HOA boards must address challenges and issues that arise due to conflicts between members and board members. Situations will arise in which members disagree about important issues. For this reason, HOAs and other organizations must draw up contracts to ensure that all members adhere to policies, procedures, and regulations.


If conflict ensues, a contract reminds everyone of what was agreed upon between the board and the members. Contracts are legally binding and provide leverage when settling disagreements. Below, we explore some of the reasons why you need clearly defined contracts in your HOA.

Contracts Reinforce the Reserve Study

A reserve study prepares you for expenses that could arise over a long period for as long as the HOA is in effect. An example of this would be building expenses, landscaping, code enforcement, natural disasters, and governmental regulations.


If you have no contract in place, the members of an HOA could incur unforeseen expenses that wind up coming out of the budget, which can throw your reserve study off. In essence, contracts are a financially responsible means for keeping your reserve study on track.

Contracts Empower Property Management Companies

Property management companies can perform their functions more effectively when the rules are set in place and contracts are signed. If your tenants or HOA members know what the regulations are, it allows us to enforce them as needed.


We can better serve you, the client, without any ambiguity in the guidelines. Contracts give us the leverage we need when dealing with HOA members who don’t want to play by the rules. They allow us to protect property owners or board members because the contracts protect us.


Contracts Bind Member Agreements on a Range of Issues

Any contract with an HOA management company should include the specifics on a range of issues that involve the members. Some possible topics might include:


●        What the HOA management company is responsible for handling

●        The board's authority and the members' accountability

●        Services and benefits to the members

●        Disciplinary actions

●        The rights of the individual versus the power of the organization

●        Responsibilities regarding maintenance monitoring and approval

Property Management Services in Eden Prairie, Minnesota

Gassen offers premier property management services for HOAs and property managers in Eden Prairie, Minneapolis, and St. Paul, Minnesota. Our team of financial experts can provide accounting services, local management, and manage upcoming projects.


To schedule an initial consultation, call us at 952-922-5575, or you can message us on our contact page.