Behind the Curtain: How HOA Management Business Models Are Changing

Are hidden alliances and revenue structures adding unseen costs to your HOA's operating expenses?

For more than 30 years, I worked inside the HOA management industry - including at the executive level and as a company owner.

What we are seeing today is not simply the continuation of traditional management practices. In some organizations, it represents an entirely new way of doing business - and those models are expanding rapidly.

Across the country, management companies are consolidating, aligning with private equity, and adopting increasingly complex revenue structures that go far beyond the standard management fee.

These structures may include:

• Earned banking credits

• Affiliated vendor programs tied to shared income

• Insurance commission participation

• Technology-driven revenue and platform partnerships

  
  

None of these practices are automatically improper under the current “disclosure” framework commonly used in the homeowner association industry.

However, disclosure alone does not answer the more important question:

Do the incentives created by these arrangements align with the fiduciary responsibility owed to the association?

And just as importantly: even if something is technically legal, is it structured in a way that obscures the true incentive - making it difficult for a volunteer board to understand the real impact?

This is a conversation boards should be having with their legal counsel, with a clear request:

Provide disclosure of any known, or potential practices, relationships, or compensation structures, including known lawsuits - even if they are described as “standard,” “proprietary,” or technically permissible - if they could create a conflict or misalignment with the association’s best interest.

The Casa Alliance Management Company Conflict of Interest Disclosure is a great way to start the conversation.

Conflict of Interest Disclosure Form

For decades, many volunteer directors operated under a reasonable assumption that their management company was already handling the details in the association’s best interest.

In many cases, that trust was earned. But trust isn’t a substitute for clear, written understanding - especially when modern revenue models can create incentives that boards never see unless they ask.

Most boards are asked to make long-term contractual decisions without a clear, practical explanation of how money may be generated beyond the management fee - or how those incentives could influence recommendations around banking, vendors, insurance, or technology.

CASA Alliance exists for two reasons:

• To bring visibility to practices that have historically been poorly understood or inconsistently disclosed;

  
  

• To provide practical tools that help boards ask informed, written questions before decisions are finalized.

  
  

As this information becomes more widely understood, expectations of transparency will continue to rise.

Ethical companies should welcome that shift.

Because transparency should never be controversial.