Operating and managing a homeowners’ association can be challenging and confusing. HOA Boards are typically made up of a group of volunteer owners from the community who are tasked with determining what their duties are and how to fulfill them. Many HOAs employ community management services to help run the association.
What Is HOA Management?
HOA management assists the board with its many duties and responsibilities, which helps the overall goal of the HOA to protect property values and maintain a desirable community. HOA management steps in to help the association with maintenance of the common areas, collecting assessments, collecting delinquencies, handling complaints, resolving conflicts, preparing budgets, managing reserve funds, and other duties that an HOA is required to carry out. This is helpful to boards that do not have time or knowledge to handle the many aspects of operating the HOA.
Does My HOA Need Management?
There are many community associations that are self-managed and operate successfully. One consideration when deciding whether the association needs HOA management is the size of the community. A large community may have more common elements and amenities to be maintained. Moreover, a large community usually generates greater volume of complaints, questions, variance requests, records, and assessments that need to be collected and managed. This can be stressful and difficult for the board.
Another factor to consider is the knowledge, or access to it, of the board members. HOAs need access to legal advice, accounting and tax services, financial services, insurance coverage, and companies to maintain common areas, such as landscaping companies. Experienced property managers are very knowledgeable about homeowners’ associations due to education and experience. Furthermore, HOA management companies typically have a large network of professionals that are utilized by HOAs. This can save the HOA a lot of time because the management company can contact and retain the necessary vendors and professionals on the association’s behalf.
Finding the Right Management Company
If the HOA determines it needs HOA management, the next step is finding the right management company. Management contracts typically last for a duration of one (1) year, but some are multi year contracts. Thus, it is important that the management company is the right fit for the association. First, the association should determine its needs, whether that be full-service management or help with particular aspects of operating the HOA. It is also necessary for the board to establish a budget for management services.
Next, the HOA board should send Requests for Proposals to the HOA management companies of interest. These requests should state the HOA’s budget and the desired scope of services. The management companies will then send the association a proposal, which outlines the fees and services it will provide.
Once the board has reviewed the management companies’ proposals, it should make a short list of management companies and begin to interview those candidates. The board should create a set of questions and criteria to evaluate and compare different companies. Budget is an important part of the decision process, but the cheapest company is not always the best. Make sure to weigh services against price.
After the HOA has chosen a management company, the board should review and negotiate the contract. It is important to ask questions about any terms or clauses the board is unsure about. The board should also negotiate any terms it feels are unfair or that its uncomfortable with. An HOA attorney can also review and negotiate the contract on your behalf.
Finally, after the contract is signed and the management company is providing services to the HOA, the board should monitor the services and its satisfaction with the company. Make sure the company is fulfilling its duties pursuant to the contract and discuss any dissatisfaction with the manager.
If your homeowners’ association has questions regarding HOA management or needs help reviewing and/or negotiating a management contract, please reach out to Richter Law.
By: Attorney Amber Richter. See profile here.
