What Is HOA Management?
HOA management brings residents together to work toward maintaining the value, safety, and prosperity of their homes and neighborhoods. HOA management boards collect dues, address maintenance requests, and maintain neighborhood amenities.
HOAs: A Quick History
In the 1960s and 1970s, the expansion of America's highway system fed the growth of large-scale development outside of city centers, enabling people to live in suburban residential neighborhoods and commute into the city to work. Homeowners associations (HOAs) grew to prominence during this period as residents of these neighborhoods formed HOAs to handle the maintenance and upkeep that would be handled by municipal workers if they lived in an urban area.
HOAs exist today to serve many of the communities made up of millions of Americans, and when run efficiently, they make residents happier and help to maintain property value for homeowners in managed neighborhoods.
21st Century HOA Management
HOAs have continued to evolve, and a few important core functions of HOA management have remained unchanged for decades. Everything an HOA does comes down to keeping a community running successfully. These duties include collecting dues and assessments and budgeting transparently to maintain value and quality of life in their communities. HOA management software can streamline these management tasks.
HOA Management Structure
Self-managed HOAs are run by volunteer residents. Some communities may hire an outside third-party management company, though there are notable benefits to self-management (more on this below). The details vary according to the size of the community and the complexity of its requirements.
The HOA board of directors, a group elected by residents, has the final say on community decisions. HOA board members are responsible for enforcing governing documents, protecting community assets, and making financial decisions. It’s a lot of responsibility for volunteers, so it’s important to ensure they have the resources necessary to get the job done.
The board of directors is also responsible for ensuring ethical conduct according to the Covenants, Conditions, and Restrictions (CC&Rs), Bylaws, and Articles of Incorporation.
What Are the Main Functions of HOA Management?
An HOA's chief goal is maintaining the community and bringing value to its residents. HOAs accomplish this through several key functions, one of the most important of which is collecting dues and fees from residents.
HOA dues are used for things like:
- Maintaining common areas
- Fulfilling maintenance requests
- Vetting and paying vendors
- Studies and reviews for architectural upkeep
- Monitoring and reporting community violations
- Protecting property values
- Transparent financial management
Successful HOAs facilitate a safe and secure community with clear and consistent communication between board members, homeowners, and vendors.
Self-Managed HOAs Versus Hiring a Third Party
Volunteer community members can usually be counted on to do a better job at HOA management than an outside third party.
Whether a homeowners association hires a third-party company to manage its properties will depend on factors like the HOA's size and specific needs unique to its community.
Third-party management companies may be necessary for HOAs that maintain many spaces and complex amenities. Complicated properties can prove too much for a volunteer to handle. HOA management companies are hired to take on HOA finances, notify residents of violations, deliver other communications, and ensure regulatory compliance. But the benefits of outside management have to be balanced against its hefty price tag.
Depending on the number of homes in a neighborhood, outside companies can cost a community tens of thousands of dollars in annual fees.
For many HOAs, a third-party company simply won't make sense in the long term. These communities should, instead, use volunteers to handle management duties and, if necessary, retain a lawyer to help maintain compliance.
Self-managed HOAs benefit from certain advantages. Self-managed HOAs rely on volunteers who've taken on this commitment part-time while balancing other life obligations. It may seem reasonable to simply hire someone to take on this role, but volunteers are often more than capable of managing their own communities and reaping the benefits of doing so.
Self-management provides more control over community management. Self-management allows more flexibility in how rules are enforced, whereas a third-party group may take a more prescriptive approach. Though a third party may take on much of the burden, the HOA board will still have to manage the relationship with a third party. This may require more effort than if the board managed the HOA with volunteers. As residents in the neighborhood they manage, board members have insight and personal interest in maintaining higher property values, as well as on how different, more nuanced approaches can lead to better outcomes.
Self-management saves money for HOAs and homeowners. Volunteers are typically engaged in their roles because they care about the communities and are motivated to do a good job. Given the right tools, volunteers can feel empowered to perform well and continue to grow as managers. As mentioned, self-management can save communities tens of thousands of dollars. By comparison, self-management is free and tools like HOA management software come at a negligible cost. These savings translate to lower dues for homeowners and a larger budget for community amenities.
Self-management can foster a more tight-knit community. Although disputes or conflicts between neighbors are always possible, self-management can lead to friendlier communities that innovate and pull together. Smaller HOAs may find that foregoing a third-party company leads to more local camaraderie and a simpler, more straightforward management style.
Some HOAs' complex needs may require them to hire a third-party management company. However, whenever feasible, self-management has the potential to drive the most value to homeowners.
HOA Management Common Pitfalls
When HOAs hire a third party to manage their properties, they're expected to do the job in a timely and efficient manner. Yet, outside firms may fail to live up to a community's expectations.
