May 07, 2019
Does Your HOA Need Professional Property Management Help?
Not all property investors want to be a landlord, tasked with collecting rent or overseeing repairs. When investors want a hands-off approach to their properties, due to lack of time, interest or skills, they usually hire a property management firm to take care of the daily business.
Things aren’t always as cut and dry with Homeowners Associations (HOAs).
These associations are formed when a group of condo owners or homeowners share the costs of routine building maintenance, landscaping costs, repairs and upgrades to common areas or on-site amenities. HOAs have some distinctive challenges in terms of property. It’s up to the association to apply the rules and covenants of the HOA (like how high you can build a fence, or when you can put your garbage out) as well as oversee maintenance and collect HOA monthly fees.
In smaller HOAs, like a six-unit condo building, it can be easy enough for the one person to volunteer to collect the property fees and another gardening-inclined resident to mow the lawn and water the flowerbed. Everyone else might chip in to clean the common entry and stairwells. At yearly HOA meetings everyone would decide upon if they wanted to undertake a project or upgrade, like replacing windows or painting the communal hallways. Smaller HOAs are little communities that can usually be run by the property owners effectively enough and cost efficiently.
When it comes to larger gated communities or high-rise condo HOAs, the challenges become compounded. With more people, the tasks multiply. Usually a volunteer Board of Directors is elected to oversee maintenance, administration, HOA fee collection and ensuring that the rules of the HOA are being followed. And, it’s a lot of work! Trying to handle it manually usually ends up in frustration.
Common Challenges for Larger HOAs
Typically, many HOAs struggle with:
Enforcing the Rules: HOAs usually have a Covenants, Conditions & Restrictions (CC&Rs) rule book that lays out how the homeowners community operates. It can cover a gamut of topics like common responsibilities, pet policies, architectural considerations (for example, you can’t put up a fence that exceeds 6 ft.) and resident behaviour. Many HOAs will also charge a penalty fee for any violation of the CC&R rules.
The Safe Sharing of Finances & Board Reports: With more people, there are more financial records, like dues collection and balance sheets. These reports need to be secured, and shouldn’t be stored on someone’s laptop.
Fee Collection: If a HOA is using a system like QuickBooks, while the Board of Directors will be able to see the fees that need to be collected monthly, quarterly or annually, it’s still a very manual task. One that can be prone to mistakes.
Overseeing Maintenance: More people means more maintenance requests. If these repair demands show up in the form of paper-based requests or over the phone, there’s a good chance something will slip through the cracks. Boards also struggle with ensuring good three-way match-up between the request, the requisition and the final invoice.
Communication: From Board elections reminders to holiday greetings, the Board is in charge of communicating with homeowners and keeping their community informed about new regulations, upcoming maintenance and other timely updates.
Technology or a Property Management Firm?
When it comes to a larger HOA, operating through a series of spreadsheets doesn’t cut it. And, when it becomes too overwhelming the Board has a decision to make: Invest in proper technology to run their HOA or hand over this task to a property management firm that already has the technology and experience.
And, much like individual property investors that may opt to hire someone to oversee their rental properties, the decision often boils down to:
Skills: Do the members comprising the Board have a variety of skills, like an understanding of finance, city bylaws, vendor management and maintenance?
Capacity: Being a member of the HOA Board of Directors can be time-consuming. Inevitably, there are conflict with owners when a Board’s decision isn’t popular. Board members put in many hours to see that their duties are being performed diligently.
Interest: Due to the obligations of being on a Board, many homeowners are happy to elect someone else to the position. And, it’s not uncommon to have difficulty filling Board positions.
When the mix of skills, capacity and interest isn’t there, a HOA will often partner with a property management firm to oversee the day-to-day responsibilities. The Board will still set the policies for the HOA, and the property management firm will execute on those guidelines.
For HOAs that Self-Manage
Homeowner’s associations and condominiums can expect quality gains when switching to Property Vista. Whether it amounts to keeping information secure but accessible, automate fee collections, or keeping in-touch with residents on a day-to-day basis property management systems help property managers succeed by giving them more time.
HOA software allows you to use built-in permissions to share information more conveniently, and keep information safer than downloaded and emailed. If you’re interested in seeing how our HOA property management software works, be sure to check out pricing and get a demo.