HOA Management Company Problems: What Owners Can Do

Calls go unanswered, a fee shows up on your account that no one can explain, or your records request disappears. An HOA management company handles the day-to-day work of many communities, and problems with it can affect every owner. California and Nevada both set rules for managers and for the boards that hire them. This guide, part of our series on HOA board fiduciary duties, explains those rules and what owners can do.

What does an HOA management company do?

A manager usually collects assessments, pays vendors, keeps records, sends notices and handles owner questions. In California, management services include carrying out the board’s resolutions and administering association contracts (Business and Professions Code §11500).

The board hires the company and controls the contract. Owners generally cannot direct the manager themselves. That is why most complaints about a manager start with the board.

Does an HOA management company need a license?

Nevada: a person generally may not act as a community manager without a certificate (NRS 116A.400). The Real Estate Division can investigate managers, and the Commission can discipline them. Attorneys and board members acting in their roles are exempt.

California: there is no state license for HOA managers. A manager may use the title “certified common interest development manager” only after required coursework and exams (Business and Professions Code §11502). Claiming that title without qualifying is an unfair business practice.

California managers must also disclose their qualifications to the board each year (Business and Professions Code §11504). That includes whether they hold the certified title. Before a contract is signed or renewed, they must also say whether fidelity insurance covers association funds.

What must a manager disclose to the board?

Before a California management agreement is signed, the manager must give the board a recent written statement (Civil Code §5375). It lists the owners, any relevant licenses and certifications, and any business interests or incentives. It also says whether the manager receives referral fees from document providers.

In Nevada, the management agreement must be in writing and cover the fees, scope of work, termination terms and insurance (NRS 116A.620). It must also confirm that the association owns its books and records. Hidden vendor ties are a red flag. See our guide to HOA board conflicts of interest.

How must a manager handle association money?

In California, association funds held by a managing agent must go into a trust account or a board-directed account (Civil Code §5380). The agent may not commingle them with its own money and must keep records of every receipt and payment. Transfers from reserve or operating accounts generally need prior written board approval.

In Nevada, a community manager must keep client funds in separate accounts in the client’s name (NRS 116A.630). The manager also may not commingle funds or sign withdrawals from a reserve account (NRS 116A.640). California also requires the association’s fidelity insurance to cover the managing agent’s dishonest acts (Civil Code §5806).

If money seems to be missing, see our guide to HOA misuse of funds.

What are common HOA management company problems?

Owners often report ignored emails, wrong account balances and fees with no explanation. Other problems include late or missing financial reports, repairs that drag on, and vendors with ties to the manager. Collection charges are a frequent source of disputes. See our guide to HOA late fees and collection costs.

Some decisions are off limits to a manager. In California, only the board may decide to record a lien or start foreclosure, and it cannot delegate those decisions (Civil Code §§5673, 5705). See our guide to what an HOA lien means.

Can you get records from the management company?

The duty to produce records belongs to the association, even when the manager holds them. In California, managers must acknowledge in writing that the disclosure documents they provide to owners belong to the association, not the manager (Business and Professions Code §11504). Nevada management agreements must confirm the same (NRS 116A.620).

Send your request to the board, with a copy to the manager. See our guides to the California HOA records request and Nevada HOA records requests.

How do you fix problems with an HOA management company?

Document it: keep a log of requests, dates and responses. Save every email and statement.

Go to the board: send a short written complaint to the board, not just the manager. Raise it during the open forum and ask that it be noted in the minutes. Our guide to HOA board meeting rules explains your right to speak.

Escalate in Nevada: you can file a sworn complaint against a community manager with the Real Estate Division. First send the manager your concerns in writing and allow time for a response. The Division can investigate, but it cannot force refunds. Our Nevada Ombudsman guide explains the process for complaints against the association.

Push for change: owners can ask the board to replace the manager when its contract allows. In Nevada, the association may end the agreement without penalty on 30 days’ notice after the manager violates NRS Chapter 116 or 116A. If the board will not act, see our guide to removing a board member.

Our HOA dispute resolution team represents owners and boards in both states.

Frequently asked questions

Conclusion

A good manager can make a community run smoothly, and a poor one can cause constant problems. Nevada generally requires managers to hold a certificate, and California requires written disclosures. Both states require separate accounts, and California reserves lien and foreclosure decisions to the board.

Document the problem, take it to the board and use the state complaint process in Nevada if needed. For each state’s wider framework, see our Nevada NRS 116 guide and Davis-Stirling Act guide.