Are you planning to self-manage your HOA? Wondering what to do to avoid any mistakes, and what tools to use in the process?
As of 2022, almost 74 million Americans live in HOA communities. These communities come in all shapes and sizes, of course. From budget to luxury, from land leased to resident-owned, and from really small communities of a few hundred members to large neighborhoods with thousands of members or more.
And obviously, their needs and resources are different too and so is the way you manage them.
So if you are thinking of self-managing your homeowner’s association, and are looking for advice on how to do it, you have come to the right place. In this article, we are going to discuss:
So, let’s do it.
The fundamental trait of a self-managed HOA is the absence of a hired HOA manager or a management company to manage its functioning. A self-managed HOA purely relies on voluntary services from its residents and members.
As a result, the are a few factors to consider about a self-managed HOA:
Homeowners having complete control - One of the greatest benefits of a self-managed HOA is that the community members have total control over how it functions. As we discussed earlier, all communities are different and a management company may have standard procedures for how to manage a community.
But if your HOA is self-managed and you execute things well, all community members feel heard and the community makes their unique identity over a period. It can also result in better community bonding which can make a lot of things easier.
In-house problem-solving 24x7 - An HOA’s functions include not just financial and legal management, but also the protection of the health, safety, and welfare of the community. And a disaster or crisis situation may call for proactive preparation and rapid response.
No management company or manager can be available for your community 24x7. They are professional services and are available to you within professional hours.
If you are a self-managed community though, the community members can take rapid action and save precious time.
Budget-friendly, especially for smaller communities - To hire a management company or an HOA manager for your HOA comes at a monthly cost. The cost of management services varies with the kind of management you want - full-service, remote, consultation, etc.
Avoiding this cost may be the biggest benefit of running a self-managed HOA. We say ‘maybe’ because not hiring a professional does have a flip side also, which we are going to talk about now.
Risk of legal non-compliance - The biggest piece to watch out for in HOA management without a doubt is legal compliance. You have to not only comply with the state-specific HOA laws but comply with them in time.
Unless the community volunteer is extremely resourceful and intelligent or has a background in say law firms, there is every possibility of non-compliance. Non-compliance can mean anything from monetary fines to inviting lawsuits from the government.
There can also be disputes between individual members and the HOA that can invite lawsuits. The person in charge has to make sure that he is covering all possible legal ground to avoid such situations and that is the toughest part of an HOA operation.
Disputes within the community and HOA - With a self-managed HOA you can run your community the way you want. But it also comes with the lack of a neutral party, which sometimes is indispensable when it comes to a dispute between the community members themselves.
There can even be a dispute between the HOA and a member of the community, which also calls for a third party for efficient resolution of matters.
Mis-management or overworked HOA members - Running an HOA is a full-time job, as there are multiple duties and responsibilities within one area of work. The many areas of operations are:
Now, the members who are responsible for these functions can either find it difficult to perform as they have other full-time jobs and responsibilities. Or they can become careless about their duties that will land your HOA in problems for sure.
Absence of one point of contact and so transparency - Even if you are doing everything right, the absence of one point of contact in an HOA can create a lot of confusion. It can also lead to a lack of transparency in the running of an HOA and the information being available to the members.
Creating hierarchy within the community is also not the answer, as it will invite power issues and more disputes.
So, how can you run a self-managed HOA keeping in mind the pros and cons of the set-up? Let us get to it in detail now.
A good HOA software can take care of a bunch of things, and all you have to do is learn the tool to start doing your work efficiently without struggling on a day-to-day basis.
In fact, a dedicated software will help you:
Most importantly, such software will be easy to use. As a result, you will be able to focus on actually managing the association, rather than focusing on data entry and management.
Here’s one example of how a HOA software looks like. The image shows a dashboard with various projects and activities within the HOA.
(A HOA software dashboard showing the status of various projects in the community.)
A strong HOA platform like HOALife, pictured above, will allow you to:
Take a look at how easy it is to self-manage a HOA with a dedicated software:
(HOALife document repository dashboard giving everyone involved quick access to all HOA documents)
(Architectural requests dashboard in HOALife, allowing you to manage such requests with ease)
Even the best tools are not going to work if the wrong people use them. So, as the next step choose the right people. Focus on people who are dynamic, committed, and who understand the serious nature of running an HOA.
If possible, choose people who have some respective experience in the area of operation they are going to look after. They also should be good time managers and leaders, so they are able to operate in a sustained manner with a positive attitude.
Once you choose the team, every person should act with the understanding that they are working for a very real and professional HOA board of directors. Unprofessional attitude can land the board in trouble, while professional attitudes can mean a seamlessly running HOA association.
So do things that a professional board member will do beyond board meetings, like:
However well you may be functioning as a self-managed HOA, disputes are bound to happen. They are relatively difficult to manage also, as there is no third-party involved, and parties involved may look at it as a personal dispute.
But it is not. It is a dispute between the board and an individual member.
Keep a professional outlook when dealing with such situations. Do not be afraid of confrontations and do not worry about people getting upset. A self-managed HOA’s duties are no less than a professionally run HOA, and so you have to do whatever it takes to perform them.
Just like the members of your community, the HOA also has to abide by the rules and regulations laid out in the governing documents. The governing documents typically involve:
The HOA members must be well-versed with all the governing documents and must turn to them when in doubt. This itself can avoid a lot of problems that may happen because of simple ignorance of such documents.
Last but not the least, there is a reason why people go through several years of study before becoming a lawyer or a financier, or even an association manager. Sometimes you have to turn to experts.
There can be things like annual reviews, audits, etc. that are compulsory in your state. Your HOA may be facing lawsuits, or there may be specific kinds of disputes that keep cropping up and you need to deal with them, or at least learn how to.
Or it can also happen that you are able to take care of everything, except one particular area, like financial records and there is no competent person in your community.
Never hesitate to seek professional advice in such cases, because cost savings in the short-term can cost you multiple times more money in the long run.
Remember that you have different options for hiring services. You can either hire a full-time service from an organization like a HOA accounting firm, use them on consulting basis from time to time, or even seek support remotely. There are options available for every budget out there.
And that’s it!
Now you have a great deal of information about what a self-managed HOA is, and whether that is the way to go for your community. You also have a fair idea of what to do and what not to do, to run a self-managed HOA.
We wish you all the best in whatever you choose. After all, it is all about the choices you make.