Homeowner Association (HOA) board members follow through on many responsibilities that ensure the continued efficient operation of a condominium community. This volunteer position carries much weight, and at times performing these duties is daunting, time-consuming, and for some, overwhelming. To alleviate the stress and strain on board members, an HOA may hire a professional management company to shoulder a portion or all day-to-day operations.
How HOA’s Usually Work
HOA’s elect board members to enforce the rules, regulations, and codes of conduct within the community. Board members are delegated essential roles and work on behalf of the owners, responsible for the decisions made regarding the condominium and enforcement of the rules. The condo board verifies that the HOA complies with all necessary legal requirements and ensures daily operations run smoothly.
Depending on the community, responsibility for overseeing daily operations may include upkeep of all common areas, building and grounds maintenance, by-law enforcement, liaison with homeowners, safety and security, fines and fees collection and administrative duties including financial reports and transactions, and human resources.
Why Hire an HOA Management Company?
Hiring a reputable and qualified management company to manage your HOA can alleviate the day-to-day demands of running a condominium and allows board members to concentrate on making the big decisions such as changes to policy and building improvements.
The board has the final word when making any decisions, and the management company fulfills its mandate. Management assists the board in realizing the goals of the HOA, and like an arranged marriage, condo boards need to find the right fit.
What Management Company Is Right for You?
The perfect fit may be impossible. However, there are a lot of excellent HOA management companies that will understand the HOA’s needs and know exactly how to return the desired results. Each HOA management company selected as a candidate will offer something that gives them a different edge. HOA boards need to spend time to research their options and eventually narrow prospective candidates to a shortlist.
Performing Due Diligence
The board must work out a detailed budget. From that, determine what type of commitment and time is required from a HOA management company, keeping in mind that management companies may have more than one client. Due diligence takes time but can lead to a more organized HOA if you hire the right management company for you.
Interviewing and Hiring
Once the board has determined what they are looking for in a HOA management company, and has figured out their budget, it is time to start interviewing potential candidates.
There needs to be a comprehensive list of questions that help you gain insight into the HOA management company’s methods for fulfilling the requirements the board has determined:
- how will each HOA management company resolve conflicts?
- how will they handle emergencies after hours?
- what is their availability during the day, after hours, weekends, and holidays?
- how responsive are they?
- what and how do they charge for their services?
Attributes in a HOA management company to look for:
- attention to detail
- level and range of experience
- flexibility to work alongside the HOA in its planned goals
Ask for references and investigate the certifications the potential HOA management company holds. Recommendations from other condo associations can give valuable insight. Researching social media sites such as LinkedIn may lead to third-party referrals and testimonials.
Communication is Key
One of the hallmarks of an excellent HOA management company is its ability to share open communication with the board and homeowners, an essential key to success. Accurate disclosure and presentation of finances, reports, policy changes, and amended condo laws are vital for the condo community to operate smoothly. All parties need to remain unbiased in their feedback. HOA management companies are there to mediate promptly should any disputes arise.
Signing the Contract
Make sure that the contract you sign and agree to with your chosen HOA management company clearly states the HOA terms and expectations. As this is a legally binding document, have the HOA’s lawyer review it before the official signing, and ensure that you include a termination clause. If the HOA management company does not turn out to be the right fit, the board will want to release them with as little impact and fuss as possible.
How to Avoid Making a Big Mistake
There are pitfalls to watch out for when hiring a HOA management company. It is essential to watch out for these potential crisis creators during your interview and reference process:
- Not keeping HOAs up to date on changes to federal and state laws
- Delayed response to homeowner complaints and repairs
- Lack of skilled bookkeeping and inaccurate reporting
- Hiring sub-par or unlicensed vendors such as plumbers and electricians
- Poor communication between managers and HOA board members
The incoming management team should receive a detailed orientation from board members on how their HOA operates to help achieve short- and long-term goals.
Like an arranged marriage, finding the right management company takes time, introspection, communication, and a lot of due diligence. Condo boards must plan out their requirements and determine which responsibilities they need the HOA management company to assume. With this objective, the HOA can more easily identify a company that will fit in with the culture of the community and has the right expertise to fulfill the management role.