Homeowners associations consider hiring an HOA management company all the time. This is because hiring a professional organization helps in several different ways. Let’s discuss all its benefits and how your community can hire an HOA management company.
Reasons for Hiring an HOA Management Company
Why hire a HOA management company? Professional management companies take over most of the board’s daily responsibilities. Hence, there are many benefits to hiring an HOA management company, including the following:
1. Complete Focus on the HOA
Self-managed associations consist of a board of directors who work on a volunteer basis. While this may be effective for smaller communities, it can be difficult when an HOA has many residents and amenities. The board may only sometimes have the time to focus on the association as they have their own lives to worry about.
In contrast, HOA management companies work full-time and can give the community their full attention. It’s their role to handle the community’s daily operations. Hence, they’re usually available round the clock to handle emergencies or urgent concerns. With a management company, the HOA won’t miss a beat or forget to handle any community issue.
2. Better HOA Systems
The HOA board must implement efficient HOA systems to help the homeowners association run without a hitch. However, most board members must have the right background to implement these kinds of systems. They won’t always know what services, vendors, equipment, or software they need.
This is where hiring an HOA management company comes in. That’s because management companies often have years of experience handling communities. They know what communities need and the resources that might help them.
Moreover, they have established technology, systems, and a network of professionals. Implementing these systems is often a breeze when an HOA management company is involved. The HOA will start running in no time at all.
3. Professional Financial Management
One of the hardest parts of running an HOA is financial management. It’s not everyone’s forte, as not all the board members or homeowners will have the right experience. One wrong move in this aspect can result in devastating financial consequences. If the board doesn’t plan well, they may need to hike fees, impose special assessments, or take out a loan.
That’s why many communities outsource at least their financial management needs to a third party. An HOA management company can help as they’re experienced with HOA-related transactions. They know what to budget for and how to avoid financial disaster.
Moreover, having a management company eliminates the awkwardness of having the board collect dues directly from homeowners. This reduces the risk of souring relationships and minimizes favoritism. Furthermore, management companies are better able to track accounts and delinquencies.
4. Neighborhood Appeal
Homeowners associations are responsible for enhancing property values by keeping the community well-maintained. They often have better aesthetic appeal as they provide more amenities and well-kept common areas.
However, this can be hard to manage if the HOA is big or has many facilities. An HOA management company can help by caring for the community’s repair and maintenance needs. They can hire vendors for landscaping, cleaning, and performing routine maintenance.
Furthermore, they can help the HOA search for necessary vendors more easily. This is because management companies often have a list of reputable vendors they’ve already worked with. HOAs can often find a reliable vendor from this list of contractors.
5. Legal Experience
HOA board members need to be more well-versed in local or state legislation. That’s why it can be useful to hire an HOA management company. They can help the community comply with the law as they should know which ones apply to HOAs. Moreover, they stay on top of any new legislation.
Apart from this, HOA management companies may also have a network of lawyers and legal advisors they can refer to. As a result, they can recommend the best legal professionals for the HOA to work with.
6. Fair and Consistent Enforcement
HOA management companies are more consistent when it comes to rule enforcement. That’s because it’s their job to familiarize themselves with the governing documents. Moreover, their dedication to the HOA means they pay more attention to potential violations.
Apart from this, they’re less likely to be biased regarding enforcement. Unlike the board, the homeowners are not their friends or neighbors. They have no connections that may lead to favoritism or selective enforcement. The HOA management company won’t feel shy or apprehensive about giving out violation notices or charging fines.
How to Hire an HOA Management Company
Hiring an HOA management service company can be a daunting task. After all, associations that have never hired one often don’t know where to begin. How can you go about this process? Here are some steps you can take.
1. Consult With the Community
The homeowners association members must be notified about the HOA’s intention to hire. They have a right to know the board’s plan, as it could affect their monthly fees. Schedule a meeting to discuss the decision with the homeowners.
Moreover, make sure the homeowners have an opportunity to voice their thoughts and opinions. Hiring an HOA management company is a community decision. If the homeowners don’t have a say, it may lead to resentment.
2. Decide on Necessary Services
Each HOA will have different needs. However, they must decide which services they want to avail of when hiring an HOA management company. The most important ones include accounting, collections, community maintenance, vendor management, legal advice, and rule enforcement.
However, some may provide extra services like automated work orders, website management, digital payments, and board education. Make sure to list down which services are optional and which ones are non-negotiable.
3. Narrow Down the Choices
Once the non-negotiable services are set, it’s time to canvas for HOA management companies. HOAs can do this by conducting a quick Google search or looking through online directories. It’s best to narrow down options based on location since nearby companies are more readily available.
Once the board has a list of 4-5 companies, reach out to each and ask for quotations or packages. Ask questions based on the list of necessary services. Afterward, they should reply and give the board an idea of their focus. Review their answers and pick three of the best options.
4. Finalize an Agreement
To finalize an agreement, asking for a list of expected costs from the management companies is important. This can help the residents understand how the money is being used. Also, review the list and ensure they meet all the community’s needs.
Afterward, it’s best to review the agreement with a legal advisor. Remember to understand both parties’ obligations and responsibilities clearly. The board can also negotiate some of the contract’s terms if necessary. Once the contract is finalized, it’s time for signing.
The Key to Successful HOA Management
Hiring an HOA management company takes a lot of work. There are a lot of factors to consider and options to choose from. The board chooses wisely, as contracts last for at least one year. Otherwise, it may be a waste of HOA funds.
Are you looking for a proven HOA management company? You can’t go wrong with First Equity Property Management. Call us now at 650.349.7233 or contact us online to request a proposal!