Difference Between HOA and Property Management (Defined)

June 06, 2024•5 min read

Ever bought a house in a beautiful community with manicured lawns, sparkling pools, and a strong sense of belonging? If so, you've likely encountered the terms HOA and property management.

These two entities often need clarification, but homeowners must understand their key differences. Homeowners' associations (HOAs) and property management companies are distinct entities that play crucial roles in managing housing communities.

While both involve overseeing residential properties, they have different responsibilities, tasks, and expertise. Learn about the key differences between HOA and property management, helping you make informed decisions about managing your community.

What is HOA Management?

HOA management refers to managing a community governed by a homeowners association. The primary responsibility of an HOA management company is to ensure that the community remains well-maintained, safe, and compliant with the community's rules and regulations.

HOA management companies typically handle tasks such as:

Enforcing Community Rules: HOA management companies ensure that all homeowners adhere to the community's rules and regulations, outlined in the community's bylaws and CC&Rs (Covenants, Conditions & Restrictions).
Maintenance and Repairs: HOA management companies are responsible for maintaining common areas, such as parks, swimming pools, and walking trails, and addressing maintenance or repair issues
Budgeting and Financial Management: HOA management companies manage the community's budget, collect dues, and ensure that funds are allocated effectively for community expenses.
Communication and Conflict Resolution: HOA management companies facilitate communication among homeowners and address any conflicts or disputes that may arise.

What is Property Management?

On the other hand, property management involves managing individual properties or rental units within a community. Full-service property management companies ensure that their properties are well-maintained, rented, and profitable for their owners. Key responsibilities of property management companies include:

Tenant Screening and Selection: Property management companies screen and select tenants, ensuring they are qualified and responsible.
Rent Collection and Accounting: Property management companies collect rent, manage accounting, and handle any financial transactions related to the property.
Maintenance and Repairs: Property management companies are liable for addressing maintenance and repair issues within their properties.
Lease Administration: Property management companies manage lease agreements, ensuring they are up-to-date and compliant with local laws.

Key Differences Between HOA and Property Management

1. Scope of Responsibility

HOA management companies manage the community, including common areas and community rules.

Property management companies focus on individual properties or rental units, ensuring they are well-maintained and rented effectively.

2. Decision-Making Authority

HOA management companies function under the direction of the HOA board, which has decision-making authority over community matters.

Property management companies operate under the direction of property owners or the HOA board but have different levels of authority in decision-making.

3, Membership and Fees

HOA membership is mandatory for homeowners within the community, and they pay dues to fund the association's activities.

Property owners hire Property management companies or the HOA board and are not membership-based organizations.

4. Conflict Resolution

HOAs resolve disputes among homeowners and enforce community rules.

Property management companies act like a mediator between property owners and tenants, resolving rent, maintenance, and lease agreement conflicts.

5. Legal Matters

HOAs can create and enforce legally binding rules and regulations for the community.

Property management companies must comply with certain legalities. This means local, state, and federal laws when managing properties and dealing with tenants.

Do HOAs Need a Management Company?

While HOAs can manage themselves, hiring a professional management company can be beneficial in several ways:

Expertise: HOA management companies have the knowledge and experience to handle complex community management tasks.
Time-Saving: HOA management companies can save time and effort for HOA board members, who can focus on other community matters.
Efficient Management: HOA management companies can ensure that community expenses are managed effectively and that the community is well-maintained.

Can an HOA Management Company Also Manage Rental Properties?

An HOA management company and a property management company have distinct roles and responsibilities. Still, a single company can provide HOA and property management services.

We know that HOA management companies focus on managing the common areas, enforcing community rules, collecting dues, and overseeing the overall operations of a homeowners association. Increases in HOA dues can be stressful, but the perks they provide are way too adorable!

Property management companies specialize in managing individual rental properties or units, handling tasks like tenant screening, rent collection, maintenance, and addressing tenant issues.

While the two types of companies have different primary responsibilities, a single company can provide HOA and property management services.

In such cases, the property management company must ensure that it understands and enforces the HOA's rules and regulations for any rental properties within the community.

A company can provide HOA and property management services if it has the necessary expertise and resources to handle each responsibility.

So yes, a reliable HOA management company can also manage rental properties within the HOA community, as long as it has the appropriate expertise and processes to handle the community's and individual property's level responsibilities effectively.

Final Verdict — HOA vs Property Management

In summary, HOA and property management are two distinct entities that play crucial roles in housing communities.

Understanding the differences between these two types of management is integral for making informed decisions about managing your community.

Whether you are a homeowner, property owner, or HOA board member, it is essential to recognize the unique responsibilities and expertise required for each type of management.

Doing so can ensure your community is well-managed, safe, and profitable.

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