More than 74 million U.S. residents live in an HOA community. But, only 2.5 million serve as an HOA board or committee member. This can put a lot of pressure and responsibility on those who serve their community. If you are part of an HOA community, it may be time to look at hiring an HOA management company.
What is an HOA Management Company?
An HOA (Homeowners Association) management company acts as an advisor to an HOA community.
Each HOA has its own rules and restrictions that are agreed upon by all those who live in the neighborhood. Typically, these rules help ensure the neighborhood maintains its appeal and property values while keeping the area safe for residents.
HOA management companies assist with ensuring all residents follow the rules of the HOA which generally include:
- Yard and property maintenance
- Garbage and junk collection
- Decor rules (house color, holiday decor)
HOA management companies are similar to property management companies, though they are also distinct in that they don’t directly collect rent payments from residents (they do collect small fees from their communities).
Property management companies manage 60% to 70% of all HOAs.
What Does an HOA Management Company Do?
HOA management companies can tackle a variety of different services, such as:
- Performing groundskeeping work, like shoveling snow and blowing leaves
- Maintaining communal facilities, like shared gymnasiums or pools
- Repairing in-unit items or appliances, like dishwashers
- Collecting HOA fees/dues from residents and chasing down the delinquent payments
- Sending notices to residents
- Enforcing community rules and guidelines, especially regarding house maintenance and yard appearance
- Performing accounting and bookkeeping work for homeowners associations
- Performing administrative work for homeowners associations, like taking minutes or attending board meetings
- Helping HOAs develop and plan community events
- Patrolling homeowners association communities
- Alerting residents to security risks
In other words, homeowners association management companies do a lot of the work normally assigned to homeowners associations themselves. Homeowners association boards can outsource this labor to dedicated companies in exchange for fees.
What is a Self-Managed HOA?
A self-managed homeowners association or DIY HOA is a homeowners association community run entirely by its members.
Such homeowners associations usually have elected boards or governing councils made up of residents. These boards then set standards for the community that everyone has to abide by, such as home decoration rules, lawn rules, and more.
Self-managed homeowners associations clean up their litter, patrol their streets, and tackle any requests that might be made by residents. Furthermore, self-managed homeowners associations are responsible for collecting dues from homeowners.
Essentially, self-managed HOAs do all of the hard work involved in maintaining a high-quality homeowners association without the assistance of experienced professionals. However, they may also occasionally contract with homeowners association management consultants for help with specific issues or problems.
The Advantages of Hiring an HOA Management Company
There are numerous advantages to hiring a reputable, experienced HOA management company, including:
- Experience with HOA Issues
- Prompt Responses for Resident Complaints
- Peace of Mind and Security for Community Residents
- Easier to Maintain Large HOAs
- Board Members Avoid Burnout
- Free Up Time for the Board to Focus on Specific Issues
- No Need to Take Care of Conflicts
- Legal Assistance and Expertise
- Improved HOA/Property Value
- Higher Quality of Life for Residents
- Optional Assistance with Administrative/Financial Work
1. Experience with HOA Issues
Inexperienced HOA board members may have no idea what to do when a resident refuses to follow the rules. However, an experienced HOA management organization knows exactly how to tackle this type of problem by approaching the resident and taking action as needed.
Furthermore, running an effective, welcoming homeowners association is no simple task. There are a lot of steps to keep your community looking excellent, including maintaining the grounds/common areas and responding to maintenance issues quickly.
The experience and extra resources brought about by an HOA management company can go a long way toward convincing residents of the necessity of the homeowners association and the fees that come with it. This, in turn, will help improve your community and allow it to prosper for years to come.
2. Prompt Responses for Resident Complaints
If you hire an HOA management company, you or your fellow board members don’t need to respond to complaints, especially when they are at inconvenient times.
An HOA member/resident has a heater break in the middle of the night. A management company can send maintenance personnel to tackle the issue so you (or another board member) don’t have to get out of bed.
Resident complaints between neighbors are common and can be tricky. Most HOA board members don’t want to have an uncomfortable conversation with other residents. An HOA management company will speak to both residents and find a workable solution to the issue in no time.
The happier your residents are with your HOA’s promptness and solutions, the more likely they are to pay their dues on time and to be happy that an HOA exists in the first place.
3. Peace of Mind and Security for Community Residents
If you hire an HOA management company, they will patrol your neighborhood or community regularly to look for litter, potential violations, and other issues. This also translates to security patrols; while HOA management companies don’t employ security officers, they’ll be much better equipped to notice any security problems, like suspicious characters in the neighborhood.
This can allow your HOA board to get ahead of potential security problems faster, and contact emergency authorities if needed. An HOA management company presence in your community can also lead to improved peace of mind for your residents.
If an HOA management company employee notices a dangerous wild animal in the area, they can send out an alert to the community residents so they all know to keep their pets indoors.
4. Easier to Maintain Large HOAs
Some of the largest communities practically require HOA management companies to maintain their quality and resident comfort. If your community is made up of several dozen homes spread over a large area, it might simply be more feasible to have a professional HOA management company handle everything.
An HOA management company can do most of the work required to maintain your exceptional community, like collecting HOA fees, resolving resident complaints, maintaining shared facilities or grounds by shoveling snow, and anything else. The bigger your HOA gets, the more essential an HOA management company becomes.
5. Board Members Avoid Burnout
Larger HOAs have a lot on their plates. The bigger your community, the more things you have to focus on in terms of community events, covenant rules adherence, and more. Even if you have enough HOA officers to get the job done, you might find yourself spread thin from time to time.
