Get 2 months of free community web site hosting from Community123.com!
Saturday, August 24, 2019
Get 2 months of free community web site hosting from Community123.com!
Only members have access to all features.
Click here to join HOATalk for Free! Members click here to login and access all features.
Subject: Management Company vs. Self-Managed HOA
Prev Next
Please login to post a reply (click Member Login on the menu).
Author Messages
JeremyG2
(Pennsylvania)

Posts:1


01/24/2019 11:09 AM  
My apologies in advance if this topic was already discussed.

Our community is very unhappy with level of service that we have received from our Management Company and a request the the very active BOD was made to have our HOA Self-Managed.

We have a mixed 326 home community (208 townhomes with amendities / 118 single family home with no amendities).

The biggest obstacle that we have faced with our Management Company is the lack of involvement with landscaping/snow removal contracts and slow response to issues. The Board and Committees have been doing the RFP, Monitoring Landscaping Progress/Issues while the Management Company cuts the check for the invoices.

We were approached by a resident who is a licensed CPA but is now stay at home mom (with kids in school) who would work part time in the HOA owned clubhouse (20-25 hours week) to do the administrative duties, vendor relations and field resident complaints for a third of the cost that the management company charges our community each year. We have another resident who offered up his law firms' legal services at a ridiculously low rate. These savings will reduce our residents' monthly dues dramatically.

When we discussed this with our current Property Manager, his reply was:
"In my 30 year of managing associations, no association has ever attempted to do what you are considering!"

Are we crazy to even consider this?

What are the pros/cons of Self-Managing the community as described?

Thanks in advance for your input.
BarbaraT1
(Texas)

Posts:205


01/24/2019 11:34 AM  
"Self managed" means the Board is managing the association itself. It sounds like you'd still be hiring someone to manage you, you would just be hiring an individual, rather than contracting with a company.

Does your resident CPA have her own business that you can contract with? (That would be a lot easier than setting up payroll for one employee). You'll want a detailed contract spelling out her responsibilities. Board members will need to be readily available to sign checks. Is your resident lawyer familiar with HOA laws?

Personally, I'd hesitate to have a resident managing the association or acting as the HOA attorney. They will have access to confidential information, such as owner delinquencies. If there are issues with her performance, it may be harder to address those with someone who is also a neighbor. In terms of relating to the residents when it comes to delinquencies and violation enforcement...sometimes it's just easier to have a neutral third party who doesn't live in the HOA playing the heavy in these situations. There will be at least the appearance of impropriety if they have to interact in their official capacity with a neighbor with whom they've had personal conflict. You may have members who object to a homeowner being paid by the HOA just on principle.

If you're PM isn't working for you - by all means make a change. Maybe you can find someone willing to manage you part time at a similar savings, but who is not a resident?




AugustinD


Posts:1886


01/24/2019 12:43 PM  
I am on my third HOA/condo. It is the first one that is "self-managed" and has been for many years. By this I mean the manager is an employee, not on contract. The manager also owns one of the homes in the HOA. She is a disaster with infrastructure, the books, communications everything. It is the most negative and wasteful community in which I have ever lived. I think my HOA has a reputation among contractors as being easily overcharged, with no questions asked. Why? Because the manager does not feel it is her job to oversee contractors. If you want to hire an individual to run things, put this individual on a one-year contract with an option to renew, with hours she chooses.
TimM11


Posts:287


01/24/2019 1:09 PM  
There are plenty of HOAs that are self-managed, either with volunteers or paid employees. So I don't know what your PM is on about by saying that nobody does it. Whether or not it is a good idea really depends on the specific HOA.

I noticed you said that employing residents will cut dues "dramatically", which makes me wonder what percentage of your HOA dues are going towards the MC. In my HOA, it's only about 10%-11%.

