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ElizabethP2
(Texas)

Posts:2

07/15/2008 12:14 PM
Wondering if all HOAs use a management company or if any take those duties on themselves. I'm in Texas. Thanks!

JohnO6
(Georgia)

Posts:52

07/15/2008 12:58 PM
The short answer is - Yes, some HOAs embark on self-management. The much longer discussion is whether it is desirable for your particular community or not. Rather than re-hash such a discussion, I would suggest you search this forum for "self management" topics/threads where there is a healthy discussion about the pros & cons and the multitude of community specific factors that enter into the decision.

SteveN
(South Carolina)

Posts:2

07/15/2008 2:39 PM
Self-governance is not a new concept in this Country and the requirements to be successful are not new either. Knowledge and dedication are essential; understanding your By-Laws (the document that regulates “how the Association will conduct its business”) and your Covenants (the document that represents the contractual agreement the members have with each other) is a must! The up side is that self-management (governance) is a lot less expensive, and provides for more community involvement by necessity. The down side is that you come home from work to work. If you are a dedicated, self-less, knowledgeable person of good character with a strong sense of community and understand the meaning of fiduciary. Then I would recommend self-management. S. Nehez, President Princeton Place H.O.A. Inc. 8th and final term

MaryA1
(Arizona)

Posts:1562

07/15/2008 3:09 PM
Well said, Stephen! Depending upon the size of your community, self-management may be the most practical way to go. However, even if your community is very small, if you cannot get enough dedicated, hard-working individuals to serve on the BOD, then self-management will not work. When I decided not to run for re-election, my former HOA of only 49 homes was forced to hire a mgmt co for bookkeeping services only. There was one other member who was willing to serve as treasurer but was not qualified and several others who could have handled the job just weren't interested.

SidneyP
(Florida)

Posts:269

07/15/2008 3:57 PM
IMO, self management can very well be handled in a small HOA....I have pleaded for our Association to do this last year when I found out just how bad off we were financially....We got that way by a President(w/her appointed cronies) and a lousy MC. You have read of my many complaints, financial harm done to our community. I thought MC's were qualified and were suppose to give guidance to the Board, who are some likely not very knowledgable...Since I have been back on the Board I have found so many wrongs done by Management, who we are paying highly(double what we were paying) for. I found our taxes paid late, no vender files on record or sent to the IRS, Reserves still not funded and yesterday I looked over the insurance policy, we were only insured for 30 units, we have 77 units. Our policy went up $1434. dollars. My question to the MC/Board was, why didn't you catch this? They acted so shocked..duh.. So, my friend, don't think just because you have a MC, that your Association will run any better. I know I could do this job of self management with ssociation will run any better. I know I could do this job of self management with a few "good" Board members. I am retired and spend at least 4 hours every day learning and checking files. I am semi-handicapped and I fine this job of treasurer very fulfilling to my welfare....I feel so sorry for out HO's who know nothing of what is going on (partly their own fault), they are in hard times like everyone else. At a meeting last night the President had her Board vote on hiring a very expensive attorney and once again firing and hiring yet another lawn service. My vote was a nay on both....Had we self managed, we would have been out of the red and maybe even had a little left over to do some maintenance that has never been done in the 2 1/2 years the HO"s (thats a laugh)this President has had control. We certainly couldn't have been any worse....So if you are or have that motived person to run your Association go for it, use the saved money wisely.

MaryA1
(Arizona)

Posts:1562

07/15/2008 4:08 PM
Sidney, You said: "So if you are or have that motived person to run your Association go for it, use the saved money wisely." I agree, but only if you pluralize the word "person". It take more than one motivated person to effectively run the BOD. One motivated person taking up the slack of all the others unwilling to do their jobs gets old fast. I know; I've been there, done that and my HOA only had 49 homes! I think self-management is great. But, aside from needing all the board members to be motivated, they also need to be up on state laws and know the gov. docs inside out. There really is alot of work involved to do your job effectively. Most people either don't have the time or don't want to make the time. Then the other thing to consider is that it is a thankless job. Don't be expected to be congratulated for a "job well done"; instead expect to recieve complaints about just about everything the BOD does. Everyone may not complain about some things, but someone will complain about everything. If the HOA is small, the board members will hear it all -- word gets around in a small community, you know!

