Homeowners association can greatly benefit from the services of a management company. Since board members don’t always have the time or expertise, it’s good to have a professional handling essential managerial functions on a full-time basis. But, how much does property management cost? Here’s a closer look at the HOA management fee and how much your HOA can expect to pay each month.
HOA Management Fee: How Much Does It Cost?
The cost of property management services will vary dramatically. Associations must understand that the cost of property managers will depend on several factors. This includes the HOA management company itself, the scope of its services, and the size of the community.
For example, a large HOA community may have numerous communal areas and amenities that require regular attention. The community may have hundreds of homes, as well. This means a large volume of work for HOA management when it comes to collecting dues, enforcing rules, and so on.
An HOA of this magnitude can most likely expect to pay a higher HOA management fee compared to a smaller community with fewer amenities, services, and homes.
Some HOA or condominium property managers may also charge extra for additional services, such as organizing and planning community events, preparing and distributing newsletters, setting up and maintaining the HOA website, and so on. For these services, HOA management fees may be on a cost per unit basis.
What Is the Average HOA Fee?
When looking for new HOA management, it’s important for associations to have an idea of typical HOA management fees to see if it will fit their budget. Since management companies will have different fees, it can be beneficial to compare average HOA fees.
On average, management services typically range from $10-20 per unit, per month. These per-door rates still vary drastically, though, depending on the scale of your community.
It’s also important to consider property management laws in your state, city, or municipality. Some states regulate property management activities, and this may have some bearing on your HOA management fees.
What’s Included in the HOA Management Fee?
Upon choosing an HOA company, the association will have to sign a management contract. This should clearly detail the management services they will provide as well as the HOA property management fees to be paid. Here is a sample breakdown of the HOA management fee:
The initiation fee is what an HOA management company may charge to handle the day-to-day management of your community. This can range from a couple of thousand dollars up to $30,000 depending on the size and need of your HOA.
Monthly Management Fees:
HOAs may also pay an HOA management fee each month. This amount will be clearly stated in the HOA contract.
Extra Services and Charges:
An HOA manager can still provide services that are not initially stated in the contract, but it will come at an additional cost. Make sure to clarify this with your HOA management company so that the association won’t be surprised by hidden costs.
Termination and Transition Fees:
A typical HOA contract lasts for one year. It’s not usually recommended to sign a multi-year management contract unless the association is already familiar with the quality of service of the company. It’s also easier to renegotiate terms with a yearly contract.
If for some reason, the association wants to terminate the management company’s services before the end of the contract, or vice versa, a termination fee will be imposed.
Then, at the end of the year, if the association wishes to transfer to change their management company, there may also be transition fees. Your former company can orient the new management but they will have to be compensated for it.
Services You Can Expect With Your HOA Management Fee
Once your association has signed with an HOA management company, the board can expect assistance with the following aspects:
- Accounting and financial management services
- HOA collections and vendor payments
- Rule enforcement and sending violation notices
- HOA communications (answering phones, responding to emails, homeowner inquiries)
- Scheduling maintenance services and overseeing contractors
- Insurance and tax returns
- Drafting and/or amending governing documents
- Board meeting agendas
Again, the scope of work provided by your management company should be clearly outlined in the HOA contract. This is to set expectations and avoid disappointments for both parties involved.
Does the HOA Management Fee Matter?
When choosing an HOA management company, of course, it is important to look at the HOA management fee. However, it shouldn’t be your only consideration.
It’s important to stick to your HOA budget. But considering the invaluable services of a management company, the HOA management fee may be greatly justified. It can be a worthy investment that leads to the growth and success of your community. So spend time looking at different companies and comparing services and HOA management fees.
- How To Pick An HOA Management Company That’s Right For Your Community
- 12 Qualities And Skills You Need In A Great HOA Manager
- 9 Things You Should Know When Setting Up An HOA Budget