What’s Included in an HOA Manager’s Fee?

Homeowners Associations (HOA), are typically volunteer run and often a source of frustration for homeowners. The time dedicated to managing the daily business of bookkeeping, scheduling, and communication can be a challenge.  Additionally, lack of expertise in these areas and in real estate in general can leave the HOA exposed to undue risk, and growing costs.  For these reasons, many homeowners contract with a professional HOA management company.

Understanding the services and value a professional management company provides is key for HOA’s evaluating their management options. Here are some of the highlights:

Administrative Support
one of the most common misconceptions by HAO boards is the amount of volunteer hours expended in properly managing daily administrative tasks in support of the HOA.  A quick review would uncover hours of time associated with dues collection, bookkeeping, filing, and legal documentation, processing new residents and those moving out, invoicing, reporting, and banking. On a recurring basis, volunteers also schedule and coordinate the details for all meetings including proxies, agendas, and meeting minutes. Utilizing the professional skills of an HOA management company can alleviate the need for residents to spend hours each week on these items.

Enforcement of HOA Rules
Working through issues related to rules and regulations is often challenging. The situation can become even more problematic when it’s neighbor vs. neighbor. Rules and regulations are generally well-documented in HOA governing documents, but issues often arise that need attention. A management professional offers expert conflict resolution skills and provides a degree of separation and degree of separation for all parties involved.

Budgeting & Financial Guidance
Managing the finances and creating budgets for one household can be a daunting task for many. Consider doing the work for your entire neighborhood? The work goes beyond basic accounting skill and includes analyzing expenses, projecting future costs, and determining appropriate dues or fees for homeowners.  A management company will complete those tasks and provide financial guidance to the HOA board and homeowners regarding budgetary matters, helping them understand the financial implications of decisions and ensuring fiscal responsibility.

Managing Insurance Needs
HOA managers are tasked with obtaining and maintaining appropriate insurance coverage for the community. This includes property insurance, liability insurance, and other types of coverage as needed.  They handle insurance claims and ensure that the community is adequately protected against risks such as property damage, accidents, or lawsuits.  In all of these areas, the full resources of a management company provide expertise and buying power that individual volunteers can’t match.

Effective communication is essential in a homeowners association to keep residents informed and engaged. HOA managers serve as a central point of contact for communication between the board, homeowners, and outside parties.  They distribute important information, such as meeting notices, rule updates, and community announcements, and address homeowner inquiries or concerns in a timely manner ensuring everyone is on the same page.

Vendor Management
HOA managers are an invaluable resource when it comes to bidding work and managing vendors and service providers to fulfill the needs of the community. Most commonly, landscaping, snow removal take priority. Utilizing the procurement services of your HOA manager these services will be bid with a number of other projects to obtain the best pricing for everyone. Additionally, based on the larger scope of the relationship between vendors and your manager, your request are likely to be met in a timely manner and thoughtfully addressed.  Regular reporting on performance ensures that work is completed to satisfactory standards.

Capital Project Oversight
Capital projects including major repairs, renovations, and infrastructure upgrades require expert planning and oversight. These projects are typically large scale and have a direct impact on property values and quality of life. It’s helpful to an HAO board to have an HOA manager oversee these projects from inception to completion.  They work with the board to develop project scope and plans, solicit bids from contractors, obtain necessary permits and approvals, and manage the project timeline and budget.  Throughout the project, HOA managers communicate progress updates to homeowners and address any issues or concerns that may arise.

As you can see, the fees charged by HOA managers can deliver significant value back to the HOA. A well-managed residential neighborhood delivers a very high quality of life, enhanced property values, and with the help of a skilled professional can eliminate some of the issues individuals face as volunteer board members.

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