SidneyP
(Florida)

Posts:269

07/15/2008 5:27 PM
Mary--- {quote Sidney}"I know I could do this job of self management with a few "good" Board members." I know I couldn't do it alone. Mary, we have a few motivated members but this President won't let them volunteer. This is exactly what she did to me, when I volunteered many times. I finally went after proxies and was elected to the Board March 31st...Do you know since then I have already received two e-mails from the President saying she was going to have me removed from the Board. (nothing was mentioned about this at the meeting last night) In fact,in several discussions, the MC said, "Sidney is right"..I just pray that in Jan at our next election, we can get in some of these good people...Truthfully, I'm not sure we (the Association can be saved at this point. We are so far in the red and I think HO's will refuse to pay a "Special Assessment" and maybe even the assessment fee increase...I think we are a hair away from bankruptcy. Even if we got rid of the President, we would still be stuck w/the MC she hired costing double what we were paying and the President signed a three year contract...The problem is the Assiciation can't afford her company and they are no better than the last two MC's some may not agree but I have always said, the MC is only as good as the Board in charge....In our case self-management is the only way to go to allow us to get back on our feet. I spent hours and hours going through all the financial files (2006/2007/2008) and compiling spread sheets and other files of interest to give to any HO that showed up to the meeting last night. HO's have never been sent any files, only the few(4/5) that showed up at the Annual meeting gets any files at all. I had pulled articals from the net about the Reserves and how important they are, hoping it would stir up some input as to why our Reserve hasn't been funded since April/07. HO's need to know "why" their Board (President) has placed them in such a financial bind. I know I wouldn't have filed our taxes late, got vendor information and would have saved the Association $200. for a CPA to fill the taxes. I have never seen a form any simplier for a small community w/ no amenities. of which we have none. How hard is it to get rid of a MC?..This President signed a three(3) year contract w/a three(3) month cash out cancellation. Isn't there a way were can get out of this since they have made so many mistakes in handling our affairs?

KarenS11
(Florida)

Posts:132

07/15/2008 5:56 PM
100 townhomes, quarterly assessments, no complicated ammenities. We have a management company.

MaryA1
(Arizona)

Posts:1562

07/15/2008 6:42 PM
Sidney, You asked: "How hard is it to get rid of a MC?..This President signed a three(3) year contract w/a three(3) month cash out cancellation. Isn't there a way were can get out of this since they have made so many mistakes in handling our affairs?" If you assn wasn't in such bad financial shape I would suggest paying the cancellation fee. If the manager is making mistakes it should be reported to the mgmt co. If they refuse to assign a new manager that could be reason to have the contract cancelled. But, since the Pres likes the manager I'm sure his/her misdeeds have gone unreported. Therefore, it appears you're stuck with this mgmt co/mgr for another 3 years. If all the other board members side with the Pres, there's not much you can do on your own. Hopefully there will be a change at the next election. Then the board can document all the wrong-doings and complain to the mgmt co.

GlenL
(Ohio)

Posts:1223

07/16/2008 1:43 AM
Posted By ElizabethP2 on 07/15/2008 12:14 PM Wondering if all HOAs use a management company or if any take those duties on themselves. I'm in Texas. Thanks! Elizabeth if it's done properly a self-managed HOA can be just as financially healthy as one with a Management Company or just as financially un-healthy. But self-management takes knowledge, time and effort...if you don't have dedicated volunteers and resources to do things correctly, things can go downhill very fast. Whether your association consists of 6 units or 6000, it is a business and the BOD has the fiduciary responsibility to act reasonably and properly. You need to ask if you have people with the dedication for the long-haul to make self-managing work. A group of dedicated volunteers can quickly dwindle to one or two people doing all the work and you need homeowners willing to step up and participate as the volunteers move on. Don't have any one person do too much; burnout can occur and there are often only a handful of good volunteers. If you put the proper policies and procedures in place to make transitioning from one Board to the next easy the work is not that hard but understand that there is work involved and it must be done. Also you need to check your CC&R's to find out if a MC is required and may even need to check everyone's mortgage. Someone posted a clause here recently from his mortgage that prohibited doing away with the Management Company.

