There are a lot of ways a community association can handle social and legal affairs, including the option of self-managing the community.
Before your community chooses to self-govern (either as a newly developed community or by stepping back from a management company), consider these common pitfalls of HOA or condo association self-management.
1. Reluctance to confront neighbors – Community rules and regulations must be consistently enforced, and that can be tough when you’re both Bob the Board President and Bob the Barbeque Grill Master, Beloved by All. Everything needs to be addressed in fairness to other residents. Confronting a long-time neighbor and friend about their trash cans is difficult, but necessary.
2. Trying to handle everything – Occasionally, it will be necessary to bring in experts. Unless you’re lucky enough to have a lawyer or CPA in your neighborhood (ones willing to volunteer their time), you’ll likely need to have the phone numbers for these types of experts on file. You also need to know when to call in help for maintenance as required. Volunteers may be willing to assist with pulling weeds and planting flowers, but resurfacing the tennis courts is a job for the professionals.
3. Conducting board meetings without a plan – Follow meeting procedures, i.e., Robert’s Rules of Order. Without a set plan in place, meetings are bound to get off track, and intended topics will be missed in the discussion.
4. Failure to keep up with accounting and maintenance – It may seem simple enough to work with contractors to maintain the community’s pool, tennis courts, clubhouse, landscaping, etc., but without someone monitoring the accounting and vendors, they can go unpaid. Without their services, things have a tendency to break down quickly. HOA accounting software can help to keep tabs on payments and save time.
5. Lack of understanding of laws and governing documents – HOA board members must be educated on the covenants and bylaws of the community, as well as, Federal, State, and Local laws. It’s more expensive to be out of compliance and paying penalties, than investing in the education up front.
6. Failure to protect the association – Self-managed communities must enact controls and standard operating procedures to protect the HOA’s assets. Seek professional advice on the insurance and bonds necessary to safeguard your organization.
7. Lack of volunteers — One of the most common dilemmas faced by self-managed HOAs is the need for volunteers. Neighbors are often quick to hop on the bandwagon when they think about potential savings by ditching the management company. However, enlisting volunteers is often challenging. Ensure you make volunteering rewarding by saying thank you, having an appreciation day, and reinforcing the idea behind the importance of volunteers in a self-managed community.
The decision to leave your property management company in favor of a self management solution HOA is a big one.
Think through the pitfalls of self-managing an HOA. If you have willing and able volunteers plus access to outside help, such as a CPA and a lawyer, going the self-managed route may be right for your community.
There are definite perks for your community, but they don’t come without some costs. You may save money but lose some personal time due to volunteering. You may lose money because you have to hire professionals to support your accounting and legal needs.
As long as you have honest discussions with neighbors and the community commits to supporting the self-managed HOA initiative, you can see cost savings, have more control over your community, and even build relationships with members of the community you may have otherwise never gotten to know. Don’t forget to make the day to day management of your community a bit easier by selecting the right web based self-managed HOA software, too.