Personally, I would look at other MCs first before going the self-managed route, but it certainly can be done.
SheliaH
(Indiana)

Posts:2623


01/24/2019 1:54 PM  
A 326 home community may be a bit much to be self managed, especially if you have lots of common areas and amenities to keep track of. You'd also need a very motivated Board to stay on top of things - there would be a lot more involved than just showing up to a meeting once a month, and some members may not be able or willing to do this. I also agree hiring residents to do things like legal services can create another set of problems because they're also homeowners.

Your property manager doesn't sound like he's that interested in keeping your business, but before you give him the boot, let me repeat what I said in another post where the OP had a similar problem. First, I'd have a sit down with him and his boss (if applicable) and provide a very detailed description of the problems you've had. Be specific as to what needs to be done to resolve this before you terminate the contract and come up with a performance plan and a deadline by which there needs to be considerable progress, and get all this in writing.

Before that meeting, review your contract to see what the property manager is supposed to do - perhaps one reason you're not happy is that you're asking for work that isn't in the contract to start with.

During this period, you want to consult your attorney to review the contract to see what it says about terminating the contract, so you'll know what your next step will look like if it comes to that. You will also need a transition plan and that will need to be planned very carefully to ensure you get all your records, select a new management company and get them up to speed. There are various websites around the web with tips on how to do this - I'd start with books I've seen on the Community Association Institute website which talk about how to select and then work with a property manager.

Of course, you'll also need to prepare a RFP and send it to other interested companies and then do your due diligence. None of this will happen overnight, so buckle up.

If the property manager finds his contract is at risk, he may straighten up. If he works for a company that has several managers, you might want to see if you can be reassigned (the company may be willing to do that rather than lose your business).
GenoS
(Florida)

Posts:3132


01/24/2019 3:18 PM  
I also think 300+ homes is too many to be self-managed. My 100 home HOA was self-managed between 1998 and last year. Self-managed badly. You have people now willing to pick up the yoke and take on the responsibilities of managing the community. Great. What happens next year or the year after when some of those people get burnt out or move, etc.

Sit down and make a list of everything you think your current management company is doing badly. Add in the things they're doing well. Add in the other things you'd like them to do on top of what they already do. Then sit back, take a deep breath, and come to grips with the fact that YOU will have to do all of that yourselves. What's likely to happen is everyone will be enthusiastic about the idea and willing to help out at first. Gradually enthusiasm wanes, no one wants to do any of the work, and things will begin to deteriorate. That's my personal experience.

Perhaps you should consider a new management company first.
GeorgeS21
(Florida)

Posts:1263


01/24/2019 3:51 PM  
I live in a MC managed community of 320 homes ... I'm on the Board. I am also on the Board of rental house neighborhood of 189 homes.

The 320 home community has sidewalks, common areas, park, gazebo, walking greenbelt - self managing would be very, very difficult. The MC does a pretty good job - mainly because they handle other neighborhoods so have experience across several regimes. Having a bookkeeper is NOT a good substitute.

The 189 home community has almost not amenities other than an entrance with landscaping. It is straightforward to manage for the volunteer board - BUT, even in this case, the work is still significant for the treasurer and the secretary.
JohnC46
(South Carolina)

Posts:8561


01/24/2019 4:26 PM  
Jeremy

MC company inspections might not be in your contract. Our MC contract does not call for any on-site visits. If we have a problem with a vendor, including our MC, we go directly to the vendor as they are the one we contracted with.
EdC5
(Florida)

Posts:93


01/25/2019 5:15 AM  
I"m going to respond as a CAM; I have worked directly for associations and for MCs. Personally, I prefer to work directly for the association.

As far as "self-managed" associations go, I'm not in favor. There are too many niggling statutory details (at least in FL) that get over looked by volunteer management.

Edward J Cooke, CMCA, LCAM
KerryL1
(California)

Posts:6541


01/25/2019 2:45 PM  



Jeremy wrote: "We were approached by a resident who is a licensed CPA... who would work part time in the HOA owned clubhouse (20-25 hours week) to do the administrative duties, vendor relations and field resident complaints..."