Third-party companies take control of the community's data, bank accounts, bookkeeping materials, and more. When an HOA decides to transition to self-management, they may be left wondering, "Who owns our data?" It can be frustrating and time-consuming to regain this information.
Staying organized is one of the toughest HOA management challenges. When evaluating whether your property is managed effectively, some questions an HOA can ask are:
- How do managers go about collecting dues, and managing violations and maintenance requests?
- Are bookkeeping records current and accurate?
- How are records logged and tracked over time?
- Are they in compliance with state regulations and laws?
- Are tax filings managed effectively?
- How often do HOA managers miss deadlines, payments, receipts, or phone calls?
- How effective are managers at settling disputes?
- What kind of tools are community managers using to perform their duties, and are these tools effective?
Answering this last question can help HOAs determine how to address the others. Out-of-date management tools may be holding volunteer HOA managers back from reaching their full capabilities.
Many property managers are still using paper methods to accomplish their tasks. They collect paper checks, track a database on paper or in spreadsheets, and even use paper forms for things like violations and maintenance requests. These antiquated methods also seep over into the financial management of the association and make it difficult to reconcile accounts, issue checks, and provide accurate record-keeping.
This obsolete style of management leads to disorganization and potential legal liability. Information falls through the cracks, requests aren't filled promptly, and there is no history or documentation for payments and other transactions.
If they're using software for management and bookkeeping, is that software as effective as it should be? Is it tailored specifically to the HOA's needs?
What Is HOA Management Software?
HOA management software allows volunteers to take on many duties themselves.
Many HOAs have discovered the effectiveness of using management software to replace multiple spreadsheets or paper records. Volunteers can perform their jobs more quickly, more efficiently, and with bigger savings for their community using this type of software.
However, not all software platforms are created equal. As with other HOA tools, it's important to research software and find a platform that meets your management needs. Here are a few of the main features to consider:
Features for Members
One of the most attractive features of HOA management software is that it allows for the easy online collection of dues. These programs allow members to pay remotely, after normal business hours, and use tools such as auto-pay.
Members also use this software to track their payments, submit maintenance and architectural requests, view a calendar of community events, access important documents, and communicate with managers electronically.
Financial and Community Management
For managers, collecting dues is much easier and more consistent using an online system from a central management software hub. It also makes tracking and managing other revenue and expenses easy via an automated system. This can add a layer of transparency when disclosing annual budgets and balance sheets. Board members can view certain types of accounting reports to help them analyze and make decisions about finances.
Managers can also manage multiple properties with the right software. Taking their business online makes it easy to track payments, correspond with the board and property owners, manage requests, issue violations, and track a database for all of their properties.
Remote access allows community managers to perform their jobs from anywhere, during the hours they're available.
Streamlined Communication
Communication plays a big role in homeowner satisfaction with their HOA. Automated bulk billing, mass email and text capability, and other tools make it easier for volunteers to contribute their time and help out their communities.
HOA management software also allows users to create and send surveys, host social calendars, send past-due notices, issue anonymous violation notices, and more—all of which are tracked and organized within the platform.
Important HOA Management Software Features
PayHOA management software offers a comprehensive solution designed to streamline financial, communication, and management processes for homeowners' associations. Its financial features include robust invoicing and payment functions, seamless accounting capabilities, budgeting tools, and detailed financial reports. The software also integrates with banks to facilitate efficient financial transactions and management of payables and vendors. PayHOA’s software is stocked with indispensable tools.
Invoicing and Payments:
- Accounting
- Budget and Reports
- Bank Integrations
- Payables and Vendors
Communication Features:
- Mass Communications
- Mailroom
- Message Boards
- Website Builder
- Calendar
Management Features:
- Violations
- Request Forms
- Document Storage
- Voting and Surveys
- Owner Portals
Product Features:
- Integrations
- Security
- Customer Support
Our HOA management software provides a unified platform for efficient community governance. It promotes financial transparency, seamless communication, and effective management processes. With a user-friendly interface and a range of features, it is tailored to meet the diverse needs of homeowners' associations, fostering community cohesion through administrative efficiency.
PayHOA offers far more than a payment and invoicing platform. Our robust HOA management software solution gives any size or type of Community Association the tools to stay organized and improve their communities. To see how PayHOA can help your HOA run more smoothly, try our software free for 30 days.
As an HOA manager, PayHOA offers you an all-in-one software platform to replace all those fragmented tools so accounting, communications, payments, documents, violations, and owner requests can all live in one place. PayHOA is the single portal where you can connect directly with the needs of your homeowners. Your residents can use PayHOA to make online payments, view their payment history and important documents, submit requests, and access important updates, streamlining management for your whole community. Try a 30-day free trial today or contact us at info@payhoa.com to learn more.