Self-Managed VS Professionally Managed HOA’s
There are so many critical components to successfully managing a community and an in-depth knowledge of many different industries is a must have if you want your homeowners association to run smoothly and within the confines of the law.
These complexities are why the majority of homeowners associations in the Unites States choose to be managed by a professional HOA management company. However, there are still many associations that decide to go it alone.
Occasionally, the question of whether professional management is necessary for homeowners associations comes up. The short answer is that it is up to the Association itself to decide if professional management is in the best interest of the community or if self-management is sufficient. If you’re part of an association that is self-managed and you’ve recently been considering a change to professional management, here is some food for thought.
Every member of a Board of Directors for either a self-managed or professionally managed association is a volunteer, meaning they donate their time to help the Association run properly. Boards who work with professional management companies govern their associations, they don’t manage them. For instance, if the Association is in need of asphalt repair, the Board of Directors of a professionally managed association would make the decision to move forward with necessary repairs and their community manager would implement this decision, including vetting vendors for appropriate licensing and insurance, obtaining quotes from fully vetted vendors, checking proposals for accurate scopes of work and then overseeing the project once a vendor has been chosen by the Board. In essence, the Community Manager performs all of the heavy lifting, giving the volunteer Board Members back valuable time.
One of the most common irritations expressed to HOAMCO by Boards of self-managed communities is the sheer amount of work they must put in to manage the community and the lack of motivated volunteers to help get the work done.
Management of Onsite Employees
Self-managed communities range in size from smaller communities with low door counts to very large, life-style communities with onsite employees. When self-managed communities have onsite employees, a number of necessary functions have to be performed like hiring of new or seasonal employees, yearly reviews of employees, administering of disciplinary actions if necessary, termination of employees and payroll and benefits administration. While it’s true that these functions can be performed by Association employees or a General Manager, the liability in these cases remains with the Association instead of being shifted to a qualified professional management company. This remains one of the top reasons self-managed associations consider going professional.
Just like any other profession, community managers undergo hours of continued education every year to obtain and keep professional designations as well as to keep informed about industry trends and the latest in HOA law.
Working with a professional with an in-depth knowledge of HOA laws and statutes can keep an Association’s legal expenses to a minimum as well as keep the Board and the Association out of hot water.
Good Cop/ Bad Cop
Of all the reasons for a self-managed community to consider professional management, we believe this to be one of the most compelling.
A homeowners association is made up of a community of neighbors. We’ve found that most, if not the majority of all residents in managed communities have at least two goals in common: to enjoy the home they’ve invested time and money in and to protect their home values.
When a community is self-managed, the Board of Directors has little to no insulation when it comes to the collection of dues or when issuing violations to fellow residents. Without the Good Cop (the Board of Directors who are fellow residents just trying to maintain property values) and the Bad Cop (the management company that collects assessments, issues violations and occasionally has to collect bad debt) it can be hard for Board Members to enjoy being a resident of their community.
It has to be said that there are many self-managed communities that are doing a darn good job at keeping their communities running well and the residents are all more than satisfied. For those communities, professional management probably isn’t something you should consider. But if you’re a self-managed community that suspects you might benefit from professional management, we would be happy to answer any questions you might have. Please visit our website for more information about what HOAMCO can offer your Association.
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