With an HOA management company on your side, a lot of the day-to-day work gets taken care of by another party. Your HOA management company can do things like:
- Collect fees for the association itself (plus its own fees)
- Check up on homeowners regarding rules violations
- Explain the rules to new homeowners – this is also a side benefit, as it allows your HOA community members to focus more on the pleasant elements of your association instead
Since your HOA is a volunteer organization, avoiding burnout is actually very important. Volunteering for an HOA shouldn’t feel like a full-time job. An HOA management company helps alleviate some responsibility from volunteers.
6. Free Up Time for the Board to Focus on Specific Issues
An HOA management company gives your board members the time to focus on key issues and planning.
Your HOA hosts a yearly Christmas tree lighting ceremony or 4th of July BBQ. With the management company handling each of the more serious tasks, board members can focus on party planning.
7. No Need to Take Care of Conflicts
No one wants to be the person to have to go to a neighbor’s door and explain that they are breaking a rule. An HOA management company can do that for you, meaning you don’t need to take care of any conflicts.
HOA management companies are perfect organizations to hire for:
- Telling neighbors that they need to revert or change things about their properties to stay within HOA restrictions
- Talking to HOA community members repeatedly if they refuse to adhere to rules
- Beginning eviction proceedings against problematic HOA community members who do not adhere to rules
- Following through with eviction proceedings
- Calling the police or other emergency personnel when needed
An HOA management company is the perfect neutral third party to handle situations as they arise.
No one wants to be policed by their fellow community members. Using an HOA management company to take care of these issues alleviates problems that could compromise board members’ places in their social groups.
8. Legal Assistance and Expertise
Laws regarding homeowners associations, community restrictions, and even land use change all the time. Keeping up with those laws and national and local or state regulations and restrictions can be overwhelming.
HOA management companies already know the ins and outs of community rules and legal necessities. Therefore, they can act as legal advisors for your board members.
For example, they can provide advice and counsel regarding things like:
- What to do if a problematic community member refuses to leave or needs to be evicted (such as processes, timelines, fees, etc.)
- What to do if the HOA community houses need to be adjusted as a whole
- What inspection rules and mandatory timelines are
Even if your HOA management company doesn’t know the answer to a specific issue, the company is in a better position to contact and work with legal representatives.
9. Improved HOA/Property Value
Under the watchful guidance and skilled management of an HOA community manager, your entire association will thrive.
By making your HOA better overall, you’ll improve the property value of each home within it. Good news travels fast, especially about a good neighborhood. Whenever a home sells in your community you want homeowners to be able to sell for a high price to well-qualified buyers.
In fact, according to the NAR (National Association of Realtors), 49% of homebuyers rated the quality of the neighborhood to be the largest factor influencing neighborhood choice when purchasing a new home.
If you want your HOA to thrive as a community and neighborhood, hiring an HOA management company could be just the ticket.
10. Higher Quality of Life for Residents
HOA management companies will ensure that the neighborhood looks better, has fewer problems, and that the board has the time to dedicate to real community-building efforts and events.
Happy residents tend to take better care of their property and view their neighborhood as a real community rather than just a place to live. Great neighborhoods can build lasting friendships and improve the quality of life for your residents.
11. Optional Assistance with Administrative/Financial Work
An HOA management organization can take care of the administrative and financial work for an HOA without any conflicts of interest.
A professional management company is less likely to skim money off the top or use member fees for inappropriate purposes.
Any HOA Board can vote to hire an HOA management company only for administrative and financial tasks. Outsourcing this type of work can help improve the accuracy of your books, ensure funds are used as intended, and keep social politics at bay.
The Benefits of DIY HOA Management
There are also some benefits to managing your homeowners association and community yourself, especially with the assistance of trusted volunteers and friends. These benefits include:
- Save Money for the HOA Budget
- Full Control Over Association Work and Decisions
- Direct Connection to Homeowners and (Sometimes) Better Community Cohesion
Save Money for the HOA Budget
If you run your HOA on your own, all monies will go to the community budget rather than outside sources.
HOA management companies do charge significant fees. It’s usually between $10 and $20 per unit per month.
If you have 50 houses in your homeowners association, you can expect to pay anywhere between $500 and $1,000 per month. Depending on how much you collect in terms of HOA dues.
These fees can really dip into the money you have to work with to improve your community.
If someone on the board is skilled with numbers and accounting, you can make that money work as efficiently as possible.
Full Control Over Association Work and Decisions
Handing over the reins to an HOA management company can mean handing decision-making over to them as well. If you do everything yourself, you and your community members get to decide things like:
- What events you hold
- The covenant rules and restrictions that all community members have to abide by
- What the policy is regarding HOA fee due dates
For some neighborhoods, self-direction and unhindered freedom are highly important. If that’s the case for you, consider handling all homeowners association management yourself.
Direct Connection to Homeowners and (Sometimes) Better Community Cohesion
Each HOA board is comprised mostly or entirely of members from the community. But if you introduce a third-party HOA management company into the mix, one or more of their employees may be present on the board. That introduces an outside member who doesn’t live in the neighborhood.
While that can be beneficial, it can also lead to increased community friction. Someone in the neighborhood, for instance, might wonder why someone who doesn’t live there is imposing rules on the community members.
Keeping things “in the family” might be a wiser choice if your neighborhood is already tightly knit and of a manageable size.
