have found that navigating HOA rules and tenant expectations can be a bit of a balancing act. Using a property manager to protect your investment is a smart way to go, but it’s important to make sure the property manager you use understands the HOA’s rules and responsibilities, and that those expectations are clearly conveyed to your tenants. There are differences between what HOAs are responsible for and what property managers typically handle. Let’s first take a look at what an HOA is and what it does. Then we’ll look at how HOAs and property managers work together.
What is a Homeowner’s Association?
Neighborhoods, subdivisions, and condo communities are made up of lots of housing units that are owned by different owners. In fact, more than 40 million housing units in the US are part of HOA communities, with average of 22 new HOAs forming a day! These homeowners form HOAs to share responsibility for the upkeep of common areas. They may also share expectations for the way members of the HOA will maintain their properties. HOAs develop and enforce the rules (known as covenants, conditions, and restrictions, or CC&Rs for short) that all property owners need to abide by.
While all homeowners may propose on vote on rule, the responsibility for ensuring that rules get kept and responsibilities are met usually rests with an elected HOA board. Typical HOA responsibilities include:
- Keeping up common areas, like playgrounds, swimming pools, and street landscaping
- Setting and collecting HOA dues to pay for upkeep of common areas and security
- Setting budgets for things that HOA dues pay for
- Ensuring that common areas are insured
- Hiring staff and vendors, sometimes through a bidding process
In larger communities, this can add up to a lot of work for the members of an HOA, who are all volunteers with a vested interest in making their community the best it can be. To help oversee all of the work involved, an HOA may hire a property manager or property management company. The property management company may supervise paid staff or contractors, collect HOA dues, communicate with residents on behalf of the HOA, and handle emergencies.
Other Common arrangements Between Property Managers and HOAs
In addition to the arrangement we described above, a property manager may:
- Own and rent out property in a community of owner-occupied homes
- Handle a rental property on behalf of a property owner.
In these situations the property manager has the same responsibilities as any other member of the HOA, with the extra responsibility of ensuring that tenants adhere to the HOA CC&Rs. For example, there may be guidelines about lawn care, how to handle garbage, common area policies, and so forth. It’s important for the property manager to make tenants aware of these guidelines. Including a clause in the lease about adhering to HOA rules is a good way to drive this home.
Now let’s take a look at a few key differences between an HOA and a property manager, and how they work together to protect your investment.
HOAs Make the Rules. Both HOAs and Property Managers Help to Enforce Them.
An HOA both makes and helps enforce community rules for a neighborhood or a group of homes. The goal is to lift the property values of everyone and ensure a high quality of life for members of the community. HOA rules can include a variety of things, from aesthetics to the use of common areas. Setting the guest policy of the swimming pool, for example, would fall under the HOA’s responsibility, while enforcing the policy might fall to the property manager.
When purchasing a rental property in a community with an HOA, you may want to check into the maintenance requirements. HOAs vary in terms of what they prescribe and what they restrict. HOA rules typically regulate:
- The color of your property
- Your front lawn and landscaping immediately around your house
- When quiet hours are observed
- How the common areas are to be use
- Whether or not pets are allowed and what kind
Even decorations are regulated by HOA CC&Rs. Property managers working within HOAs will understand all of the rules to ensure owners stay in good standing, and will make sure tenants abide by the provisions of the homeowners’ rules.
Depending on your type of HOA, the HOA may be able to enforce rules that your property manager can’t. If your property or your tenants fall afoul of the HOA rules, some HOAs can legally apply a lien on your property.
Property managers, on the other hand, can charge fees to your tenants for rule violations without having to get the HOA involved. Make sure your lease agreements include clear penalties for violating HOA rules. This gives the property manager flexibility to uphold the HOA guidelines that make everyone happy and protect your investment.
Property Managers Don’t Manage Common Spaces
Depending on your type of property, your property manager won’t manage common spaces within the community. Parks, playgrounds, swimming pools, walking trails and street landscaping fall under the responsibility of your property’s HOA.
As the title implies, your property manager’s focus is your property. Property managers help owners provide a habitable home within Florida’s landlord-tenant laws while also sticking to HOA rules. By the same token, your property manager can’t do anything with your property or your tenants that violates state and local landlord-tenant laws or federal laws (important in the screening process). Nor can property managers supersede the HOA on issues like maintenance of common areas or the hiring of contractors.
HOAs Don’t Manage Your Property
Your HOA will provide a list of CC&Rs for all properties to follow within the community or neighborhood. However, they won’t manage your property for you. Some HOA boards might hire an HOA management company to enforce the rules, but this isn’t the same as property management for property owners.
A trusted property management partner will:
- Find and screen quality tenants
- Collect rent
- Communicate with tenants
- Provide maintenance services
With a good property manager acting on their behalf, owners can rest assured that their home is in good standing with the HOA, and tenants are paying rent on time. Many HOA boards are rental-friendly, as long as your property follows the rules and your tenants adhere to the HOA guidelines. With quality tenants and efficient property management in place, your HOA will love having you as a rental property owner in the community.
Property Managers and HOAs Work Together
Experienced property managers know how to work with the HOA to make sure your rental property is in good hands and any issues that arise are resolved quickly and efficiently. Navigating HOA rules and tenants expectations can be tricky. When an HOA board doesn’t effectively communicate new rules or violations to their community, for example, a resident can feel targeted for no reason when receiving a violation. Property managers can help by communicating changes to tenants and keeping an open line of communication.
Set yourself up for success by choosing a property management company that has experience working with HOAs and tenants. Contact KNR for a free property management quote today.