Many homeowners associations choose not to hire a professional HOA management company. But, self-managed associations can face many struggles along the way.
Community management can come as a challenge, so much so that many associations employ a professional management company for help. But, there are also a lot of associations that opt to take the self-management route either due to budgetary constraints or simple preference. If your association is the same way, then you will benefit from following the tips below.
Every homeowners association has its own set of governing documents that must be followed. This includes the association’s bylaws and CC&Rs (Declaration of Covenants, Conditions, and Restrictions). To ensure the success of your association, it is imperative that you familiarize yourself with these documents and their contents.
For instance, your CC&Rs contain important information concerning your property. They outline what you can and can’t do as well as any consequences that may arise following a violation. Knowing what these rules are will help you enforce them more effectively and in a consistent manner.
Additionally, you must familiarize yourself with the laws that affect your HOA. Professionally managed associations can usually rely on their management company for this, but self-managed associations can’t do that. Knowing the federal, state, and local laws that apply to your association — such as the Fair Housing Act — can help you stay away from potential liability.
Because self-managed associations depend solely on their HOA board, it is imperative that yours functions like an effective one. Do the things a good board would do such as preparing for board meetings ahead of time, creating and implementing rules, and staying on top of maintenance tasks. As a board member, you have certain responsibilities to uphold, and performing your duties is a surefire way to have a well-operated association.
In addition to this, a well-run board should present a united front. Even if some board members disagree with a certain decision, if that decision won the vote, all board members should support it. This will give residents a good impression of your board as well as peace of mind.
A homeowners association requires constant maintenance to remain in proper condition. For the board, that means scheduling maintenance work and finding vendors to perform them. The same goes for projects and major improvements within the community.
Because these projects and maintenance work can overlap, your board must plan ahead of time and know-how to prioritize. Urgent projects and repairs should always go first. As for vanity projects or less urgent beautification projects, those should only take place once all urgent matters have been resolved.
Your HOA board should prepare the annual budget early on, making sure to account for every possible expense. It is also important to budget conservatively and take the previous year’s actual expenses into consideration. But, this isn’t the only time you should go through your budget. Make sure to check back on it throughout the year to see if anything needs adjusting.
Apart from planning your budget, it is equally integral to stick to your budget. Remember that you only have a set amount of money to work with, and splurging on an unnecessary expense can spell financial disaster for your HOA.
In addition to this, your HOA board should also make sure there is enough money in the reserve fund. Your reserve fund is set aside for planned major repairs, replacements, and maintenance in the future. Thus, keeping it fully funded (or, at least, sufficiently funded) is essential to avoiding sudden dues increases or special assessments.
Much like a business, self-managed associations should also keep accurate financial records. This should be done religiously and without fail. Record every financial transaction the association makes. This way, you can keep track of the association’s cash flow and avoid potential problems. It also creates a culture of accountability within your HOA board.
Communication is vital for every self-managed association, whether it’s among board members or between the board and the residents. Board members should always keep each other in the loop, leaving no one in the dark.
In the same way, board members should constantly communicate with residents. If there are any changes or updates, inform them immediately. Use multiple communication channels to ensure you get the message across. Communication, though, is a two-way street. As such, you should also make it easy for residents to reach you. This way, if they have any concerns or feedback, they can pass it on to the right people without having to jump through hoops.
You don’t always have to hire an HOA management company. Sometimes, seeking the advice of professionals is enough to guide your self-managed association. Don’t be afraid to ask for help when you need it. If you have a landscaping issue, ask a professional landscaper for assistance.
Financial management and law are two areas of community management most self-managed boards struggle with. Fortunately, there are many companies and independent professionals you can turn to. If you have legal questions, seek counsel from an HOA attorney. Financial management companies also provide assistance with things like bookkeeping, online payments, accounting, or even just offer financial advice.
Serving as a board member for self-managed associations is a difficult undertaking. You dedicate a lot of time to the job but rarely receive any appreciation from fellow residents. Still, it remains an essential fixture of any homeowners association and is even more invaluable for self-managed ones.
If your board lacks the time or experience required for successful HOA management, though, perhaps it’s time to call on the experts. Browse through our online directory today to start looking for an HOA management company that fits your needs and budget.