There's a lot more a certified property manager would do besides the above depending on your needs. But a "reaI" property mgr (PM) has passed many course that include state statutes, budgeting, etc. I don't get what you mean by the THs have "amenities," and the other homes don't. How are you defining amenities?

Jeremy: "We have another resident who offered up his law firms' legal services at a ridiculously low rate. These savings will reduce our residents' monthly dues dramatically." Again in many stats HOA law is its own specially and many attorneys do not know it. It's not just real estate law or contract law.

I have a feeling that you're underestimating the complexity of your HOA unless it's like the smaller one that George of FL describes.
KellyM3
(North Carolina)

Posts:1418


01/25/2019 7:33 PM  
Hi Jeremy,

Your current HOA board is not actively managing its primary vendor - the management company. Therefore, I would never trust one or two of them, or a resident, to manage such a large community. It's really a small town in some ways.

Your active board should be leading contract negotiations and vetting vendors. It will save your community's money and help the board know its vendors rather than rely on a manager to be a pass-through. The management company's task to issue payment to vendors is important, too, and no small task. Having local board members observe the results of a vendor's work, on your community property, is smarter than relying on a property manager solely.

Overly-active HOA boards stay chronically displeased with everything as problems must exist - or be created - in order to justify the high levels of activity. Board members are unaware of it in many cases. I'm not seeing a problem. Your HOA board is complaining about the level of work it must directly handle.....that gets WORSE under a self-managed system because you add vendor payments and collections to what would be a full plate of operations.

Don't do it.
BonnieG1
(Nebraska)

Posts:1144


01/26/2019 8:46 AM  
Years ago, we were self managed. It was a nightmare. There was much in-house fighting. If you are unhappy with your current PM, I would advised to find another PM. I definitely would not advise self-management.
Former President.
Please login to post a reply (click Member Login on the menu).
Forums > Homeowner Association > HOA Discussions > Management Company vs. Self-Managed HOA



Get 2 months of free community web site hosting from Community123.com!



News Articles Provided by: Community Associations Network
News, articles and blogs about condos/HOA's

Only members have access to all features.
Click here to join HOATalk for Free! Members click here to login and access all features.







General Legal Notice:  The content of forum messages are from the posting member and have not been reviewed nor endorsed by HOATalk.com.  Messages posted by HOATalk or other members are for informational purposes only, are not legal or professional advice and do not constitute an attorney-client relationship.  Readers should not act upon this information without seeking professional counsel.  HOATalk is not a licensed attorney, CPA, tax advisor, financial advisor or any other licensed professional.  HOATalk accepts ads from sponsors but does not verify sponsor qualifications nor endorse/guarantee any sponsor's product or service.
HindmanSanchez Legal Notice:  (For messages posted by HindmanSanchez) This message has been prepared by HindmanSanchez for informational purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute an attorney-client relationship. Members of HOATalk.com should not act on this information without seeking professional counsel. Please do not send us confidential information unless you speak with one of our attorneys and get authorization to send that information to us. If you wish to initiate possible representation, please contact an attorney in our firm. Our attorneys are licensed to practice law in the state of Colorado only.

Legal Notice For Messages Posted by Sponsoring Attorneys: This message has been prepared by the sponsoring attorney for informational purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute an attorney-client relationship. Readers of HOATalk.com should not act on this information without seeking professional counsel. Please do not send any sponsoring attorney confidential information unless you speak with the sponsoring attorney or an attorney from the sponsoring attorney’s firm and get authorization to send that information to them. If you wish to initiate possible representation, please contact an attorney in the firm of the sponsoring attorney. Sponsoring attorneys that post messages here are licensed to practice law in a specific state or states as indicated in their message signature or sponsor’s profile page. (NOTE: A ‘sponsoring attorney’ is an attorney that is a HOATalk.com official sponsor and is identified as such in the posted message or on our sponsor page.)

Copyright HOA Talk.com, A Service of Community123 LLC ( Homeowners Association Discussions )   Terms Of Use  Privacy Statement