Help with Self Managed HOA

Started by StaceyH • 41 replies • 16995 views

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StaceyH (North Carolina)
Posts: 3

Posted:

Hello,

I am writing on behalf of our board to gain a better understanding of Self Managing our HOA. We are a very small community of 48 homes and struggling to make ends meet.

We pay a management company $3900 a year and to date the only thing the company has done is send 9 violation letters.

Recently the President and ARC members have resigned and we just this week lost our landscaper (a neighbor that the last pres hired).

The bottom line is, that we do not collect enough in dues to keep our management company and hire a landscaper. We have new board members now and we are all in favor of removing our Management Company and self managing our community.

I am hoping some one out there can explain what it’s like to self manage and offer any resources that you may know of ie. Books, websites and the like that would help in preparing ourselves for this journey 

Please advise,
Stacey

BradP (Kansas)
Posts: 2,640

Posted:

Stacey:

We have 165 homes and self manage. Our dues are onlyh $120 a year per home. I would suggest getting a copy of your bylaws and cc&r's, that is a good start to self manage. There are a lot of great people on here that can answer questions too. I would encourage it, if you have good people it can be done.

LuciusD
Posts: 139

Posted:

Posted By StaceyH on 06/23/2006 7:13 AM

Hello,

I am writing on behalf of our board to gain a better understanding of Self Managing our HOA. We are a very small community of 48 homes and struggling to make ends meet.

We pay a management company $3900 a year and to date the only thing the company has done is send 9 violation letters.

Recently the President and ARC members have resigned and we just this week lost our landscaper (a neighbor that the last pres hired).

The bottom line is, that we do not collect enough in dues to keep our management company and hire a landscaper. We have new board members now and we are all in favor of removing our Management Company and self managing our community.

I am hoping some one out there can explain what it’s like to self manage and offer any resources that you may know of ie. Books, websites and the like that would help in preparing ourselves for this journey 

Please advise,
Stacey

As a president of a 184 member self-managed community, I would urge you to proceed very cautiously. You may not realize all that the management company is actually doing to support you.
Community Associations Institute has a book store loaded with books on topic
Your public library probably does also.
Lou Day

BrianB (California)
Posts: 2,820

Posted:

whatever you decide to do (and i am in favor of self managing), be open with the members. there will be bumps, and some errors made.

if you decide to self manage, make sure you INFORM the members of the process. you can have frequent meetings to inform them of actions, or just send out monthly or quarterly updates via mail. Note, i say INFORM.

the members elect a board, the board makes decisions. do NOT fall into the trap of letting every member vote, or even opinionate, on every decision in every meeting. very clearly deliniate what the board does, and what members do. Frequently, the need for a member to meddle in every aspect of a board's affair is because they feel left out of the loop. good communication with everyone can make them feel they have a voice, that you listen to their concerns, and that they are empowered, but they don't get to vote on every motion every time.

the election of the board is a democracy. the running of the association is not.

GeraldT1 (<Not Specified>)
Posts: 519

Posted:

StaceyH - Your governing documents may have requirements that the decision to self-manage or dissolve the by-laws requires a percentage of unit owners to decide. The Board as a governing body may not be able to accomplish self-management without the community vote. My opinion is that it's the boards that set the tone for the management company and can guide one they are disatisfied with back on track. There is no such thing as an MC that does it all, impossible. An MC requires strong boards and interested community members to get involved and participate. There is always a little bit of sel-managing even with an MC, there should be no such thing as a hands off approach,and let the MC do it all. Certainly not for the kind of maintenance your residents are paying.

Who collects the $81.25 per unit owner per year? This is only $6.77 per unit owner per month. This maintenance fee seems ridiculously cheap, no wonder you're struggling to make ends meet and the landscaper resigned.

It's one thing to be a volunteer on a committee, or provide input where expertise may be. It's another to be contracted for the HOA you reside. So I would caution you regarding contracted service providers residing in your HOA.

GeraldT1

LisaS (Illinois)
Posts: 341

Posted:

Our association is 300 single family homes, and we are self-managed. because we did our research, we have hit very few bumps in the road. Our dues are only $150 per year. Our collection rate is at 98%. the unpaid assessments have been filed as liens on property owners.

It can be done, and although I do advocate it I also caution that it takes committment.

