Why Hire a Homeowners Association Management Company?
Trust. Choosing to bring in experts can begin a sequence of trusting relationships; the homeowners trust their elected board of directors to make good decisions, and the board trusts the HOA community management team to carry out the functions of the organization professionally.
There are a variety of instances in which it makes sense to tap a management company. Of course, each situation is unique, and the decision ultimately rests in the hands of the board members, but it may help to consider some common situations.
Most board members are volunteers, and have very little formal training in
homeowners association management. Volunteering to take the reins of a homeowners
association management project is a noble gesture in itself. Often, board members
are respected members of the community and are looked to for guidance, so it’s
natural that they become elected to take on a leadership role within the community.
Some of them realize how much of a hassle it can be only after they’ve committed.
Situations often arise and the board doesn’t have a clear cut solution, so
they begin to search for answers. During their search, they realize how incredibly
time consuming this job really is. For example, they might find themselves
in the middle of a dispute between two neighbors about a grey area in the code
of conduct. After reading and replying to several nasty emails, speaking with
the individuals about the problem, and speaking with lawyers to make necessary
changes to the code, they are still receiving more complaints from other neighbors
who are now upset about the changes that were made. This is a typical scenario.
It’s easy to become overwhelmed with all the tasks that are required to operate
a successful homeowners association. Management of the daily operations becomes
more and more time consuming, and the need for an HOA community management
company becomes apparent.
Bookkeeping and balancing the budget is another common problem for HOAs, especially for larger subdivisions. It’s critically important to craft an annual budget and set HOA fees at a level that will cover operating and reserve expenses. Where will the capital needed to repave all the private roads come from if the reserve funds aren’t managed properly? Usually in this scenario homeowners are hit with big assessments to cover the repairs. To say that they wouldn’t be happy about it would be the understatement of the century. It’s this type of dispute that can give HOAs a bad reputation, and can result in the entire board vacating their positions -- it has happened.
Some boards may be operating well because a select few board members are contributing a huge portion of the work. It’s certainly not fair for 10% of the board to do 90% of the work, and it’s easy for these members to get burned out. What happens when they step down? Usually chaos.
Board members almost always have other full time jobs or businesses. Balancing their careers, personal lives, and their homeowners association management duties can become a hassle. Also, many people aren’t comfortable with the idea of fining their friends and neighbors for not being compliant with the community bylaws, but showing any favoritism would certainly stir up trouble with the rest of the neighborhood. Many people have achieved balance by leaving these matters in the hands of a professional HOA community management company.
HOA Management Directory was
created to make the search as painless as possible.
What Can Professional HOA Community Management Do For Me?
In short, everything! A full service HOA community management firm can and should take the weight of the world off the shoulders of the board. The one major thing that management companies don’t do is make decisions on the board’s behalf; apart from that, everything is possible.
For new homeowners associations, management firms can build the organization the right way from the ground up. Professionals handle tasks such as launching and maintaining required websites and logs, setting up good bookkeeping systems, creating balanced budgets, and forming bylaws and model codes of conduct. Getting these systems in place from the very beginning creates synergy in the community.
Existing HOAs usually get an overhaul of all the services mentioned above, along with a good dose of restructuring the systems already in place to become more efficient.
A good homeowners association management program can save board members hours of time and tons of capital. HOA community management companies know the laws governing HOAs for their specific state. These laws vary state to state, so it’s important to make sure the management firm is familiar with local guidelines. Most management companies will have their own systems that can be adapted to each homeowners association, and these systems are designed to make the community organization as successful as possible.
Here are just a few things that can be expected from a professional homeowners association management group:
- forming bylaws and model codes of conduct
- launching and maintaining websites
- organizing monthly meetings
- creating and maintaining a balanced budget
- upkeep of subdivision amenities (swimming pool, fitness center, clubhouse, tennis courts, walking trails)
- generating and sending appropriate letters
- handling disputes and complaints from homeowners
- keeping up to date with state laws
- assessing outside contractors and managing the projects
- managing reserve funds
- going to court for major disputes
- keeping up with reporting and all fiduciary responsibilities
Services may vary based on the individual company. Be sure to check out our resources for a list of questions to ask when interviewing different firms.
Some of the happiest board members have found that they prefer hiring a homeowners
association management firm to handle the daily issues, which leaves them free
to focus on the bigger picture. Those that have management in place find themselves
in a more supervisory role: reviewing weekly action lists, attending quarterly
meetings, and making decisions that impact the overall direction of the organization
instead of being bogged down by day-to-day operations.
What's Next?... The Transition
Shifting the responsibility of management duties over to the hands of a professional firm is a fairly seamless process. Most homeowners association managers will start by acquiring all legal documents for review, and making necessary changes. New bank accounts will often be opened. Bookkeeping and collection systems will be implemented. The best firms even send out a letter to all homeowners introducing the company and making themselves available to handle all questions and concerns regarding the HOA.
Each community has its own unique set of circumstances. The decision to hire
professionals should be carefully considered by board members. Browse our list
of HOA management companies to find one in your area, and consult with
them about your specific needs.