Self-Managed Homeowner's Associations: Key Pitfalls
Posted on: 31 December 2015Share
If you are a member of a homeowner's association, or HOA, then it might be tempting to have the association managed by the homeowners themselves. The owners already have to deal with the expense of monthly HOA fees and saving money by not hiring a professional management company is appealing. Self management, however, is not always wise. This article takes a look at some of the most significant problems involved.
One of the main problems with having a HOA managed by a group of volunteer owners is the lack of expertise in critical areas. For example, a lot of administrative work is involved and it's crucial to have someone who is experienced in keeping records. In addition, financial expertise is also vital to avoid problems such as billing issues and an insufficient reserve fund. Also, even if some of the homeowners have professional expertise, they might not be willing to lend their skills to the HOA on a volunteer basis.
A professional management company will have people ready to deal with any problems that arise at any time of the day or night. This is not necessarily the case with volunteer homeowners, who might not like having to take care of any unexpected maintenance issues in the middle of the night. Unfortunately, problems don't always occur during business hours and volunteers must be prepared to handle emergencies 24 hours a day.
Perhaps a volunteer staff can handle some of the regular maintenance tasks themselves, such having a local landscape company keep the grounds nice and neat, but what about major repairs? Roof repairs, paint jobs and other major jobs will need to be hired out to an experienced contractor through the bidding process. Management companies have considerable experience with hiring the best contractors at a reasonable price. Inexperienced volunteers might have a more difficult time making certain that the best contractor is hired for major repairs.
Laws and Regulations
It's easy for the volunteers of a self-managed HOA to become perplexed by the complicated set of local, state and federal laws that apply to homeowner's associations. For example, federal laws such as the Fair Housing Act and the American Disabilities Act have various requirements that must be adhered to or the HOA risks facing legal sanctions. Professional managers are thoroughly familiar with all of the relevant laws and are less likely to run afoul of them.
A self-managed HOA might seem like a good idea in the abstract, but is full of practical pitfalls. You and your fellow owners should consider the issue carefully before making any final decision. For more information, contact organizations like The Noble Company of South Carolina, LLC.