Good luck!
Lisa

SwanB (Washington)
Posts: 199

Posted:

I agree with Lisa that self-managing can be done but it takes commitment and it takes time and energy. I also cannot imagine how you do it with your annual dues as low as they are but you may not have any common areas to maintain, etc. like swimming pools, roadways, front gates, clubhouses, etc.
If your membership is willing to pull together and interact and be supportive of the process then you can be successful, at least if there is a sense of a pool of volunteers to glean from.

RogerB (Colorado)
Posts: 5,067

Posted:

For self managed HOAs I strongly recommend the Board and committee members do two things in addition to having good insurance and being incorporated as a non profit with proper wording to provide a "corporate shield.

1) Get a thorough education on HOA management to try to prevent law suits. CAI provides information and some HOA attornies provide free seminars to Board members.

2) Don't have any one person do too much. Burnout can occur and there are often only a handful of good volunteers.

I've been there, done that, glad I did, and would never do it again.

JillV (North Carolina)
Posts: 5

Posted:

Stacey,

Your situation sounds very similar to mine. We are also a small community, whose HOA has gotten off to a rocky start. We tried to self manage for a year, but found it difficult. You need people with a lot of time on their hands willing to devote it to the HOA. Record keeping, especially for the treasurer was a huge task. It is also not a pleasant task enforcing rules and handing out/mailing notices to your neighbors in violation. We hired a management company to help us about 8 months ago. Although I haven't seen sweeping changes yet, I am more hopeful that problems will be resolved eventually.

If you have people willing to devote a lot of time, you could always try it for a year and see how it works out. Good luck!

JulieS (Georgia)
Posts: 412

Posted:

When our associaton was turned over to the homeowners, the three elected board members immediately fired the management company and tried doing everything themselves. They recruited two more individuals to the board for help, which didn't make a difference. None of these people had any experience with HOA's and they concentrated more on violations of a bird bath in the front yard instead of looking to the financial stability of the neighborhood. It seemed more of a power trip than running a business.

They ended up hiring a condo management company that the president worked for. This was awful too because they only did condo's and not HOA's.

After I became a board member,we hired a new management company to get us back on track. We had a reserve study done and started to build a reserve fund (the condo MC said we didn't need a study or fund). It has been a long road over the past five years but we are starting to get things to the way they should be...and just in time for major repairs to start!

Self-managing takes knowledge and effort...if you don't have dedicated volunteers and resources to do things correctly, things can go downhill quickly and it takes a while to get back on track. The purpose of the board is to protect the community and people's investments. You need to ask if you have the dedication for the long-haul to make self-managing work.

BrianB (California)
Posts: 2,820

Posted:

some things to ask as you think about self managing:

How many homes/owners? the more there are, the less likely self managing will work. The time sink alone grows huge

How many services does the HOA offer or pay for? Common area with rocks only? fairly easy. Lawn? tougher. Clubhouse? tougher still. Lighting, water, pools, slides, playgrounds? every additional item increases complexity and makes self managing less likely.

How strict are your Codes? the better written they are, the stricter they are, the more self managing gets difficult.

Add up all those factors, mulitply it by the level of scrutiny of hte owners (ie, apathy versus watching your neighbors for every tiny infraction) and then think about it.

I can self manage our association. we pay insurance once a year, pay the city for two streetlights, and landscape some rocks and bushes for common areas. I can file the one page tax return myself. we have 40 homes, and our codes are written so badly, they are practically unenforceable, so there's not much reason too. That's not so much for a small group to self govern. However, if we had a more complex HOA, there's no way it could be done.

BradP (Kansas)
Posts: 2,640

Posted:

All great points. We have 165 homes, a pond with common area surronding it and common area at each entrance with signs. Our biggest headache has been getting organized and getting everyone to get a yard established. I really think if you have some good volunteers that it isn't too bad. Probably the hardest and most time consuming part is bookkeeping, we use Quickbooks and can manage it fairly well. We are going to try and convince our membership to sign up for automatic bill pay, a service with our bank where we submit the information to them either monthly or quarterly and the funds automatically get sent to our account. IF we can get 1/3 of our people or more to do that it will help tremendously.

Roger had a great point, you need lots of volunteers. We have two people right now who really are putting in the effort and we are both feeling the strain. I am hoping to convince more people to step forward or I may opt out of running for the board again this fall.

