A self managed HOA handles all community operations without the help of a professional management company. While this setup can save money and give the board more direct control, it also comes with added responsibilities.
What is a Self Managed HOA?
A self managed HOA is an association that doesn’t rely on professional management, instead being run solely by volunteer board members.
It takes a lot to keep an HOA community running. The job involves enforcing the rules, collecting dues, hiring vendors, scheduling maintenance, and complying with legal requirements. All of this usually falls on the shoulders of the HOA board.
A self managed board does everything alone, without professional assistance. Board members send notices, communicate with residents, plan the budget, and liaise with vendors.
In contrast, a professionally managed association has help from an HOA management company. This company assumes most of the day-to-day work, including administrative, financial, and operational tasks.
Common Problems of a Self Managed Homeowners Association
There is nothing inherently wrong with being a self managed HOA, but it does come with more problems, such as inadequate time, lack of expertise, poor communication, awkward or inconsistent enforcement, and burnout. Let’s tackle each one below.
1. Inadequate Time
Board members must dedicate a huge chunk of their free time to the association. These are volunteers, so they have professional and personal lives to juggle alongside their board duties. Sometimes, directors end up spending 10 to 15 hours a week managing association tasks.
This may not be feasible in the long term. Community management can be very demanding, and board members may not be able to keep up with fast-paced operations. Soon enough, maintenance gets delayed, vendors go unpaid, and property values start to plummet.
2. Lack of Expertise
There are several laws and accounting standards that regulate associations. Boards must understand legal requirements, meet tax deadlines, and renew their insurance policies. They must also practice proper bookkeeping, smart budgeting, and timely collection of dues.
Unfortunately, many volunteer leaders are simply unaware of these requirements or don’t know how to meet them. Noncompliance can lead to errors, liability, and even monetary penalties. Even the smallest of mistakes can have both legal and financial consequences.
3. Poor Communication
Self managed boards may also struggle with communication. They may fail to send out meeting notices on time, forget quorum requirements, or leave owner inquiries answered. Before long, complaints are bound to accumulate.
4. Awkward or Inconsistent Enforcement
Board members are responsible for enforcing the rules, but they typically must enforce them against their own neighbors. These are people they pass daily, have dinner with, or have known their entire lives, so it can be difficult to penalize them.
This can lead to awkward or inconsistent enforcement, which, in turn, can create tension or friction within the community. Some residents may even claim favoritism or bias when a board member inadvertently overlooks a friend’s violation.
5. Burnout
Self managed HOA boards must carry out their responsibilities alone. The heavy workload can result in burnout among volunteer leaders, prompting them to resign or refuse to run again. It can even lead to a difficulty in recruiting new volunteers.
Are There Benefits to Self Managed HOAs?
While there are several downsides to self management, it can also have its advantages, such as cost savings, direct control, and community engagement. Let’s discuss these below.
1. Cost Savings
Professional management isn’t free. Associations must pay monthly management fees, in addition to other agreed-upon charges. By choosing to self managed, an HOA board can save thousands of dollars in management fees every year. This, in turn, can lower regular dues.
That said, the mistakes a self managed board makes can end up costing the association more in the long run. Constantly forgetting to schedule routine maintenance, for instance, can lead to early deterioration and compromise an HOA’s reserve plan.
Besides, most companies nowadays offer several tiers or levels of service. An HOA that doesn’t require full-service management can opt for remote support or financial-only management. Some companies even offer their solutions a la carte.
More options equal more flexibility in pricing. Still, the bottom line is that the benefits outweigh the financial costs.
2. Direct Control
A self-managed board can make quick decisions without waiting for a third-party manager. This gives board members more direct control over operations, but it also means having to do everything themselves.
That said, there’s a common myth that surrounds HOA management companies and control. Even if an HOA hires professional help, the board doesn’t lose its authority. In fact, the board can delegate most of the administrative work to a manager and, instead, focus on policy-setting and decision-making.
The role of an HOA manager is to support the board. They do not become part of the board or serve the community in a decision-making capacity.
Even if self management allows for quicker decisions, the extra wait that comes with an HOA manager is often worth it. The manager can make sure they perform due diligence and consider the options carefully before making a choice. Board members wait a little longer in exchange for better guidance and smoother operations.
3. Community Engagement
Directors are members of the community, too. By being hands-on in operations and governance, they can work more closely together with their neighbors. This leads to a closer and more transparent local environment.
That said, professional management itself doesn’t bring down engagement. In fact, a manager can improve owner participation by organizing and attending community events.
On-site managers tend to be more present as well, joining meetings and conducting inspections around the neighborhood. They communicate directly with residents and get to know them beyond a superficial level.
Is a Self Managed HOA Sustainable?
It is certainly possible to self-manage a community, but most boards recognize that it can become difficult as the community grows or the workload increases.
Self-management may suit communities with few or no amenities, or only a few owners. Self-managing a small HOA doesn’t come with as many duties and responsibilities for the board.
That said, self management isn’t generally sustainable for large or complex communities, especially in the long term. These communities usually house hundreds, if not thousands, of people, and manage countless amenities. This equates to more demanding financial and maintenance obligations.
Even smaller associations may turn to professional management for more streamlined operations, professional governance, and smarter decision-making. Still, a large community may be able to pull off self management if it consistently elects experienced and committed volunteers.
Not for Everyone
A self-managed HOA can work well depending on the circumstances, especially for smaller communities with experienced and dedicated board members. Still, handling everything without professional support can become overwhelming. Boards should weigh the pros and cons before deciding if it makes sense for them in the long run.
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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