Andy Sirkin | 12-06-2013
Must an HOA have a professional manager?
Some governing documents require professional management, or state that an owner vote (or even the approval of mortgage lenders) is required to discontinue professional management. Absent these provisions, professional management is not required, but it is generally advisable, particularly for larger associations. The law allows any association to retain a professional manager.
What services do professional managers typically provide?
Professional managers offer a wide variety of services to homeowners associations including accounting, budgeting, record keeping, assessment collection, bill payment, meeting coordination, and common area maintenance. Associations choose from among the services available, and enter into a contract with the manager describing the scope of work. The management contract should also include the fee, the duration of arrangement, and the circumstances under which the arrangement can be terminated early. Some governing documents limit the duration of management agreements, or require specific early termination provisions. A sample management agreement is provided in The Condominium Bluebook.
While the law allows almost any association function to be delegated to a professional manager, most governing documents list certain association functions that cannot be delegated. Non-delegable functions typically include borrowing money, levying assessments, making capital expenditures in excess of budgeted amounts, and imposing discipline for violation of the governing documents. Regardless of what functions are delegated, and regardless of the content of the management agreement, the board retains the duty to supervise the manager and the authority to override any decision.
How is a professional manager selected?
The board has the authority to select the manager and determine content of the management contract, but it may appoint a committee to make recommendations. Managers of homeowners associations are not required to be licensed but must provide an extensive disclosures to the association.
What restrictions apply to a manager’s handling of HOA funds?
The law imposes stringent requirements on managers that handle homeowners association funds to prevent commingling and fraud.Back to News | View Related Link
Association OnlineTM is a subsidiary of ProHOAm, Inc.
®Association Online 2020 All Rights Reserved Site by Consult PR