Even though smaller condominium associations may seem easier to manage, they have unique challenges that HOA board members have a difficult time dealing with. Residents of smaller condominium associations have a smaller pool of potential services that their HOA can offer to them due to the decreased member dues received by the HOA and the larger costs that are necessary to make a positive difference in their community. If you need help in managing small condominium associations, here are some tips to help.
How to Go About Managing Small Condominium Associations
1. Raising the Necessary Funding
If a condominium association has only 20 units, then there are only 20 residents paying dues that they can allocate to their HOA budget. HOAs have to be very careful when deciding what to charge their small number of residents and to ensure that the fees are not so excessive that they deter potential residents from investing in properties located within their communities.
If there are any changes to projected fees, residents need to be promptly notified with a reason for the increase to provide them with the opportunity to prepare their finances for the increase in dues.
2. Maintaining Transparency with Residents
One of the most important tips on managing small condominium associations is being transparent. Since residents in smaller condominium associations tend to pay more, the need for transparency on how finances are being used becomes essential.
HOA boards should make every effort to show residents the value of what they are paying for through prompt repair requests and community-building events that improve the quality of life within their communities.
Failure to do this can cause low morale amongst residents and even a potential lawsuit should the HOA violate any of the resident’s legal rights. Avoiding legal troubles is pivotal for a smaller HOA since they will not have the capital to defend themselves easily in court.
3. Choosing the Right HOA External Management Company
Smaller HOAs that are within small condominiums have a constant debate as to whether they should be outsourcing certain administrative procedures to an external management company.
HOAs need to see what kind of pricing they can obtain and whether that provides them with a higher quality of service to their residents. If they can successfully outsource repair requests, dues payments, and electronic correspondence to an external management company, their residents will see value in the HOA dues that they are paying.
Sometimes, it is also worth considering if the HOA board is better off delegating their tasks on managing small condominium associations to the experts. Nonetheless, looking at other options will do no harm.
4. Dedicating Enough Time to Managing the HOA
When HOAs are smaller, it means they may have fewer board members. If they do, their board members might not have unlimited time to deal with pressing issues within the community.
Maintaining a balance between the board member’s schedules and the community’s needs can become a great challenge. Smaller condominium associations that can afford to outsource some services will be at a great advantage when it comes to providing efficient services to their residents.
This way, board members can dedicate their limited time to voting issues, elections, or community building, which will provide an ideal complement to collaborating with an external HOA management company.
5. Balancing Which HOA Services Can Be Offered with Smaller Budgets
One of the greatest difficulties that a smaller association can face is what they can offer to their residents. There has to be a realistic discussion amongst board members about what they can afford to provide to their residents without having too many additional fees to their residents.
Balancing this issue is far from simple, and it is a substantial hurdle for a smaller association to face that does not have a lot of member dues to utilize to its advantage. It’s one of the challenges of managing small condominium associations.
6. Knowing When to Spend Resources
Certain issues may come up for a smaller association that has to be paid for. Smaller associations can tend to avoid paying for necessary repairs. What HOA boards need to do is assess the risk of the expense growing into a more substantial one in the future. Failure to do so could be greatly damaging to the already limited finances of the HOA.
7. Maintaining Realistic Expectations for Resident Volunteers
Depending on the nature of the smaller condominium association, certain residents can volunteer their time to help the HOA save capital or lower expected member dues. HOA boards need to have a balance between utilizing a resident’s time for much-needed assistance and not wasting their time. HOAs also need to look at which community members they can rely on for particular assistance to utilize the resources that are available to their community efficiently.
8. Repairs May Cost the Same as a Larger Building
What particularly smaller condominium associations have to face is that a three-floor building may have the same roof as a ten-floor building. This means that if a roof needs to be replaced, the building with ten floors will have more capital to pay for the repair whereas the building with three floors may barely be able to afford the necessary expenses.
Smaller condominiums have to be careful to budget for these necessary larger expenses that may arise from time-to-time so that they can cover the required cost before the expense continues to grow exponentially. Managing small condominium associations doesn’t always mean small repair costs.
Managing Small Condominium Associations Is No Small Feat
Every community is different, which also means that there is no one way to manage a community. In the case of managing small condominium associations, there will be adjustments made by the HOA board or the HOA management company. It can be challenging, but as long as you stay aware of your community’s needs and work with the board members and residents, you will have a successful community within reach.