MicheleD
(Kentucky)

Posts:1445

07/16/2008 5:45 AM
We have been self-managed for about the last 10 or 12 years. We have only 300 single-family, detached homes, and no amenities. So you would think it would be pretty simple. But it's really much more work than people realize. We are interviewing management companies now because, quite frankly, after 10 to 12 years of only 3 of us "doing the job," we're pretty darn tired and want to have some free time to actually enjoy our neighborhood. We've had various people throughout the community step up to the plate over the years, some of them because they thought they could "do a better job." Those are the ones usually stop attending meetings after the first 3 or 4, then we never hear from them again. And I mean never. They realize quickly that it's not just a matter of mailing out a few bills. Over the years there are 3 of us who have remained on the board in various positions the whole time. Why? SOMEBODY has to do the nuts-and-bolts stuff. And that "nuts-and-bolts" stuff is pretty extensive when you realize that you have to keep ongoing files and records on each and every aspect of the "stuff" -- assessment tracking (over multiple years and multiple owners sometimes), violation notices (and prosecution of hard-core cases, sometimes), vendor management (including bidding and rebidding), CC&R re-tooling (periodic review of governing documents and amendment processing, through voting and filing), tax forms and filings, capital projects, and on and on. So unless you have a core group of people who are dedicated to ensuring that the business of the HOA is handled in not only a way that allows functioning year-after-year, but that can also stand up to any court challenge, I would recommend considering a management company to assist. That "nuts-and-bolts" can get pretty overwhelming after a few years. Especially if you get board members in from time to time who really aren't as interested in keeping up the records of their area of responsibility. It gets pretty frustrating having to reconstruct a year or two's worth of files sometimes.

JoeK1
(Michigan)

Posts:28

07/16/2008 6:30 AM
Self-management is a viable option for many HOA's and is almost a necessity for small ones (i.e. - less than 30-40). But, no matter the size of your association, it is a legal entity and should be conducted as a business. The BoD responsibility “to act reasonably and properly” in conducting this business will help you answer the question of whether or not you can/should self-manage. I would consider the following as pre-requisites for self-management • Dedicated volunteers – Reliance upon non-paid volunteers to run your Association business can leave you exposed on several fronts. The biggest problem can be to get someone qualified to even volunteer in the first place. For many, this would be a part-time job that was taken because no one else would volunteer. • Basic business and leadership skills – A self-managed BoD will have to deal with budgets, insurances, association covenants, conditions and restrictions (CC&Rs), handling disgruntled members, solving disputes, conducting meetings, and a host of other responsibilities. Your BoD should very carefully their interests, qualifications, limitations and whether or not they are willing to perform this role and put in the necessary energy and time that comes with the job. • Knowledge of what to do – Even for those BoD members familiar with business practices, managing a condo or homeowner association has its own set of unique challenges. Whether you are a mature association or just starting off, you will have to pay attention your association's management infrastructure (business processes, how decisions are made, communication system, etc). You will have to understand all your governing documents, as they set up what you legally can and can not do as a BoD. Finally, you will need to know when to act or react to multiple situations as they arise. This is not as daunting of a challenge as it might first appear, as there are books and numerous resources available on the web to help you along this journey If these pre-requisites can not be met, then the BoD should consider hiring a management company to assist them. Even if that is the choice, this does not have to be an all-or-nothing proposition. A savvy BoD will only contract those services that are absolutely needed. For example, you might choose to use a local accountant to handle the billing of the monthly assessments and the payment of basic bills. JoeK www.condopresident.com

JohnK3
(Pennsylvania)

