Hiring an HOA management company is one of the easiest ways to lighten the board’s workload. Board members are volunteers, so they don’t always have the time or experience to handle community management alone. Professional support can make a world of difference.
What are the Benefits of Hiring an HOA Management Company?
The benefits of hiring an HOA management company include professional expertise, less work for board members, better financial management, consistent rule enforcement, access to qualified vendors, improved communication, and reduced risk.
Let’s discuss these below.
1. Professional Expertise
Board members come from different backgrounds, and they don’t always have experience with community management. A professional management company can bring knowledge and expertise to the table.
Managers tend to be more familiar with the various aspects of running an association. This includes financial management, rule enforcement, and vendor coordination. They can guide board members through tricky situations and help them make more informed decisions.
2. Less Work for Board Members
Serving on the board demands a significant time commitment and resources. Board members often have their own jobs, families, and responsibilities to deal with.
An HOA management company can take over most of the administrative and operational tasks. This can give board members more time to focus on important decisions. They can spend fewer hours on drafting and sending notices, scheduling maintenance, and answering owner inquiries.
3. Better Financial Management
Financial management is one of the most important (yet difficult) responsibilities of the HOA board. Most volunteer directors don’t have financial training or an accounting background.
A management company can assist with budgeting, bookkeeping, dues collection, financial reporting, and reserve management. With a professional behind the wheel, board members can receive more accurate financial information, which helps them make better decisions.
4. Consistent Rule Enforcement
Many board members have trouble enforcing the rules against their neighbors, fearing it will destroy their personal relationship with them. A professional manager can minimize the awkwardness by taking over the enforcement process. They can send notices, schedule hearings, and impose penalties as necessary.
Moreover, an HOA manager can enforce the rules fairly and consistently. This can reduce the risk of selective enforcement claims or accusations of favoritism.
5. Access to Qualified Vendors
Board members must hire qualified vendors to perform services around the community. Management companies not only maintain networks of pre-screened vendors, but they can also help obtain bids, compare proposals, verify credentials, and monitor performance.
6. Improved Communication
One of the board’s responsibilities is to maintain open communication with residents. When owners have questions, they expect the board to respond in a timely manner.
Unfortunately, board members aren’t available 24/7, but an HOA management company is. Many companies offer round-the-clock support, including assistance in urgent situations. Even when it’s not an emergency, an HOA manager can field routine questions and provide updates to residents when needed.
7. Reduced Risk
Associations must comply with federal, state, and local laws, along with their governing documents. Failure to follow these requirements can expose the HOA to disputes and legal liability.
An experienced manager can help the board navigate these legal requirements and minimize risk. They can also connect the board with an experienced HOA attorney or any other third-party professional if necessary.
What Does an HOA Management Company Do?
Exact HOA management company responsibilities depend on the community and the management contract, but they typically include handling administrative work, managing finances, coordinating maintenance and repairs, assisting with rule enforcement, and providing general support to the board.
It is important to note that these services are not fixed. Management companies aren’t created equal, and what some may offer, others might not. Moreover, it will depend on the package that the HOA avails. Full-service management is more comprehensive than remote or financial-only management.
1. Handles Administrative Work
Administrative work includes responding to owner concerns, sending notices, maintaining records, and preparing for meetings. These tend to take up a lot of the board’s time, and handing the tasks over to a manager can significantly reduce workload and prevent burnout.
2. Manages Finances
An HOA management company can collect dues, pay vendor invoices, and prepare financial reports. Managers can also help the board plan the annual budget and ensure spending remains on track.
Additionally, a manager can help track delinquencies and enforce collection policies. If the HOA is required to fund reserves and conduct a reserve study, a manager can assist with those, too. Keep in mind that several states are required to maintain a reserve fund, including Delaware (Section 81-315), Florida (Section 720.303), and Nevada (Section 116.3115).
3. Coordinates Maintenance and Repairs
One of the HOA board’s primary duties is to maintain common areas and elements. This can be particularly stressful, especially in large communities or neighborhoods with complex amenities.
An HOA management company can ensure proper maintenance by scheduling work and coordinating with vendors. If repairs are necessary, a manager can help select the right vendor or negotiate with an existing one to perform them.
4. Assists With Rule Enforcement
Managers can help enforce the association’s rules according to state laws and the governing documents. They may perform inspections, document violations, send notices, track deadlines, and schedule hearings when required.
5. Supports the Board
Professional management companies are there to provide aid to the HOA board. They support directors in carrying out their duties and offer valuable insights that help them make better decisions. That said, the final authority still rests with the board.
How to Hire an HOA Management Company
While exact steps can vary, hiring an HOA management company generally involves identifying the community’s needs, researching candidates, requesting proposals, interviewing prospects, and reviewing the contract before signing. Let’s discuss these steps below.
1. Identify the Community’s Needs
First, the HOA board must determine what type of help the association needs. Some communities only require assistance with financial management, which means they will benefit from a financial-only setup. Meanwhile, others require the full-service approach, complete with on-site support from a qualified manager.
2. Research Management Companies
Next, board members can start looking for management companies that serve their area. It’s a good idea to hire a local company with experience managing similar communities. When researching candidates, the board should check qualifications and professional credentials, too.
3. Request Proposals
Once the board has a shortlist, the next step is to request proposals from these companies. An RFP should detail the scope of services, management fees, additional charges, contract terms, and termination clauses. The HOA board should then compare these proposals to narrow down their options.
4. Interview Candidates
An interview helps the board get to know their potential manager better. Before making a decision, board members should ask pertinent questions concerning communication, emergency response, and financial practices, among other topics. It is important to be compatible both in service and in work ethics.
5. Review the Contract
The final step before signing is to review the management contract. This contract must clearly lay out the terms of the agreement, including the company’s responsibilities, fees, insurance requirements, contract durations, renewal clauses, and termination procedures. Board members should ask an attorney to examine the contract to ensure it’s fair.
Does Hiring an HOA Management Company Mean the Board Loses Control?
Hiring an HOA management company does not mean the board gives up control over the association and its operations. It only means that the HOA board is getting professional support from an experienced and qualified firm.
Board members still retain final decision-making power. An HOA manager doesn’t get a seat on the board, nor do they have unilateral authority. They don’t get to decide which vendor to hire, how much to collect in dues, or which projects get priority. Those choices are reserved for the HOA board.
Good for the HOA
The advantages of hiring an HOA management company are wide-ranging. Board members can look forward to a reduced workload while gaining access to a wealth of knowledge, resources, and qualified professionals. Most communities consider it a worthwhile investment.
Are you looking for a trusted partner in HOA or condo management? Westward360 serves communities across the United States. Get started on more effective management by contacting us online or requesting a proposal!
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