BlogOrganizational Management HOA Management Companies: What Do They Do and Does Your HOA Need One? Organizational Management HOA Management Companies: What Do They Do and Does Your HOA Need One? Author: Sayana Izmailova March 15, 2022 Contents 🕑 6 min read If you’re on the board of a Homeowners’ Association (HOA), you know first-hand how much time and effort it requires. Chances are, you signed up for the role because you wanted to make a real difference in your community, but all you find yourself doing is chasing down member fees and processing maintenance requests. No matter the size of your HOA, managing it is a full-time job. Considering that you and your fellow board members are there on a volunteer basis, you can’t be expected to take care of it all. The good news is, you can outsource most of the work to a third-party HOA management company. Read on to learn everything you need to know about what they do, how to find one and whether or not it’s the right option for your HOA. We’ll also briefly cover a worthwhile alternative —HOA management software — which would allow you to remain a self-managed HOA, but take most of the tedious, time-consuming administrative tasks off your plate. What Is an HOA Management Company? An HOA management company can help your board by taking on some (or most) of its day-to-day responsibilities. Unlike volunteer board members, HOA management staff work on a full-time basis. That mean that helping your association is their main focus and they have the time and resources to do the job well. Management companies also have extensive expertise in running an HOA. They’re well versed in the financial side of things, can offer legal advice and have established relationships with the best vendors in your area. Let’s take a look at what exactly a management company can do for your HOA. What Does an HOA Management Company Do? The duties of an HOA management company are flexible — they’ll depend largely on what your board is willing to keep doing and what you’d like to offload. This is a conversation you’ll have with the company when you’re bringing one on. That being said, here’s everything that most HOA management companies can help you with: Managing the HOA’s budget, bookkeeping, and preparing financial reports Collecting member fees, issuing notices, tracking down payments, and charging late fees Processing maintenance requests from members Maintaining common areas (e.g. pools, playgrounds, tennis courts, etc.) Arranging for things like snow removal, garbage collection, lawn mowing, etc. Managing relationships with vendors Offering guidance to the board on financial, insurance-related, and legal matters Managing large-scale projects (e.g. installing a new community playground) Enforcing rules and regulations established by the board Managing the administrative tasks of the board (e.g. booking meetings, sending out agendas, etc.) Communicating with members Resolving member conflicts HOA Board vs. Management Company: Who Does What? An HOA management company can take a lot of work off your board’s to-do list, but at the end of the day, you’re the ones in charge. Ultimately, some responsibilities should always remain with you. When you work with a management company, the lines between who does what can sometimes get blurry. This is why it’s important to clearly define responsibilities at the onset of your relationship with a management company and maintain open communication about any changes. We’ve already gone over what a management company can help you do. Now, let’s take a look at some areas where you and your fellow board members should maintain authority: Setting the annual budget Maintaining a reserve fund (a saving’s account for large projects and expenses) Approving all expenses Reviewing and approving maintenance requests Hiring vendors (or approving hiring decisions made by the management company) Setting member fees, late fees, and payment schedules Creating policies, rules, and regulations Initiating financial audits Is It Time To Bring On a Management Company? Not every HOA needs the help of a management company — many are completely self-managed, and their board members have the bandwidth to take care of everything on their own. However, some HOAs choose to hire a management company and see great results — their operations run a lot more smoothly, their board members are much happier, and so are their residents. Here are a few signs that it may be time to outsource some of your responsibilities and bring on an HOA management company: You don’t have anyone on your board who is well versed in finances, insurance, or legal matters You need help enforcing the policies, rules, and regulations you’ve set You spend a lot of time chancing down members and making sure they are paying their fees You’re not sure where to find quality vendors Your HOA members are expressing concerns or dissatisfaction about processes and systems Your fellow board members feel overworked, overwhelmed, and burnt out How Much Do HOA Management Companies Charge? You’ll most likely pay a monthly fee to your HOA management company. Some companies charge a flat fee that’s directly tied to the number of units in your HOA. On average, expect to pay $10-$60 per unit every month. Other companies charge a percentage of the member fee. For example, if your member fee is $500/month, the HOA management company may take 10% of that — $50. In either case, the more units you have in your HOA, the more you can expect to pay. How Do I Find an HOA Management Company? For obvious reasons, your HOA management company should be located in close proximity to your community. To find one, you can conduct a simple Google search, making sure to include your city and neighborhood. Alternatively, you can use a tool likeHOA ManagementorAll Property Managementto browse a list of companies in your area. Whichever route you take, make sure you don’t settle for the first HOA management company you come across. HOA boards typically reach out to a few companies, request proposals, and interview their top candidates. A lot of factors should go into choosing the right management company, so be sure to take your time and make your decision carefully. What Are Common Problems With HOA Management Companies? We’ve gone over the benefits of hiring an HOA management company — it can offer a tremendous amount of help and make running your HOA a lot less stressful. But are there any downsides? The honest truth is that not every board enjoys working with their management company. This, of course, depends on the company you end up choosing and the kind of relationship you establish with them. Here are a few common problems that HOA boards experience: Poor communication: they don’t keep you in the loop and are hard to get a hold of. Underwhelming vendors: they opt for the most affordable/convenient options, rather than building up relationships with the best vendors in the business. Incomplete projects: they take too long to address requests from you or the residents; some projects drag on for months. Lack of organization: compliance checks aren’t being done; late fee notices are sent to the wrong homes. Maintenance issues: common areas aren’t maintained; recurring tasks aren’t happening regularly. High community manager turnover: a community manager is the liaison between your board and the management company — when this person gets replaced too often, it’s hard to build up an effective relationship with them. When things don’t go as smoothly as you had hoped, it’s perfectly normal to bring up these issues with your management company, start shopping around for a new one, or consider other alternatives. Management Company Alternative: Try HOA Management Software An HOA management company is the perfect solution for some HOAs but not all. Maybe you can’t afford hiring a management company, or maybe you aren’t looking to offload enough of your responsibilities to justify paying for one. Some HOA boards are perfectly happy to keep self-managing — they just need a little help staying organized and working a bit more efficiently. This is where HOA management software comes in. The right tool can automate most of your administrative tasks and save you hours upon hours of manual work. The result is happier board members and more time to do what you actually set out to do: create a thriving community of homeowners. HOA management software can help you: Maintain a member database Provide your residents with easy and secure ways to make payments and submit maintenance requests online Communicate with residents via automated emails and newsletters Build a custom HOA website where you can share news, notices, resources, and events Prepare financial reports And much more Try HOA Management Software For Free Here at WildApricot, we’re proud to offer an all-in-one solution used by hundreds of homeowners’ associations. It crosses every single item on the above list and will completely transform the way you manage your HOA. Click here to start your free trial of WildApricot now. 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