Association Management Options
No matter the size of a homeowners association, from ten single family homes to a thousand condominiums, there is a management option to suit its needs.
When a community is self-managed, the board of directors is responsible for every task in the operation of the HOA. They arrange maintenance and vendor contracts, issue violations, collect dues and pay bills, and everything else. Except for small associations with single family homes and no amenities, self-management can be difficult due to the amount of work involved. Association management can be a full-time job and for volunteer board members with jobs of their own, it isn’t always a priority. Board members should understand the task before they are elected, and be committed once they are.
When a board of directors can effectively manage most aspects of an association but struggles with financials, they will often hire a bookkeeper or accounting-only management firm. Both will be able to handle finances, though a management firm will have HOA experience and may be contracted to assist in other situations if needed.
For communities who do not need an on-site property manager but still require administrative assistance, a remote management firm can be a solid option. A remote management firm can take on many of the same responsibilities as a full-service management company, such as assessment billing and coordinating vendors, but they do so from another city or state. The board or directors will need to meet vendors and others on site, but the community will have the advisement of a professional yet save money.
Full-service association management is usually the best option for single family communities with major amenities and for condominium and townhome associations of all sizes. A professional property management company has the resources and experience to effectively handle the day to day operations of a community association. This allows the board of directors to retain control of all decisions, but alleviates much of the stress. A property manager coordinates projects and bids of all types, reporting to the board and keeping them aware of progress. Many professional management plans also include accounting, covenant enforcement, record storage and document preparation, and mailing and legal services. These plans are often custom and flexible, allowing the association to only pay for the services it selects and uses. Though the most expensive option, professional management can also be more cost effective long term. Professional management companies are bonded and insured, and usually able to secure better contracts with vendors.
Consultation firms can be hired on an as needed basis, making consulting a solution somewhere between self-management and full-service management. Consultants can assist with a wide variety of situations from helping the board rehabilitate the community to make it self-sufficient again, or by merely offering advice in difficult situations. Fees for consulting services are high and often by the hour, but it can be worth it for some associations.
Boards of directors should do copious research before selecting a management option for their community as the decision will not only affect the community now, but also its future. Once an option is selected, research into possible firms should be done as well to ensure the best fit for the association is found.