Posts:243

07/16/2008 8:53 AM
We're now one year into self-management. 21 SFDs, 30 acres of common area, 4 ponds, one fountain. 3 "dedicated" individuals on our Board. 18 essentially apathetic HOs. 84 dues to collect, one insurance policy, landscaping and utility bills to pay. The upsides: Saving about a quarter of our dues that went to an MC which wanted to always do things their way, or ignored the Board's requests. Personal satisfaction with our volunteered work. Reserves in great shape. No dues increases, and might even lower them for 2009. The downsides: Much more effort than we expected to get things up and running. More effort than we expected to keep things running. Personal dissatisfaction with the Apathetics (except our delinquencies are now zero). As our S/T, I do most of the lifting, probably 20 hours minimum a month. Can it be done? Sure. If it doesn't work out, can an MC be brought back? Sure. Bottom line: If you have enough folks willing to make the effort, give it a try. If not, save yourselves the hassle.

EllenS1
(Florida)

Posts:321

07/16/2008 4:14 PM
John, I'm glad things are working out for you. But the pitfalls are many. Volunteers being burnt out, moving, getting ill and no longer able to serve which means you will have to find a replacement to fill that position. Having to contact attorneys to learn what you do not know. Keeping up with recent legislation that may affect your documents. Disgruntled owners contacting you at all hours of the day (who contribute nothing) and lots of criticism. A thankless job to save everyone some money. Even serving on a board with a management company I sometimes wonder why I volunteered again. One owner asked why "we" couldn't just collect the assessments. How little he knew and naturally he did not volunteer to collect the assessments or to follow up on owners who did not pay. It's the same old same old.."they" should do something or "we" should...One time faced with an owner who asked why "they" didn't do something I told her you are "they".

KirkW1
(Texas)

Posts:685

07/16/2008 9:10 PM
We kind of discussed this at our last BOD meeting. And here is my take on it: We currently pay $5 per house per month to the management company for base services. Then other services are added onto that cost and. Last year the total cost per house was $64. For that money there is someone to talk to homeowners, do property inspections (and the follow-up on such), and other tasks that can eat up a lot of volunteer time. The cost per unit is very much affected by the number of units in your development. In our case we have about 300 single family houses. While I am thinking that we should examine other management companies, I don't want any part of going the self manged route. Here are the basics of why: 1) I don't care to have to go around policing my neighbors. 2) I care even less to have the neighborhood busy body appointed to this task. 3) I also like letting someone else deal be available for questions and answering the phone. 4) You can see the difference between our neighborhood and the ones without management very quickly.

JohnK3
(Pennsylvania)

Posts:243

07/17/2008 10:07 AM
Posted By EllenS1 on 07/16/2008 4:14 PM John, I'm glad things are working out for you. But the pitfalls are many. Volunteers being burnt out, moving, getting ill and no longer able to serve which means you will have to find a replacement to fill that position. Having to contact attorneys to learn what you do not know. Keeping up with recent legislation that may affect your documents. Disgruntled owners contacting you at all hours of the day (who contribute nothing) and lots of criticism. A thankless job to save everyone some money. Even serving on a board with a management company I sometimes wonder why I volunteered again. One owner asked why "we" couldn't just collect the assessments. How little he knew and naturally he did not volunteer to collect the assessments or to follow up on owners who did not pay. It's the same old same old.."they" should do something or "we" should...One time faced with an owner who asked why "they" didn't do something I told her you are "they". Ellen, Yes, the pitfalls can be many. We (on the Board that took us self-managed) knew that going in. But when the PM proposed its 2008 contact, upping dues by 14% to cover nothing more than their increased management fee (which would have eaten up about 1/3 of our budget), we decided amongst ourselves that was crazy. And it's not all about saving money; we were more intent on allocation of those monies. $6K "extra" out of a $20K annual pot is a bunch to be diverted to improving/funding our common areas and reserves. So far, so good. Virtually all communications with Membership are via e-mail and as there're really very few probs amongst HOs that involve the Board, no late night communiques. And as previously noted, if our experiment tanks, we can always opt out of self-management.

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