Boards May Delegate Operations to a Manager
Agent of the Association. A managing agent is one who represents another, called the principal, in dealings with third persons. (Civ. Code § 2295) A manager is "a person or entity who, for compensation or in expectation of compensation, exercises control over the assets of a common interest development." (Civ. Code § 4158(a); Berryman v. Merit Management) Boards may delegate the day-to-day operations of their associations. Some duties, however, cannot be delegated and must remain with the board.
Common Interest Development Manager. A CID manager does not include a common interest development management firm. (Bus & Prof. § 11503) It means an individual who, for compensation or in expectation of compensation, provides or contracts to provide management or financial services or represents himself or herself to act in the capacity of providing management or financial services to a community association. It includes:
- A person in a partnership, a corporation, or any other business entity who advises, supervises, and directs the activity of an association.
- A person operating under a fictitious business name who provides the services of a manager. (Bus. & Prof. § 11501)
Management Services. While there are different types of management structures, management services means an act performed or offered in an advisory capacity that includes the following:
- Administering or supervising the financial or common area assets of a community association at the direction of the board. (Civ. Code § 5380)
- Implementing resolutions and directives of the board.
- Implementing provisions of governing documents, which govern the operation of the association.
- Administering contracts, including insurance contracts, vendors, contractors, and other third-party providers of goods and services. (Bus. & Prof. § 11500(d))
Recording Management Information. As provided for in Civil Code § 4210, to facilitate the collection of assessments, boards of directors may record a statement with the County Recorder with the following information:
- The name of the association.
- The name and address of a managing agent, treasurer, or other person authorized to receive assessments.
- A daytime telephone number of the authorized party.
- A list of separate interests subject to assessment by the association, showing the assessor's parcel number or legal description, or both, of the separate interests.
- The recording information identifying the CC&Rs.
Communications With HOA Attorney. See "Attorney-Client Privilege."
Forms of HOA Management
The primary duty of a board of directors is to manage the association. While some responsibilities are nondelegable, boards can delegate duties to a managing agent. Following are the forms of management commonly found in homeowner associations:
Self-Management. Small associations frequently use self-management, i.e., the board directly manages the association without professional management.
Management Company. Small and medium-sized associations often employ a management company to handle day-to-day operations. It includes receiving assessments, paying bills, preparing monthly financial reports (Civ. Code § 5500), preparing and mailing the annual budget report and policy statement (Civ. Code § 5300 and § 5310), performing property inspections, soliciting bids for projects, handling correspondence, preparing board meeting packets, etc.
Onsite Management. Large and high-end mid-sized associations often employ a full-time onsite manager to handle operations. Sending monthly invoices, mailing bills, and receiving assessments is done in-house or contracted with a management company. The onsite manager can be a direct employee of the association or an employee of a management company. The arrangement provides the full service described above, but at a higher level, as management and staff are on-site.
Community Managers
Individual managers can be classified into the following two categories:
Portfolio Managers. A portfolio manager is an individual who works for a management company and manages multiple accounts. The manager works from the management company's office, handling board and homeowner requests by telephone and email.
Onsite Managers. An onsite manager handles a single association account, working from the association's office. The manager can either be employed directly by the association or be on the payroll of a management company.
Management Companies
Management companies generally fall into four categories based on size. All will offer financial management services or full management.
- Small. A small company has a handful of employees who manage a small number of associations within a small region.
- Medium. A medium-sized company has a larger staff and a region that covers multiple counties.
- Large. A large company may offer services throughout the state, including in-house maintenance services.
- Mega. Mega companies cover multiple states and may offer management services in adjacent countries. They might also provide in-house insurance, banking, and maintenance services.
Managers Are Not Responsible for Board Decisions
Alarcon v. Avalon Mgmt. Group (2026 Unpublished decision). The Diamond Bar Village condominium complex suffered from decades of deferred maintenance. In 2017, the HOA retained a structural engineer to evaluate the condition of the buildings. The 2017 report identified extensive roof damage caused by termites, dry rot, and mold, as well as long-term wear and tear affecting the structural walls. Although the report warned that the damage should be addressed promptly to avoid future risks, it concluded that the buildings did not pose an immediate life-safety threat at that time. Four years later, the City of Diamond Bar requested an updated inspection. The engineer’s 2021 report stated that all buildings had roof damage from decades of neglected maintenance and designated the second-floor units as “red” tagged, meaning they posed a high risk to the “occupancy/life-safety capacity of each building,” while the first-floor units were “yellow” tagged as medium risk. Based on the 2021 report, the City issued an order requiring residents to vacate the complex.
Plaintiffs, who owned 63 of the 150 units in the condominium complex, sued Avalon Management, alleging it acted negligently by failing to perform repairs identified in the reports, failing to seal walls after repairs, failing to disclose the reports to owners and buyers, advising the HOA not to disclose the reports, failing to conduct a background check on the engineer, and failing to obtain a second opinion before forwarding the 2021 report to the City. The trial court granted Avalon’s motion for summary judgment. The appellate court affirmed, holding that Avalon, as the HOA’s managing agent, did not owe an independent duty of care to the individual homeowners. Avalon assisted the HOA with property management and maintenance issues, but its authority was limited by the management agreement. The agreement provided that Avalon could only act at the direction of the HOA’s board and could only implement the board’s decisions.
The appellate court emphasized that the HOA itself owed fiduciary duties to the homeowners and already had statutory and contractual obligations to disclose material information and maintain the common areas. Because homeowners already had remedies available against the HOA, the court found that imposing a separate tort duty on Avalon was unnecessary. The appellate court also reasoned that Avalon’s role in the events leading to the vacate order was indirect and that imposing potentially massive liability ($1.7 million) on the management company would be disproportionate to its actual level of control and fault. In addition, the appellate court expressed concern that recognizing such a duty would interfere with the HOA-management relationship by pressuring management companies to act contrary to HOA boards' decisions to avoid personal liability.
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