7 Differences Between HOAs and Property Management Companies

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7 Differences Between HOAs and Property Management Companies 1

Your rental property could have both an HOA and a property management company. The two entities are very different things. But without a good understanding of the role of an HOA versus a property manager, it’s easy to get confused about what they do or how they work together. 

Using a property manager to make the most of your rental property is an excellent way to go. When your property is in an area also governed by an HOA, it’s critical to make sure your property manager understands the HOA rules and how to comply. 

A homeowners association can’t take the place of your property manager. Let’s take a look at the seven key differences between a homeowners association (HOA) and a property manager. 

1. HOAs are Community Rule Makers

What is an HOA? A homeowners association helps enforce community rules for a neighborhood or a group of homes. These rules can include a variety of things, from aesthetics to how to behave as part of the community. 

When purchasing a rental property in a community with an HOA, be sure you check into the requirements. Are there rules about:

  • The color of your property?
  • Landscaping?
  • Decorations?
  • Quiet hours?
  • Having pets? 
  • Using common areas? 

Make sure you and your property manager understand all of the rules to stay in good standing with the HOA. Your property manager is your “in the field” representative to make sure your property stays within the rules. Your property management company must also work with your tenants to make sure they live in your property within the provisions of the HOA. 

2. HOAs are Rule Enforcers

Depending on your type of HOA, they can enforce rules that your property manager can’t enforce. 

If your property or your tenants fail to comply with the HOA rules, some HOAs can legally apply a lien on your property and assess fines to you as the property owner. While your tenants are acting in violation, as the property owner, you’re responsible for making sure they follow the rules. 

Use your property manager to help keep your tenants within the rules. While your property manager can’t legally assign a lien to your property, they can access fees to your tenants for rule violations. 

Make sure your lease agreements include penalties for violating HOA rules. This gives your property manager flexibility to enforce rules that support the HOA guidelines.

3. Property Managers Don’t Manage Common Spaces

Depending on your type of property, your property manager won’t manage common spaces within the neighborhood. Parks, swimming pools, and walking trails fall under the responsibility of your property’s HOA. 

Your property manager focuses on your property. You need them to help you provide a habitable home within Virginia’s landlord-tenant laws while also following your HOA rules. 

4. HOAs Don’t Manage Your Property

Your property’s HOA will provide a list of rules for all properties to following within the neighborhood. However, they won’t manage your property for you. Some HOA boards might hire an HOA management company to enforce the rules. However, HOA management is not the same property management for landlords. 

Find a trusted property management partner who understands your financial goals and works for you—in compliance with your HOA.

Your property manager should:

  • Find and screen quality tenants
  • Provide maintenance services
  • Regularly inspect your property
  • Collect the rent and make sure you get paid

When you have a property manager acting on your behalf, you won’t need to worry about your home or tenants following the HOA rules. 

5. Property Managers Care About Owner Interests

We mentioned your financial goals. Your property manager works to make sure everything about your property supports your interests as the landlord. 

Your HOA’s primary concern is for your property and anyone who lives there to “fit in” to the neighborhood. In many cases, HOA boards are rental friendly as long as your property follows the rules, and your tenants don’t disturb the neighborhood. 

When choosing your property management company, make sure they understand how to screen tenants who will help your property remain a valuable asset to the HOA community. With regular property inspections, your property manager will keep your property’s condition and appearance in-line with your HOA guidelines.

You don’t want to be “that” property with the tenants that suddenly painted your property a color that isn’t HOA-approved. Your property manager’s job is to make sure anything that happens with your property supports your goals and follows the HOA rules. 

6. Property Managers Follow HOA Rules

If your HOA requires annual fees, your property manager makes sure those fees or dues roll into the monthly rent for your property. It’s your property manager’s job to make sure tenants understand and follow the HOA and lease rules. 

However, your property manager can’t do anything with your property or your tenants that violates landlord-tenant laws. Make sure you choose a property manager who will maintain a good relationship with your HOA and your tenants. 

7. Property Managers Are Your Rental Property Experts

Your property manager sets you up for success. Starting with rental property analysis, your property manager sets the best rental price to attract the right tenants for your rental home. With quality tenants and the best local property manager in place, your HOA will love having you as a rental property owner in the community. 

Summary of Key Differences between an HOA and a Property Management Company

Here are the key facts outlining the differences between an HOA and a property management company:
  • Function: An HOA (Homeowners Association) is a governing body that oversees the rules, regulations, and maintenance of a community, while a property management company is a third-party service provider hired to manage individual properties or multiple units within a community.
  • Responsibilities: An HOA focuses on maintaining common areas, creating and enforcing community rules, and managing the community’s budget. A property management company handles tasks such as tenant screening, rent collection, property maintenance, and addressing tenant issues.
  • Decision-making authority: The HOA board, consisting of community members, has decision-making authority and sets the rules and guidelines for the community. A property management company follows the direction of the property owner or the HOA board but doesn’t have the same level of authority in decision-making.
  • Membership: HOA membership is mandatory for homeowners within the community, and they are required to pay dues to fund the association’s activities. Property management companies are hired by property owners or HOA boards and are not membership-based organizations.
  • Conflict resolution: HOAs handle disputes among homeowners and enforce community rules, while property management companies mediate between property owners and tenants, resolving conflicts related to rent, maintenance, and lease agreements.
  • Legal matters: An HOA can create and enforce legally binding rules and regulations for the community, while a property management company must comply with local, state, and federal laws when managing properties and dealing with tenants.
  • Fees: Homeowners pay fees to the HOA to cover the cost of maintaining common areas and other community expenses. Property management companies charge property owners a fee, usually a percentage of the rent, for their services.

Property Managers and Your Homeowners Association Work Together

The best property managers know how to work with a homeowners association to make sure you get the most from your rental property. Nomadic Real Estate is the property management company you need to navigate your property, the HOA, and your tenants for success. 

Contact us for a free property management quote today! 

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Owner Ledger Description Column
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Owner Ledger Account Balance Column
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