Self-Managed HOA

Thinking about becoming self-managed due to 1) finances-cannot afford to pay a managing agent and 2)contract expires and we do not want to renew with current company due to many issues of not honoring contract.
What is the best way to effectively self-manage a small community less than 150 homes.
We've looked into BBT assocaition services for billings and collections.

Darlene,

We are a community of 130 lots and are self managed.
We do hire an independent bookkeeper to collect, track and deposit assessments.
Therefore, what you are looking at doing is possible.

The best way is to be self managed is to be organized.
Once your organized, create a calender of association events to be used as a guide of when things need to be done.
You should also create a calender of scheduled maintenance/replacement for your capital components (this should be easily created based off of information within your Reserve Study).

It will take some time to get this in place. Once you do, the mechanics should be fairly easy.

Hope this helps,

Tim

I am the president of a self-managed single family development with private roads and 126 1-6 acre home sites. Our board has 5 members and our dues are currently $750/year (up from $500 for the past 5 years). There are currently 5 homes under construction and another 6 or 7 lots remaining in the sub which are not yet built. The oldest phase in the sub began about 16 years ago. We employ no one to collect dues or pay bills but rely entirely upon volunteers. Please email me at [email protected] if you have questions. I guess that we save $500 per lot by not having a management company (given that we have almost 4 miles of private roads that must be plowed and maintained, as well as common areas and entrances to maintain). Can anybody tell me how much management companies charge? How do they respond to homeowner complaints and the need to repair or replace something? It is not easy to run the association without any outside help, but in a way it is satisfying.

Janet,

Thank you very much for your reply. Sorry I have not acknowledged it sooner. That is great information I will compare to the amounts that management companies are charging here. The lowest quote I got was $750/mo to pay the bills and keep the books, nothing else. That sounded high. Each letter sent to enforce CCR's (we call them the restrictions) would have a separate charge, as would all other services.

The topic reminded me of the folling post made 6 years ago.

01/02/2006 10:20 AM Quote Reply
The following comments are based on my experience serving on self-managed boards in three states and serving many associations in Colorado as their professional manager. I would really like to hear from those of you who have other opinions.

Thanks,
RogerB

1. Which do you prefer and why?
When possible I prefer a good professional managing Agent who will protect the investment in my home and the quality of life in my community. Of course, for voluntary HOAs the owners can not be forced to pay an assessment so the association has no guaranteed funds to commit to a managing agent.

2. What do you see as the pros and cons of each?
Self-management
Pro - A greater sense of control by some board members and the belief that the assessment will be lower when not paying for professional management.

Con - When the board of directors is not knowledgeable and conscientious there can be many problems, including doing a poor job and having the potential for significantly greater expenses. Do you realize the potential financial liability to such board members?

Professional management
Pro - a good managing agent can provide guidance which can result in better board decisions and handling of problems; reduce potential for major legal expenses; save the association money through reduced costs for contractors and other services; provide more effective enforcement of restrictions; better accounting; and more.

Con - Management companies that are too expensive, have inexperienced Agents, and/or function independently rather than as part of the HOA team under guidelines established by the board.

3. What is your major complaint on management of your association?
From my experience the most common complaints are, respectively:
a) poor board of directors, especially the President.
b) poor managing Agent.
c) failure to have realistic architectural modification guidelines.

4. How do you evaluate management of your association?
a) the quality of life maintained in the community.
b) the maintenance of homes and associated increase of property values with time.
c) any law suits.
d) communications provided.

5. Where do you think self management is more effective?
Knowing what I now know, I would not live in a self managed HOA again.

6. Where do you think professional management is more effective?
Always more effective assuming a good managing Agent is used. Preferably one who’s cost is more than offset by reducing total expenses

I live in a small 5 unit townhome association that is self managed. I beg them every time we have a meeting to consider hiring a management service because things have gotten so out of control. I would really think about it before you switch to self management. Maybe it is harder for us because there are only 5 units, I don't know. Had I realized when I bought my home the drama I would have to deal with - and no one really "in charge" to handle problems - I would never have moved in. I wish you better luck.

I'm with David.

I was in a 10-unit complex. We went through three management companies. They dumped us after a certain board member contacted them. That board member's husband is now running the board.

Without a management company we've had problems with the board recognizing California state civil codes. And not just the Davis-Stirling Act.

Self-management is possible, but not easy. It means that everyone has to make an effort to do what's best for the group and volunteer to help.