When Should You Hire an HOA Management Company?

When creating a homeowner’s association, there are a lot of operational requirements you need to grapple with. One of the most important is whether you will allow community members to manage the HOA or take bids from HOA management companies. There are pros and cons to self-management for HOAs. However, most of the disadvantages are easily resolved by partnering with a law firm when necessary and using software to help automate the rest of the process.

Even with these resources, you may feel like you are way out of your depth. So, is hiring an HOA management company the right option for you? There are certainly some times when it may be worth considering.

No Volunteers

Not all community members may feel compelled to join the board of directors or otherwise participate in managing the HOA. Demographics may have a big role to play in this. If your community is composed of two-income families and younger people, you may have a much more difficult time finding people with the extra time to dedicate to HOA management.

However, communities with stay-at-home spouses, work-from-home spouses, empty nests and retirees may have the time and will to manage the HOA. It’s worth noting that some self-managed HOAs simply outsource the positions they need additional assistance with. To this end, they may hire secretaries to man the office, take calls, and respond to emails.

Community Preference

Some community members may make it clear from the start that they prefer to interview HOA management companies for the job. These residents may have had negative experiences with self-managed HOAs in the past. They may also worry about the resale value of their homes, because buyers often shy away from properties within self-managed communities. When community members overwhelmingly ask for professional property management, it may prove difficult to pitch another option.

If you prefer self-management, however, there are points you may raise to convince community members including cost, control, and what best fits the community’s needs. For some, the benefits may outweigh the preconceived worries.

Community Rivalries

It’s sad to say, but not all communities have peaceful relationships. Sometimes, neighbors develop a tendency to fight. This may not always mean coming to physical blows or verbal exchanges. It may, instead, manifest in passive-aggressive actions. One person may over-police a neighbor and could even bring lawsuits against them. Legitimate disputes may also surface over property lines, fences or even who has the right to cut the limbs from a tree. In these situations, allowing community members to manage the HOA could worsen existing problems.

Litigation

An honest mishap may lead to a lawsuit or the threat of one. This could bankrupt the HOA or even cause some personal liability for the individuals managing it. For this reason, homeowners and boards alike may feel less concerned about the additional costs of hiring property managers. If this is a worry for your HOA board, it may be better to forego self-management and work with property managers.

On the other hand, some wealthy residents prefer to manage their own HOAs. This may be the case if they are concerned about privacy. Celebrities and other high-profile professionals may fall into this category. Naturally, these people also have less time to dedicate to managing an HOA. To get around this problem, many invest in HOA management software.

Large Communities

The smaller communities are, the easier it is for homeowners to manage the HOA on their own. Up to medium-sized communities can still do well with self-management. This may include a small block of townhomes or a planned community with 50 or so homes. However, large communities may need to consider hiring professionals. Otherwise, the sheer amount of work may overwhelm volunteers.

Larger communities often have more or bigger amenities. There are also far more people going in and out of these spaces, which increases the need for cleaning areas and servicing machines. It can also become difficult to keep up with all the residents and track whether they are following the rules.

Security Concerns

Even the most luxurious condos are often built in areas where security may be a concern. Gentrified areas suffer from this the most. When safety becomes a concern and communities need to gate the community or hire security companies, it may be best to hire a property management company. Security companies or property managers may offer additional protection for community members when liability issues arise.

Some communities still insist on managing themselves, even in the wake of security risks. To get around the resulting legal complications, they may choose to hire attorneys to negotiate with the security company. Attorneys can ensure the creation of a contract that holds the security company liable for safety-related premises liability claims.

The Bottom Line

The choice between hiring a property management company and self-management comes down to each individual community. While there are some instances where hiring professionals may make more immediate sense, a little creativity and a lot of compromises can help with self-management. It’s time to try to determine the right solution for your community. Making full use of technology can help. PayHOA is one software solution for self-managed associations to rely on to ensure smooth operations. The software helps HOA managers with many different tasks, like tracking maintenance issues, accounting, collecting fees, and communicating with residents.