SwanB (Washington)
Posts: 199

Posted:

We have over 400 members with 344 established homes and over 100 undeveloped lots within our association. Our common areas include the roads, front security gate, caretaker's house, clubhouse, tennis courts, pickle ball court, playing field, swimming pool, A-frame storage shed and lot, numerous vehicles-riding lawn mowers, small pick-up truck, large pick-up truck with plow for snow, tractor, etc.
We sit on the edge of a national forest and have a glacial creek running along another edge of our common property. This creek has flooded in the past.
We have nine Board members, a Bylaw committee of three members, and three employees. We contract out to an accountant and we have an attorney.
Our association is over 30 years old and we have self-managed all of this time. Some Boards have been better than others but only one Board has mismanaged and it only took less than a year for the members to shape them up.

JulieS (Georgia)
Posts: 412

Posted:

You can always look at having the accounting outsourced and an attorney on retainer instead of the full management services or totally self-managing. You just need to have the volunteers and knowledge to do it. Swan is lucky in that they have volunteers. I have to call my fellow board members 10 minutes after the board meeting is to start and ask where they are and if they are coming. Being the primary person who either does it all or gets people to help can get old, fast. I do get burned out but when no one steps up to take care of things and take care of them correctly, it reminds me of how important it is that I am doing this. It also takes people who truly care and have committment.

StaceyH (North Carolina)
Posts: 3

Posted:

What great support here on HOA Talk. Thanks to everyone that has responded to my inquiry.

Our Board has decided to go with a management company that has agreed to manage our financials and legal matters. The board will manage the paperwork ie. sending the violation notices, delinquent account notices, news letters etc. We will have a special assessment early next year and increase our dues somewhere in the neighborhood of 10-25 percent.

We have decided to hire a landscaping company that manages the condos next to our development as they gave us a figure that matches our budget.

I am happy to say that things are looking much better :-)

Thank you for your support.

Stacey

StaceyH (North Carolina)
Posts: 3

Posted:

BrianB (California)
Posts: 2,820

Posted:

SwanB: Two things

I am amazed and proud that your community (as complex as it is) manages to self-govern. With all that you have, i think that's an inspiration to others.

What the heck is "pickle ball"?

ChristieW (Michigan)
Posts: 3

Posted:

Hi Lisa,

I am also a Board member of a very small self-managed HOA. We only have 31 homes, and have just started sending out our first set of violation notices and now a round of 2nd notices. Where did your association find samples of violation notices/letters????

We are interested in doing all we can to be effective at resolving violations and collecting fees. Any help or samples you can forward would be greatly appreciated!!!!

Thanks,
Christie
HHCOA Secretary

DavidJ2 (Arizona)
Posts: 13

Posted:

Stacey,

I know this response is late, but I think I can help you out. I have served 5 years on a Board in a self-managed HOA. We have 389 single family homes in this HOA. It can be done and done effectively. The main difference here is we have no common areas. However, I have created a wealth of forms and written protocols that make the job easy to follow.

If interested, please feel free to write or call me.

David Jennings
623-334-0760
Peoria, AZ
[email protected]

JoeK1 (Michigan)
Posts: 37

Posted:

Whether your association consists of 4 units or 400, it is -- or should be conducted as -- a business. The BoD has the responsibility to act reasonably and properly. If it is felt that the required expertise is not present or that if sufficient time can not be devoted to this duty, then the BoD should consider hiring a management company to assist them. If the necessary qualities are present in your BoD, then self-management is a very viable option.

If you are just starting off (or repairing) your Association's management infrastructure (business processes, how decisions are made, communication system, etc), see www.**********.com to get a list of all the things you should consider doing to build a strong and effective management system. The impact of an ineffective Board cannot be overstated and the best way to fix an ineffective Board is to prevent it from occurring in the first place, if you have that opportunity.

JoeK

GloriaM (North Carolina)
Posts: 829

Posted:

"Roger had a great point, you need lots of volunteers. We have two people right now who really are putting in the effort and we are both feeling the strain. I am hoping to convince more people to step forward or I may opt out of running for the board again this fall."

Brad:

What happens when those (2) volunteers either sell their homes and move out; or worse like Roger said become so burnt out doing everything themselves?

