14 Sep What is a Homeowners Association (HOA), and why do you need professional management
Often high-rise and single-family living communities are part of homeowner’s associations (known as HOA’s) to help them maintain the common areas, community assets, amenities, services, utility management, and community finances. These HOA Boards consist of elected members who volunteer to serve and are most often professionals serving the local community. Communities with HOA’s are usually called planned developments. Planned developments have many benefits, like shared amenities and services, that all generations have come to love and seek out to maintain their lifestyles. Communities can provide and maintain a certain standard of living through rules and regulations that govern the community. Potential residents are encouraged to fully understand what their HOA manages so they can weigh the positives and negatives before buying.
Because the HOA board makes important decisions for the homeowners and must be available to pivot with legislative changes and residential needs, many HOA’s will contract with professional management companies.
There are a variety of reasons why this could be an impactful decision for your HOA.
The following seven points are typical discussions we have with potential clients and encompass why your HOA board should consider professional management.
- We have access to a network of services and professionals.
Professional Management Companies spend time building their networks. More importantly, we have people and systems that serve as Human Resources and Administration professionals to ensure that the service providers deployed to your property are adequately vetted, insured, and match your unique needs. Tapping into our network can save you time and wasted dollars in mistakes and bad hires. We take on the challenges associated with payroll and benefits administration. You no longer have to worry about recruiting, performance reviews, compliance, and all other aspects of personnel management. Standardized administrative processes and procedures keep things organized and efficient from mailings, meeting preparation, resale, and status letters. It is also quite common for HOAs to fail to comply with state, federal, and local laws; property management companies can offer due-diligence that you may not complete due to discontent, time, or lack of decisions.
- Property management is our full-time profession.
While HOA board members bring expertise in their given fields, they also typically have full-time jobs and other interests. This time constraint can create situations with delayed decisions or discussions moved to the next meeting. If those decisions happen to be problems in the property itself, even a month’s delay can significantly worsen the issue. Working with a management company allows you to tap into us for your association’s day-to-day operations. The right company will have a proven history of expertise in condominium, high-rise, and master-planned communities, combined with a highly trained team, giving greater flexibility in developing specialized service for your association.
- We bring financial acumen, specialized services, and can lean on years of expertise.
The right professional management company will have a world-class accounting department. We highly recommend looking for companies like Worth Ross to provide dedicated property accountants to ensure fiscal responsibility and complete accessibility. Additionally, the right company should give tailored and specialized reporting that meets your community’s individual needs. It’s essential to delve into your unique needs as part of the discovery process when considering a management company. With COVID-19, associations have found new requirements that property management companies should be able to meet. Pandemic plans, communication, prevention guidelines, and local regulations become specialization areas within property management companies. Because this is our business, we have already established resources to deal with the changing requirements caused by COVID-19.
- We hold designations that ensure their expertise like the Accredited Association Management Company (AAMC) designation.
Accreditations prove a company’s commitment to providing the highest level of service that community associations deserve. By maintaining this designation, the property management team has the required experience, education, and integrity to guide and advise managed communities expertly. It’s essential to look into the organization giving the accreditation and check ratings and relevance to your needs.
- We understand association documents.
It’s essential to look for a team that can quickly and efficiently navigate your association documents to provide recommendations and point out areas of concern. Having a standardized process for compliance tracking and enforcement makes it easy for Association Boards to stay informed. It’s prevalent to run into board members who have never taken the time to read their documents. Additionally, the right property management company will be an excellent resource for new board members.
- We are experts in risk management.
Risk management is a serious topic for association boards. From policy review to property inspection or hands-on assistance in navigating a claim, you can take advantage of in-house licensed insurance adjusters with the right management company. This service provides not just peace of mind but frees up time spent finding the right people, and potentially dollars spent on that service alone. The right property management company will be well versed in avoiding, controlling, and transferring risk.
- We will have difficult conversations.
While all board members come to the table with the best intentions in mind, volunteers are impacted by personal relationships, regardless of the amount of due diligence done during the board’s selection. That can create resistance to have difficult conversations. Scenarios often arise when suggestions, or selecting a vendor or resolving a problem are made by a specific board member, or even by the owner(s). When things don’t work out, other board members may be hesitant to suggest another decision. In some cases, that hesitation can cause the problems to worsen. By the time the discussion does take place, the solution is more complicated. To keep a property in the best condition at all times, communication is essential.
- We provide you with best in class technology.
Let’s face it; we live in a time when technology should make your jobs easier. Current technologies provide resident portals where owners can view records, account history, and more. These web-based accounts payable solutions offer clarity and transparency on invoicing. With the right property management company, you should also receive automatic access to robust vendor management programs that ensure vendors have adequate insurance and licensure before ever stepping foot on the property.
Whether you are a self-managed HOA board or have worked with the wrong management company in the past, you could benefit from the right management company’s expertise. Self-managed HOA boards run the risk of managers or board members leaving abruptly. This loss often results in unanswered questions, overdue notices, building issues, and in the worst cases, missing funds. Likewise, experience with the wrong property management company should not sour you from moving forward with your discovery. The right partner will complete a needs-based audit to prioritize your challenges. We often start with ensuring that the financial health of your HOA is robust and that it funds the day-to-day operations of the property, as well as the general maintenance repairs and capital improvement projects.
Property rehab is often high on the list in the case of associations managing older buildings. This need is becoming even more of a priority as owners spend more time on the property during COVID-19. As the public health emergency unfolded, property owners and HOA boards began to realize the need to protect themselves from liability and the spread of COVID-19. Some buildings were essentially stuck amid capital improvements when COVID began. This created new project management situations, difficult for buildings without expertise in those areas. During any capital improvement process, the manager, lead of maintenance, and your board should work in tandem with the property management company to ensure that all the improvements are per the bylaws of the HOA. A dependable property management company will also ensure that your budgets are managed, and the scope of work is precisely followed. The experience of COVID-19 has proven that this is needed now more than ever.
If you are on the board or managing an HOA within a planned or mixed-use facility, working with a management company that has expertise in unique projects should be one of your discovery questions. Navigating the relationship between the master and sub-associations is no easy task. If you rely on a manager or a board to navigate, you may end up with unresolved issues that lead to even more significant problems down the road. It is crucial to understand how to effectively address issues like this when they occur in a master-planned and mixed-use HOA. It would be best if you had the experience and technical savvy to navigate unique challenges through to resolution.
Most self-managing boards run into common problems when it comes to lack of volunteers and time. It’s important to remember that your volunteers are unpaid and have other commitments. Even for the most dedicated boards, this becomes a significant factor. There are also fundamental human issues that arise with favoritism, differential treatment, and the inability to make final decisions. Likewise, HOA boards relying on an individual manager, rather than a team, can run into problems with experience, failure to handle growth, and lack of technical expertise. More extensive, complex situations can be almost impossible for an individual property manager to take. Much like relying on volunteers, even the most efficient property managers are pulled in many directions.
In conclusion, you will want to list why you are considering a property management company, and use the list above to ask the right questions of any potential partner. If you are considering an individual manager versus a management company, ask them the same questions. The best questions should be based on your current situation(s). Spell out the problems you are facing and listen for the right responses. Lastly, ask for references, testimonials, and case studies. The right decision will be worth the time and effort. It’s an investment that can provide an incredible ROI for everyone involved.
If you’re interested in a discovery call with us, we’d love to meet you. Contact us at 214-522-1943 to get started.