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:

  • Having multiple Board members sign off on any new vendor.
  • Mandating Board approval for any bill payment over a certain dollar amount.

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.

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:

  • Try to find a management company that has a wealth of experience serving communities in your local area.
  • Seek recommendations from a trusted real estate agent in the area.
  • Pay attention to online reviews, BBB accreditation, and testimonials from previous clients.
  • Interview multiple managers before hiring anyone, and ask questions about continuous education and training.
  • Make sure you have a written contract that clearly outlines expectations and the scope of responsibilities.

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.

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Bryan Kuester

Bryan Kuester

Bryan is the CEO of Kuester Management Group. He has over 15 years of managing community associations throughout North and South Carolina.

His specialties include Community Association Management - maintenance, budgeting for operational and reserve funding, long-range planning, covenant enforcement, amenity management, onsite management, large scale management.