Understanding HOA Management

Professional management of a Homeowners Association is a fact of life for those who live in Common Interest Developments

Over 90% of all associations in the US are managed professionally, so understanding what their mission is and how they do business will help homeowners, communicate with them and enhance their homeownership experience.

First, don’t make it personal when dealing with professional management. They have a business relationship with the HOA and therefore a business relationship with you, the homeowner. Because this is their business, it is not personal to the professional manager, at least it is not suppose to be. The manager who takes it personally, is not as effective and much tougher to deal with. Below is a general description of HOA managers, and how they operate.

Management is just another service that the HOA Board of Directors retain to conduct the business of the community. Although the service provided by management is far more significant that any other, even if it is not always the most expensive line item on the budget. The Board of Directors is basically relegating to management, all or nearly all of the administrative tasks of the community. The contract that is drawn to cover management will include the parameters of their authority, which may include, bookkeeping (including dues collection, bill payment etc), accounting for financial activity (providing periodic financial reports to the Board), Budgeting, organizing board meetings (agendas, minutes etc), meeting attendance (they provide guidance and advice at times and sometimes take the minutes), Maintenance over-site and supervision, Rules enforcement (based on a combination of the recorded deed restrictions and a list of Board created rules), and the catalyst for accumulating and disseminating information. Needless to say this is a highly skilled position and requires extensive training to understand all of the elements of community management. The HOA is a business, all be it non profit, but it is also a quasi municipality and of course a political entity. Over the last 20 years or so the complexity of HOA management has increased exponentially. All of this due to legislation created on the state and local level. In order to best represent their clients, the manager is required to keep up with these new laws to stay in compliance. Many new laws are sponsored by HOA management “Professional Organizations”, so “new laws” are a form of job security in a sense. Many of the laws are good and help protect the individual homeowners, but many are also silly bureaucratic requirements that offer little to enhance a community. Most states now have some sort of licensing or minimum training requirement for manager, and usually a continuing education requirement as well. If you have an issue with your management company or individual manager, check this area first. With that said, a good manager has more to do with his or her communications skills than a complete grasp of all of the laws.

So what is better? A small management company where the owner manages the community and may or may not have a support staff; or a large management company with multiple managers and departments covering all of the various elements of management. It really depends on whether you are a Board member or just a homeowner. When you are sitting in a Board meeting and you turn to the manager (who is part of a highly departmentalized company) for input, you may receive a response like; “I will pass that onto bookkeeping” or “Our maintenance supervisor will look into it”, or “issues regarding the CC&Rs are handled by our governing documents staff”. The management company owner/manager will likely have an immediate answer for you or at least be able to explain the process for getting the answer. This is not to say that the manager/employee, is not just as skilled, it is just more likely that they will not want to tread on co-workers turf.

The advantage for the Board and homeowners, in having a large management organization is that there is a consistently applied process for dealing with the needs of the community. You do, however give up the personal relationship that can develop with the owner/manager.

I have found that effective management is not achieved through the “black and white” application of all of the rules and applicable laws. Although, from the managers standpoint, it is simpler to just stick to the rules. For large management companies it is easier to train subordinates to make no exceptions which eliminates the need to make excuses for managers thinking outside-the-box (so to speak). An example of this is violations of the rules, often a sore point for homeowners, and one of the most common homeowner complaints. There are two approaches to non compliance with the rules; one, start the violation process with, warnings, fines, hearings etc. (which in my opinion has limited success in changing behavior) and two seek voluntary compliance (which may take a little more work communicating, but avoids creating animosity)

Most of the time a manager will reflect the attitude of the Board, which may include some very aggressive approaches to enforcement issues. The manager who embraces the aggressive approach can make your “homeowner” experience miserable. My advice is to force a change in management or vote out the board.

Because of the nature of HOA communications, most Boards are not aware of the impact their administrative style has on the community. It is intimidating for a homeowner to walk into a Board meeting and provide an honest assessment, face to face with those that are being criticized. I created hoahomepage.com to allow homeowners to anonymously Rate, Review and Rant about your community.

hoa2014

Author: hoa2014

I am the founder/owner of RA Gordon Company and I am only temporarily Moderating this community profile- Either a homeowner in the community or a person or a company that wants to help develop this community network is invited to replace me and become the Moderator. I have 30 years experience in the Management and Development of Common Interest Developments- I also provide consulting services to Board members who need help with finding and vetting service providers, community governance or operational issues. I am also available to mentor those who would like to enter the common interest development management profession.

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