Do you know what a quorum is? What about a motion or a proxy? Although you don’t need to be fluent in “legalese” to be a homeowner association (HOA) manager, there are several common terms you need to know. Understanding HOA lingo will streamline your business and improve how you communicate with your clients.
Smaller HOAs are often less formal and won’t be so stringent about using proper terminology, while others may make you feel like you’re speaking a foreign language! When you’re running an HOA management business, you need to be able to handle all kinds of clients. Be ready to adapt to each HOA’s unique community culture. Learning common HOA terms will help you “talk the talk” with your clients.
If you’re new to HOA management or simply need a refresher, there are several basic terms you need to know.
First, it’s very helpful to understand the context of using HOA terminology. Where can you expect to use this lingo? Should you use these terms when you deal with your clients’ residents and vendors, or just board members?
As with anything related to HOA management, each of your clients will have unique needs and preferences so there’s no one-size-fits-all answer about using HOA terminology. However, in general, you’ll be using HOA lingo most often when you work with board members. Direct communication with residents and vendors is less formal.
HOA terms are also used if you’re conducting business on the HOA’s behalf, such as working with a CPA or an attorney. HOA terms are common in the industry. Because everyone uses a standard definition for these terms, it makes communication easier when you’re discussing the association with third parties.
For these reasons, it’s important to know general HOA terminology. The definitions below are some of the most common terms. For more obscure, in-depth definitions, we recommend checking out this HOA glossary.
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HOA bylaws are the governing rules that determine how the association conducts its business. They cover rules for the association’s board members, rather than rules for residents such as quiet hours or parking restrictions. For example, bylaws generally answer the following questions:
In HOA terminology, a motion is any proposal for action within the association. A motion could be the introduction of a new community rule, a new project, or other changes that affect the association and its members.
Usually, any member of the association can introduce a new motion at an open board meeting. However, the protocol for introducing a motion may be different depending on the HOA; motions are another subject covered by the HOA’s bylaws.
There are six types of motions:
A proxy is someone who votes on behalf of an HOA member. Each member of the association is guaranteed the right to vote on motions at board meetings. When a member can’t be present for a meeting, he or she can send an official proxy to vote in their place. Often, members must designate their proxy in writing. Some associations are beginning to automate their proxy protocol online.
In the HOA business, a quorum refers to the minimum number of members who must attend each meeting. Without reaching a full quorum, the HOA board cannot conduct votes or other official business and meetings must be rescheduled. Quorums are defined in the HOA bylaws and may also be affected by state or local law.
When an HOA member can’t vote on a motion due to ethical or legal concerns, they must recuse themselves. This means their attendance is recorded but their vote is nullified. A recusal usually occurs when the member has a conflict of interest with the proposed motion. For example, a member should recuse themselves if they’re a general contractor bidding on a construction job for the association.
If HOA lingo is still confusing, CINC Systems is here to help! Our software platform for association management and accounting helps your business run more smoothly by automating many daily tasks. This frees you up to focus your energy elsewhere, such as studying new terminology.
To see how CINC Systems can help you deliver the best quality service to your HOA management clients, give us a try and sign up for a free demo.