Why Should an HOA Hire a Property Management Company?


As you know as a member of a homeowner’s association, much of the work of an HOA is done by volunteers. Board members and committee members, along with community members, take on projects and plan budgets.

If you’re on the board, you know the misery of asking people to both pay dues and do all the work. HOAs only run smoothly and successfully when someone puts in a lot of hours. Everything from scheduling maintenance to responding to member requests takes someone’s valuable time.

Managing the day-to-day responsibilities of a property of any size is really not a part-time job.

Board members can help themselves and their communities by hiring a property manager. They can alleviate a lot of the headaches involved in both running and belonging to an HOA.

What is Property Management?

Property management companies and property managers help with HOA administration at every level. These organizations and individuals relieve board members of many of the regular tasks of running their associations.

A property management company may have many different levels of service. Your homeowner’s association can hire a full-time property manager or someone who manages multiple properties.

Depending on the size and complexity of your organization, you may need a few hours a week, or 40. Property managers bring their expertise to everything from hiring vendors to enforcing rules and ensuring legal compliance.

What Does a Property Manager Do?

Property managers often take over the day-to-day tasks of running the HOA. These are activities that volunteer board members don’t have time to tackle. A board that consistently asks more of its members than they have time to give is going to end up without volunteers.

Most HOA board members are stretched too thin. There are important areas where a property manager or management company can help.

Financial Planning and Oversight

A good property manager will help you keep your books in order. They manage your expenses and your revenue. Yes, that does mean that some property managers take over the difficult task of chasing down overdue fees.

It becomes the responsibility of the property manager to make sure expenditures are recorded correctly. They will also advise the board when budgets need adjusting. They are your eyes on the ground when it comes to financial oversight.

For many HOAs this alone makes a property manager worth their weight in gold. HOAs have a lot of financial moving parts. Experienced property managers understand HOA financial obligations. They also have the expertise to keep your association on track to achieve its long-term goals.

Anyone who has ever been an HOA treasurer will tell you how demanding and stressful the role can be. Hiring a professional to help adds a layer of accountability and takes a lot of stress off the volunteer board members.

Every HOA board is responsible for carrying out its fiduciary duties. Most new board members are unaware of the breadth of those duties. They are responsible for, at all times, acting in the best interest of the communities they serve.

HOAs can be a little bit of a legal minefield. The board is bound by its governing documents as well as local and state laws. Professional property management helps your board, and your entire HOA, remain in legal compliance with all regulations.

Vendors and Services

A large HOA has dozens of vendors and contractors. Volunteer board members can be quickly overwhelmed by the scope of these working relationships. Few have the experience or connections to make sure vendors are reliable and services are reasonably priced.

The cost of putting hiring into the hands of an overworked volunteer can be considerable. Services may not be performed, or be performed poorly. Building maintenance and repairs may not be up to code. The HOA may be overcharged.

A professional property manager oversees the hiring of outside vendors and approves their work. They use their network of trusted companies to assure the association gets quality services at a reasonable price.

A lot of HOAs question the financial investment of hiring a property manager. Their administrative expertise can save your association a lot of money in the long run. Even in the short term, you’re likely to see your services improve in quality.

Better services equal fewer problems. The fewer problems you have, the less money you spend. You probably can’t pay a full-time property manager with your maintenance and vendor savings. But property components will last longer and homeowners will be happier.

This is a substantial board headache relieved by a property manager. Especially for large properties or HOAs, the management of services and vendors is an ongoing, daily activity.

Homeowner Communication and Relationships

One of the most impossible tasks facing an HOA board is dealing professionally with their friends and neighbors. It is incredibly difficult to resolve disputes, respond to angry phone calls and emails, and enforce unpopular rules.

A professional property manager can take many of those odious tasks off your plate. They are impartial, with no ownership in any conflict. They can help board members steer their way through thorny community controversies.

A property manager can also help you set up electronic communication channels and plan meetings. A full-time manager takes calls from homeowners and resolves minor issues.

Property management is the buffer between the personal aspects of community membership and the professional aspects of HOA board membership.

Why Have Both a Property Manager and an HOA Board?

First of all, your HOA governing documents most certainly require a board. And that board most certainly cannot be replaced by an outside person or company. An HOA board has a stake in the community, and that’s vital to their position.

A property manager doesn’t steer your HOA ship. They help implement and oversee the plans, goals, and decisions made by the board. It’s the daily tasks that get in the way of those activities that they usually manage.

The board decides how much responsibility to give a property manager or management company. Some HOAs decide to have a management company help them out a few hours a week with financial oversight. Others contact a property manager occasionally as an experienced advisor for realistic goal-setting. Many large HOAs reap the benefits of having an on-site full-time property manager.

The board is still responsible for fulfilling its fiduciary duties. They are bound by the rules and regulations in your bylaws and CC&Rs. No matter how much of the daily responsibilities a property manager takes on, the buck stops with the board.

But your board is made up of volunteers. They have jobs and responsibilities outside of their HOA obligations. Piling on too many HOA duties leads to burnout and few candidates to fill empty seats. It also makes mistakes, potentially costly mistakes, far more likely.

The best thing an HOA can do to benefit its homeowners is to get the board the help it needs. Investing in professional property management is like investing in a good lawyer, accountant, or reserve study preparer. These are all experts who help your HOA board make decisions that benefit the entire community.

Property managers allow your board to focus on the big picture. Making your community a great place to live, protecting your property value, and making wise decisions about asset allocation can be front and center. Board members without overwhelming daily chores have time and energy to focus on bettering the community.

Property management also helps keep your board impartial. By acting as a neutral party, they keep board members from feeling pressured by friends and neighbors. They help your HOA operate as it should: like a business.

If your HOA is very small or limited in scope, you may not need a property management company. But if your board members feel overwhelmed by their volunteer positions, it’s time to think about hiring a professional.

What to Consider Before Hiring a Property Management Company?

The vast range of services provided by property management companies assure that you can find one that meets your needs. Some are devoted to full-time management. Others specialize in smaller communities with more specific needs.

When your HOA decides to hire a property manager, make sure they offer the services appropriate for your community. Talk to past clients. Contact references. As in all things as an HOA board member, do your due diligence.

Property management is an investment. As such, your board should discuss how much your association can afford to pay for the service. Take into account the potential savings you may see from efficient management, but don’t exaggerate them or overextend the HOA.

Your board is always responsible for making informed decisions. Hiring a property manager may be the best decision your board can make. It should also be one of the most carefully considered.

By hiring the right property management company you can change the direction of a struggling HOA. You’ll ease the burden on your board members. You’ll have access to financial and legal experience and expertise to help your community grow and succeed.

Best of all? Your board members can once again eat an uninterrupted meal. Priceless.

Related articles...