HOA management might take a lot of work to grasp for new homeowners associations or board members. How exactly do professional management companies help? Moreover, is hiring a management company right for your HOA? Let’s find out.
What Is HOA Management?
A homeowners association (HOA) primarily manages a community’s daily operations. They enforce rules, collect dues, and maintain common areas to maintain property values. The HOA comprises of community members who volunteer to be part of the board.
Meanwhile, HOA community management means the handling or administration of a homeowners association. These include tasks the board members do every day. For example, it can include enforcing rules, collecting dues, managing finances, conducting repairs and maintenance activities, or coordinating with vendors.
What Does an HOA Management Company Do?
A professional management company is an organization that provides HOA management services to homeowners associations. These companies take over many of the tasks board members usually perform. They oversee operations, manage finances, and supervise common area maintenance. Their duties can be extensive and may include the following:
- Conducting regular community inspections
- Tracking service and maintenance requests
- Overseeing repairs and maintenance
- Organizing HOA events and functions
- Collecting dues
- Managing payables
- Sending invoices
- Handling insurance
- Assisting with escrow
- Preparing monthly reports and financial statements
- Planning annual budgets
- Attending, facilitating, and organizing board meetings
- Sending meeting notices
- Taking meeting minutes
- Offering professional and legal advice to board members
HOAs usually hire management companies because these companies have more experience and expertise in HOA management. They’re fully equipped for the task and have a list of vendors and access to legal counsel. Moreover, board members usually lack the time to handle all of these tasks because they’re only volunteers.
Are HOA Managers Also Board Members?
Management companies and their HOA managers are not board members. They don’t have the authority to make final decisions on community affairs. The HOA board is still responsible for making important choices. A management company simply exists to aid and advise the board members. They act sort of like the middleman between homeowners and the HOA board.
For instance, management companies only send notices to the board when a homeowner violates a rule. They also send notices when there are architectural or maintenance requests. Management companies usually have a request form homeowners use to send these requests to the board members. Once the request reaches the board, it’s up to them to decide what to do.
Why Should You Hire a Professional Management Company?
Many HOAs opt for professional homeowners association management because it has many advantages. Here are some of the benefits professional management brings:
1. Clarity and Consistency
A professional management company is usually more well-versed in clarifying HOA policies. They can make the rules and regulations easier to follow. Companies can also disseminate the HOA’s policies much more effectively so every homeowner knows about all the updates. Moreover, management companies are usually less biased when it comes to enforcing rules. This ensures consistency so there is no favoritism in a community.
Management companies bring together a diverse pool of experts that can help with various duties. These include experts in property management, accounting, law, finance, and marketing. Through these experts, management companies can help HOAs better manage their communities according to proper standards. They also have access to professional management software and website services that can streamline HOA management.
3. Legal Knowledge
Board members are rarely well-versed in city, state, or federal laws. Thus, they may get into some hot water if they manage the HOA poorly. A management company can help with that as they have extensive legal experience and knowledge. They’re familiar with relevant laws like the Fair Housing Act and Fair Debt Collection Practices Act. This is helpful so your HOA doesn’t get into any legal trouble.
4. Vendor Relationships and Management
HOAs need a healthy working relationship with vendors and contractors of all kinds. They also need access to reliable vendors for various tasks like pressure washing, plumbing, and roof maintenance. But, it can be hard to find trustworthy vendors because board members may not know where to look.
This is where professional management companies come in. Through a management company, HOAs can easily access a list of vendors to ensure their community is in shape. Management companies can also professionally de-escalate issues and manage relationships when there are difficult vendors.
5. Better Communication
The HOA board has to regularly communicate with homeowners to ensure satisfaction and clarity. They have to receive complaints from community members and consider their suggestions. After all, hearing people out is one of the best ways to keep them content.
Unfortunately, board members don’t always have the time to communicate with everyone. But, they can communicate more effectively and ensure everyone is heard through a management company. These companies have the necessary tools to keep communication lines open. They can do it through physical suggestion boxes or online forms to ensure the board knows what people need.
How Much Does Professional HOA Management Cost?
Professional management companies cost money but there’s no standard amount for how much each charges. On average, they can charge $10 to $20 per unit every month. This covers the cost of their general management fees.
On the other hand, some companies also add extra fees like initiation or exit fees. The former cover the start-up costs like bookkeeping and file transitions. This can cost a few thousand dollars or even more than $30,000 depending on the company. Meanwhile, exit fees cover transition costs.
In addition, some management companies add special service fees to their pricing. These fees cover additional services the company conducts outside of its package. For instance, a management company might agree to attend board meetings twice a month. But, if an HOA asks for additional attendance, the company may charge special service fees. Remember to review your management contract to find out what a company’s fees are like and what their scope is.
Which Communities Should Hire HOA Management Companies?
Smaller communities usually self-manage their HOA because there’s not as much work. The board doesn’t need to invest as much time or effort in keeping the community in good condition. There are fewer concerns from the homeowners and it’s easier to communicate.
However, larger communities may need the help of management companies because there’s more work to be done. That’s because larger communities may conduct more repairs and maintenance activities. There may also be more delinquent cases that need professional management and legal expertise.
Apart from size, associations may also need professional management if they have more facilities and amenities. It’s also necessary if your community lacks volunteers or if those volunteers don’t have enough time or expertise.
Manage Your Community Better
HOA management may be difficult, especially if you don’t have the time or knowledge to do it. Thankfully, there are great management companies out there that can help with running your community.
If you’re in need of one in Austin, Houston, San Antonio, or surrounding areas, 88 Doors can help. Contact us online or call us at (512) 348-8821 to ask for a quotation today!