Understanding the HOA management agreement for first-timers

If you’re a first-time board member or homeowner navigating an HOA management agreement, it can feel a bit overwhelming. But understanding the key elements of the agreement is essential to ensure transparency, accountability, and smooth operations for your community.

1. Scope of Services

The agreement should outline exactly what the management company will handle—everything from financial management and maintenance coordination to homeowner communication and compliance monitoring. Just as important, it should also specify what’s excluded. Many agreements explicitly state that services like internal board communications, on-site concierge employees, legal services, and mail receiving are not included. Understanding both the inclusions and exclusions helps set clear expectations.

2. Fee Structure

Look for clear details on how fees are calculated, what’s included in the base fee, and what might incur additional charges. This includes monthly management fees, leasing fees, and any extra costs for special projects.

3. Term and Termination

The agreement should specify how long it lasts and how either party can terminate it, including any required notice period. This ensures flexibility and protection if the relationship isn’t a good fit.

4. Insurance and Indemnification

Management companies typically require that they be added as an additional insured under the HOA’s policy. Indemnification clauses clarify liability, protecting both the board and the manager in case of disputes or claims.

5. Communication and Decision-Making

A good agreement sets expectations for how the manager communicates with the board and homeowners, how decisions are approved, and how approvals are handled for expenses. Keybox, for example, includes clear approval limits and an onboarding system to make everything transparent.

Key Points in an HOA Management Agreement

• Detailed scope of services—including what’s not included
• Clear fee structure and additional costs
• Defined term and termination process
• Insurance and indemnification requirements
• Clear communication and approval protocols

Keybox makes understanding and navigating the management agreement simple. Fill out our quick online form to get an instant, customized proposal and see how we make HOA management easy and transparent.