Unfortunately the biggest issue I have seen in the past with self managed HOA's is continuity of record keeping, collections and boards staying current with the laws. As well as the 2 lonely volunteers starting out of the gate full steam ahead and finding the task daunting.

If you have the members committed to the duties and sticking to it kudos!

Finding good management is a task in itself and requires the board to ask the key questions during the interview process; searching various management companies and checking the referrals. Research, research, research just like you would in hiring a landscaper or any other contractor.

YS (California)
Posts: 1

Posted:

Saw your comment about self managed HOA and very thankful for your information. We have a very small HOA with only 8 units and the MC charges and reserve funds they set up cost us $319 a month. That is way too high. We definately want to start self managing. In CA, is there any special monthly financial report that the HOA has to produce?

MicheleS3 (Florida)
Posts: 30

Posted:

I'm in Florida and I have some concerns about self managing and the HOA board. A little background: We are a relatively new community (about 4 years old)of 142 single family homes. We currently have 14 homes in various stages of foreclosure. We are not a fancy community; no pool, playground, clubhouse, etc. Because this is FL we have waterways for drainage purposes, which require maintenance. We have a small entrance which requires mowing, watering, lighting. We self manage and are having such a difficult time! We've gone from 8 board members to two! We have tried so many things to get homeowners to participate. The most participation we get is complaints about one thing or another - usually something a neighbor did that someone didn't like.

Okay - question is; I have been told that in FL you must maintain a 3 person board or the state can take over your HOA and administer it. At a cost, of course. I'm wondering if a management company might not be a good idea. I do believe we would have to increase the dues of each HO by at least $100.00 per year, which will probably not be easy in this economic slump. We already have about 15 HO's who have not paid their dues for 2008.

Does anyone know what would happen if a proper board cannot be maintained? Thanks for your time - I'm looking forward to your answers.

BethS2 (Texas)
Posts: 19

Posted:

I am interested in this distinction. I am in a very small HOA (6 members and 10 units). Do you think that applies in this case too? As it is now, we have no board and only a President. Usually nothing gets done, but if there is a decision we have one vote per unit owned. Because of the ownership split (1 person owns 3 units, 2 own 2 units each, 3 own 1 unit) some votes carry more weight than others.
What do you think is the best way - in terms of fair and efficient - to run such a group?

RogerB (Colorado)
Posts: 5,067

Posted:

Beth, the voting is fair. As long as you comply with the Bylaws and the members are in agreement you could be in compliance and efficient operating with only a President who does everything. However, I would not want to be solely responsible as the President and would demand D&O and theft insurance.

BethS2 (Texas)
Posts: 19

Posted:

RogerB,

Thanks for your reply. Our bylaws state that the Assoc. is to be governed by 3 "Board Managers". These 3 then have the power to elect/appoint 4 "Officers": President, VP, Secretary & Treasurer.
The developer and 2 others were the initial Board managers (1976 - 1979) and I don't think there have been any since then. There are no provisions on how to elect board managers.

Our President is now resigning after 15 years and I have been asked (and am considering) taking over that role, but am NERVOUS!
I have been an active volunteer in the 3 years I have owned and lived here but I have found our 6 members to be highly apathetic and only surface to complain. As (or if) President, I expect to encounter this even more and will be looking for ways to increase participation and positive community building.

HOWEVER, I will be powerless if the whole thing is illegal or with no real authority. I do not want to waste my time or go through the emotional hard work without a reason to believe it will improve things.

Specifically, one owner (of 2 units) is a lawyer, has threatened a lawsuit to the Assoc in the past over something she didn't like, and in particular doesn't like me! This could be a recipe for disaster? I don't know if the current insurance policy covers Board liability suits, but to be sure it will be top priority if I take the position. Still, as everyone keeps saying on this forum "anyone can sue anyone" and frankly, I'd rather sell or pay receivership fees than go through such a big/expensive drama.

So, my questions are:

1. Can one "President" administer the entire project legally, when there is no "Board of Managers" or other officers as stated in the bylaws?

2. If not, can I be elected President, rename myself a Board Manager, and then immediately appoint 2 other Board Managers? Or would the 2 others have to be elected? I doubt I could find 2 other willing owners.

3. Can the same person be both a "board manager" AND an officer (Pres., VP, etc)?

Any answers would be helpful....thanks for your time!

