Who Regulates HOA Management Companies?
To help ensure the smooth management of your homeowners association, your Board may ultimately decide to bring in a property management company. Management companies can yield many benefits on the Association's behalf, working closely with the Board in a supportive and advisory role.
Should you ever experience any friction with your management team, you may rightly wonder about any relevant regulatory bodies. The truth is, HOA management companies are usually not very aggressively regulated. What's more, laws pertaining to HOAs usually have a lot more to do with the Associations themselves than with the management company.
With that said, it's worth reflecting on some of the ins and outs of the HOA regulatory environment. If you have any specific queries, you can always reach out to your management team directly. Kuester Management Group is pleased to be a leading HOA management company in Charlotte NC, Huntersville NC, Wilmington NC, Myrtle Beach SC, and Fort Mill SC. We are pleased to answer questions from Board members here in the Carolinas.
The Regulative Role of the HOA Board
When questions about regulation arise, our minds tend to gravitate toward government agencies and bureaus. And yet, when it comes to regulating HOA management companies, the most meaningful presence is the Homeowners Association itself. Specifically, it's the Board of Directors that provides oversight and structure to the management team, and the management team should take their cues directly from the Board.
Here it's important to keep in mind that, when homeowner associations hire community management companies, they give them quite a lot of power and insight. For example, your management company will inevitably have access to sensitive financial information. It will also have some authority to enforce rules within your community association. In short, your HOA management team can have a significant effect on the overall health of your community, including its property values.
As such, it's crucial for the Board to do their due diligence before bringing in a property manager. And, it's wise for the Board to implement some safeguards and controls, allowing them to regulate the property manager's actions within the community. Some examples of these safeguards include:
Regulation at the Local, City, and State Level
There are some HOA regulations in place at the local, city, and state level. These regulations are highly variable, so it's always important to check the specifics in your municipality. Often, HOA regulations are quite lax in more rural and suburban areas, but a bit more rigid within cities. Also remember that these regulations tend to be directed at the HOA itself, not management companies.
With any specific questions about regulating your management team, you may wish to seek out legal advice from a private attorney or a full team of HOA attorneys.
Recommended by LinkedIn
What About Federal Law?
As of right now, there are no federal laws that specifically regulate HOA management companies. Of course, management teams must remain compliant with business laws and best practices in general, otherwise the HOA may take legal action on behalf of the property owners it represents.
Tips for Finding a Reputable HOA Management Company
From the perspective of the HOA Board, it's vital to seek a management team that's basically reputable and trustworthy, rendering regulatory compliance a peripheral concern. Some general guidelines include:
Frequently Asked Questions
Who regulates HOA management companies in SC/NC?
The U.S. Department of Housing and Urban Development (HUD) enforces laws related to HOA communities, though these are targeted toward protecting individual rights as opposed to regulating management companies per se.
Does local law supersede HOA rules?
Yes, local law always takes precedence over the rules and regulations of your HOA.
Can I sue my HOA?
Homeowners are allowed by law to sue their HOA, but it is always worth pursuing other forms of conflict resolution first, including mediation or a meeting with the property management company.
What powers does the president of an HOA have?
The authority of the HOA president should be clearly outlined in the governing documents of the Association.
Retired HealthCare
1dI understand turning to the management company, but the management company is the problem and my board is not doing anything about it. Can you guide me as to how we could resolve certain issues that come up in my complex. We’re really having a tough time. We’ve gone through four management companies since I am here and I am here It’ll be four years in January 2025. We’ve also had raises in the comman dues as well as three assessments. Two of those assessments have been within a 10 month period. We seem to have no money in the reserves. Also the insurance that is covering the complex has been going up and up and we’ve been dropped by the current provider. We’re now in the market for more insurance, but the premiums are very very high. It’s really getting too pricey to live here.