Property Management Companies vs HOAs: Who’s The Boss?
Many homeowners’ associations (HOAs) in Florida are what is known as self-managed; they handle their finances in-house, out of either necessity or a simple belief that outside help is not necessary. Associations that are larger, or deal in more complex financial transactions, can and do engage outside help to manage their affairs, though they are not required to by Florida law. These property management companies can be lifesavers for large, busy associations, but sometimes there is confusion between the board of directors and the management company, or between owners and either of these actors, as to who has the authority to do what. It is crucial that each actor be aware of their own rights and responsibilities.
The Board Hires Management
Both a condo board and an HOA, by law, are presumed to have a fiduciary duty to the owners within their communities. This means that they are required to act in a way that most benefits the owners, rather than acting in their own self interest. One of the ways that a board can act in its owners’ best interests is to engage the services of a property management company if it believes doing so is the best option for the association. While some states require a property manager oversee a condo board or HOA of a certain size, Florida leaves the decision entirely in the hands of the board, which also means that if problems develop, those are on the board’s proverbial head as well.
There are many different types of activities that a board can delegate to a property manager, many of which are financial – a property manager may collect any special assessments, for example, or process standard fees collected from owners or tenants. Other duties might include being the liaison between the board and the owners in terms of announcements or notice of meetings, and handling common area maintenance issues. Essentially, the property management company will assist the board in whatever way the board requests; because property managers and their companies are hired by the board or HOA, which means that the management company will always answer to the board, rather than the other way around.
It is important to keep in mind that property managers do not have the same relationship with the owners in a condo association or HOA – they do not owe any kind of fiduciary duty. Nor does the presence of a property management company relieve the board of directors of your association from its fiduciary duty or its responsibilities to the association’s residents and owners. A property management company is an entity that is designed to assist a condo board or HOA in effectively managing its responsibilities; if the board makes a mistake or acts inappropriately, they are still responsible for their actions.
There is also a major difference in how disputes should be handled between owners and their boards, versus disputes between owners and property managers. A condo or parcel owner who has a dispute with their condo association or HOA will generally be encouraged in Florida to go through alternative dispute resolution, such as mediation or arbitration, rather than filing suit in court. A dispute with the property manager, however, should generally be brought to the attention of the board, given its ultimate authority over the property manager.
Call A Tampa Real Estate Litigation Attorney
A condo board or an HOA must be kept running appropriately, and very often, property management companies can greatly assist in the upkeep of the association. However, it is important that all parties involved – board members, property managers, and owners – understand their roles in the proper maintenance of the condominium or homeowners’ association. The Seward Law Office, P.A. has been serving Tampa for a long time, and has handled real estate matters for associations and owners alike. Contact us today at 813-252-6789 to speak to a Tampa HOA & condo association attorney.