EllenS1 (Florida)
Posts: 1,148

Posted:

YS,

Excuse me while I pick myself up fron the floor. 8 units and a management company, etc at the cost of $319 per month. Get a copy of the statutes for your state and you will see what is required. How much of the $319 goes to reserve and how much to your management company? With only 8 units self managing should be simple..it is basically a matter of common sense. How old is your comnplex and what will be needing repairs in the near future

EllenS1 (Florida)
Posts: 1,148

Posted:

I didn't realize I was responding to a post in 2008 which started in 2006. Everything changes and 2006 posts should be deleted. Ditto for any posts over a year old.

TracieS (Colorado)
Posts: 460

Posted:

Well, all I can say is that I do pretty much EVERYTHING for our complex...completely outside of the CCRs... Long story, and I'm trying to get out of it...

It's POSSIBLE. It's PROBABLE. Is it SMART...to be the ONLY one who works for the betterment of your association...NO!!!!!!!!!!!

We're 19 units, townhome style. Few problems, but lots coming on the horizon (next 10-30 years) as far as repairs, document issues, etc. I'm working now at strong-arming people to assist. I've finally got our BOD meeting quarterly, instead of once per year...

It's hard...it's thankless...but, it's possible. I do NOT recommend you begin being the ONLY one...take it from one who knows... Some of it though...kind of rewarding...

GlenL (Ohio)
Posts: 5,491

Posted:

Beth, I'm assuming that a Board Manager is the same thing as a Board Director or Board Trustee so yes you would be both at once and yes if you can find someone to help you can appoint them. If the Board gives the president the power to administer the HOA one person can do it. However as far as the HOA corporation goes I'm not sure; I know back in the 80's when I had a small sub S corp. I had to have at least two officers as I couldn't be both president of the corp. and treasurer.

Studies show that 5 out of 4 people have problems with fractions

BethS2 (Texas)
Posts: 19

Posted:

TracieS,

You sound like just the person I would like to talk to. Do you have time over the next couple of days? I have to make this decision by the meeting on Sunday (Nov. 15) and would love help on clarifying some issues.

For example, did you/do you have an elected board that follows the structure outlined in your documents? If you are the only one doing anything, you must not I'd say. This is the first legal quandary I am having trouble with. My 'election' as President does not follow the documents which say the President is appointed by the Board. Only thing is, no board exists! lol

Is your situation similar? And what did you do about it when you started work?

BethS2 (Texas)
Posts: 19

Posted:

Thanks GlenL,

As of now, there is no board.
If I rename my position after elected as President, are you saying I can function as a one member Board?

We are set up as a non profit, so maybe the answer is in those laws. A little light reading for this afternoon!

TracieS (Colorado)
Posts: 460

Posted:

Quote:

Posted By BethS2 on 11/10/2009 9:32 AM
TracieS,

You sound like just the person I would like to talk to. Do you have time over the next couple of days? I have to make this decision by the meeting on Sunday (Nov. 15) and would love help on clarifying some issues.

For example, did you/do you have an elected board that follows the structure outlined in your documents? If you are the only one doing anything, you must not I'd say. This is the first legal quandary I am having trouble with. My 'election' as President does not follow the documents which say the President is appointed by the Board. Only thing is, no board exists! lol

Is your situation similar? And what did you do about it when you started work?

Well, as many will tell you, MINE is NOT the model for how to work an association. I have conflicts-of-interest coming out my ears! Very difficult to be on the BOD, serve as President, AND serve as the property person. It's worked ok for the last 25 years, but we're so far out of legal compliance that it's just not funny.

But...I can certainly serve as an example of how NOT to run an HOA... Search my previous posts...you'll see that it's a struggle...

But, my email - [email protected] I'm happy to offer insight from someone who's been there...and is still there...and desperately wants out...

CharlesB17
Posts: 112

Posted:

We are a self managed Property Owners Association in North East Florida. We had A great deal of issues resulting in a large Board of Directors turn overs. Not one President had completed their term due to the constant bickering and arguing amongst the Association members and the BOD. We found our solution. And by implementing the solution, we not only resolved 99.99% of all the issues. We increased our capital flow, reduced attorney fees, reduced the man hours from approximately 80 man hours weekly to about 9 man hours weekly. This is to run approximately 2000 home owners / property owners.
Between collections, deliquent accounts, bookkeeping errors, no way to communicate between BOD and the members, properties changing ownership, disputes in who paid and who had not, and etc... Now we have resolved those issues, we have since focused on the issues that loomed over us but, could not attend to due to the other drudgery. By implementing our solution, We doubled our budget, decreased the number of CC&R violations and have improved our community.
If you would like to know the solution, you can send me an E-Mail to [email protected] and I will be glad to tell you the solution.

