Whether an HOA is a small community of single family homes or a large community of condominiums, there is a management option to suit its needs.
The first option is self-management, when the board of directors is responsible for every task related to the HOA. They collect dues and pay bills, arrange vendor contracts and maintenance, issue violations, and everything in between. Except in the smallest single family associations without any amenities, this can become difficult. Property management is a full time job and as board members often have real full time jobs and do not receive any compensation for being a board member, managing the community is not always the priority. In small associations, it can be easy to collect dues and pay a handful of bills and not need to do much more, but the larger the community, the more work there is.
Some associations choose to hire a CPA or accounting-only management firm to handle their finances so the board of directors can focus on other issues in the community. By hiring another party to oversee financials, the board is able to provide the attention that is needed in other areas such as major landscaping and maintenance projects or pool related business.
Remote management is an option for communities who do not need a property manager able to be on site. A remote management company can handle many of the same responsibilities as a standard management company like coordinating vendors and billing and accounting, but the board of directors meets with the vendors at the property and handles all covenant enforcement. This provides the community with the necessary administration experience a management company can provide, but allows the association to save money while reducing the workload of the board.
Full-service property management is often the best option for large single family communities with major amenities, and townhome and condo associations of all sizes. A professional property management firm has the experience and resources to handle the day to day operations of the association, alleviating the stress from the board of directors but still allowing them to make the decisions. The property manager can seek quotes from multiple companies before presenting them to the board to choose whose services to retain, keeping the board from doing hours of research. Full-service management can also include accounting, document preparation and record storage, mailing and legal services, and covenant enforcement. Most management companies will also create custom management plans to provide only the services a community needs or a board wants. While this is the most expensive management option, it can also be the most cost effective in the long run as professional management companies are bonded and insured and can usually secure better contracts with various vendors who offer better pricing for management companies.
Consultation firms offer a solution somewhere between self-management and full-service management. A consultant can be brought in on a need by need basis, helping the board rehabilitate their community and making them completely self-sufficient, or only providing knowledge and assistance in difficult situations. Consulting fees can be high as they are often by the hour, but some associations find the service to be worth it.
Before making any decisions on a management option, boards of directors should do extensive research into every possibility and once they’ve selected the route they’d like to pursue, research into the firms that offer the option they want. Selecting the best option for the community should be the priority.
