Keeping the management of an HOA within a community can sound appealing to homeowners who think all the HOA does is plan community parties and manage landscaping. However, when running an HOA, there are a plethora of rules and regulations (on a local, state, and federal level) directors would need to have a robust understanding of to keep a self-managed association on the right side of the law.
While the risk for some of these infractions are minor, others can cause significant financial and legal problems for a self-managed HOA. Here are a few risks your HOA can avoid by hiring a management company.
Lack of HOA Knowledge
Most problems self-managed HOAs face start here. Boards are entirely made of volunteers, many of whom do not have the time to learn the ins and outs of HOA laws. Trying to manage a board position alongside a career or familial obligations can also put board members on a time-crunch to fulfill their duties to the HOA, which could see them neglect seemingly less pressing business.
Legal Noncompliance
When a board decides to self-manage an HOA, the risk of running into legal troubles can increase. Infractions an HOA can run into include not submitting annual disclosures and not correctly filling taxes. Running a self-managed HOA can cause these problems to pile-on and put the association in a tricky spot before anyone realizes something is wrong.
Say your board is not properly assessing and maintaining the infrastructure of your association, which results in an injury. Does your HOA have a lawyer on retainer? Has the board made sure the HOA is insured to out in case the association is found liable?
Insufficient Manpower
Everyone working for an HOA through the board of a subcommittee is a volunteer. As such, the more active the HOA, the more work these volunteers will have to do to keep events on track, maintain community infrastructure, and properly submit records. At best, this will lead to shorter notice times before events and HOA meetings. More likely is that this will result in miscommunication to homeowners about important dates, issues, meetings, and more.
Who is Advocating for Members
A self-managed board will not be able to bring a neutral perspective to an issue presented to the board, whether it be how to manage clean-up after a storm or negotiating pricing with vendors. An outside management company will be able to bring an objective view to matters concerning the community and have approved vendors for the association’s needs, ensuring quality work and good pricing.
Lack of Accountability
With a self-run HOA, it can feel like the board is not accountable to anyone, even if that legally is not the case. Employing a management company can ensure homeowners’ concerns are heard, whether it be through messages with the community manager or making sure adequate time is given for open forums during board meetings.
Heavier Workload
Self managing a HOA is the easiest way for the volunteer Board of Directors position to start requiring the attention and dedication of a full-time job. Whether the board members are working full-time or retirees, balancing life and the time commitment of a self-managed HOA will make it harder directors to see tasks through to completion.
While self-managing an HOA can make since initially, the tasks required to properly run HOA can quickly snowball on a group of volunteers. A HOA community management company will provide a board and community subcommittees with expertise and resources they might not otherwise be able to take advantage of. If you’re still having doubts about employing a HOA management company, someone at William Douglas will be happy to answer your questions.