TimB4 (Tennessee)
Posts: 21,047

Posted:

Quote:

Posted By CharlesB17 on 04/09/2011 10:24 AM

We found our solution. And by implementing the solution, we not only resolved 99.99% of all the issues. We increased our capital flow, reduced attorney fees, reduced the man hours from approximately 80 man hours weekly to about 9 man hours weekly. This is to run approximately 2000 home owners / property owners.

Charles,

You have mentioned this before. In general terms what did you do to solve your problem?

Tim

CharlesB17
Posts: 112

Posted:

We first sought out a solution by consulting with a small company. They taught us how to self manage using some software they designed. We fired the CAM, the data was retrieved from the CAM and installed into this software, which basicall totally automates the Office stuff. Now the accounting is basically self managed, with little effort of the BOD. And the software gave the entire community a voice and our 2000 or so owners police the neighborhoods via this software solution for reporting CC&R violations. Now, no bickering, and harmony in the neoghborhood and the association has given each member a voice without repercussions. Each member can see everything the BOD does and even see their personal account and make payments online.
As I said before. I can tell you more through a personal E-Mail. I can not advertise or mention this companies URL or their name without repercussions here on the forum.

HadarG (California)
Posts: 10

Posted:

To all self-managed HOA members:

I have a company that does all the accounting for self-managed HOAs. This is great, especially if you want to remove the management company from having complete control of your accounts! - it is also a check on the management company! All reports are published online for owners to see. We are in the process of building great online tools as well. Check us out www.GELLERBRIDGE.com

We love helping self-managed HOAs make order out of the chaos.
thanks!
Hadar
310-435-4419

HadarG (California)
Posts: 10

Posted:

Stacey:

I have a company that does all the accounting for self-managed HOAs. It is for small HOAs like yourself who cannot afford management companies but whose members do not have time to do the financial management. We can also assist with administrative items - like letter writing etc, and online file management. We charge much less than management companies! All reports are published online for owners to see. We are in the process of building great online tools as well. Check us out www.GELLERBRIDGE.com

Feel free to call and discuss!

We love helping self-managed HOAs make order out of the chaos.

thanks!
Hadar
310-435-4419

HadarG (California)
Posts: 10

Posted:

RogerB:

I have a company that does all the accounting for self-managed HOAs. It is for small HOAs like yourself who cannot afford management companies but whose members do not have time to do the financial management. We can also assist with administrative items - like letter writing etc, and online file management. We charge much less than management companies! All reports are published online for owners to see. We are in the process of building great online tools as well. Check us out www.GELLERBRIDGE.com

Feel free to call and discuss!

We love helping self-managed HOAs make order out of the chaos.

thanks!
Hadar
310-435-4419

HadarG (California)
Posts: 10

Posted:

Christie:

I have a company that does all the accounting for self-managed HOAs. It is for small HOAs like yourself who cannot afford management companies but whose members do not have time to do the financial management. We can also assist with administrative items - like letter writing etc, and online file management. We charge much less than management companies! All reports are published online for owners to see. We are in the process of building great online tools as well. Check us out www.GELLERBRIDGE.com

Feel free to call and discuss!

We love helping self-managed HOAs make order out of the chaos.

thanks!
Hadar
310-435-4419

GlenL (Ohio)
Posts: 5,491

Posted:

But Hadar how can anyone trust you or the company you are shilling for, when you resurrect two year old posts in order to SPAM the group? If you can't follow the simple posting rules, why should anyone trust you with their business? How is anyone supposed to trust that this is not some type of a scam to get access to the HOA bank accounts or members personal information so you can perpetrate any number of crimes? If you don't act honorably one place, why expect you to behave honorably elsewhere?

Studies show that 5 out of 4 people have problems with fractions

LarryB13 (Arizona)
Posts: 4,099

Posted:

Hadar,

Glad to see you that you are out of prison!

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