The Complete Guide to Hiring an HOA Management Company

Approximately 75% of homeowner associations are managed by professional management companies. So, should you hire an HOA management company? This guide to HOA management will walk you through why your association might need an HOA manager, the types of services they offer, and some important considerations to guide your hiring decision. 

Hiring an HOA Management Company: Benefits at a Glance

Hiring a professional property manager for your HOA or condo association is all about bringing consistency and value to you, your association board, and all the homeowners and residents that are part of your community. An HOA management company with the right experience brings professional standards and proven cost-effective methods to make your association more responsive and effective in meeting your community's needs.

A professional HOA management company can deliver the following key results:

What is an HOA Management Company?

An HOA management company oversees the daily operations and maintenance of a homeowners association (HOA), serving as a liaison between the association’s board and its residents. These companies handle administrative tasks, financial management, and property maintenance to alleviate the workload on volunteer board members.

By taking on these responsibilities, HOA management companies help maintain property values and guarantee community standards are upheld, allowing board members to focus on decision-making and policy development rather than day-to-day management.

What Does an HOA Company Do?

An HOA management company tackles a wide range of responsibilities to keep the community running smoothly. They manage everything from collecting dues and managing the community's budget to enforcing bylaws and handling disputes. On any given day, they might also coordinate with contractors for maintenance and repairs, plan community events, and keep all common areas well-maintained.

By taking on these logistical and administrative tasks, they free up the HOA board to focus on broader community goals. This hands-on approach helps the community not only run efficiently but also thrive.

Common Tasks of an HOA Management Company

• Financial Management: Budget preparation, dues collection, financial reporting, and audit facilitation.
• Maintenance and Repairs: Scheduling regular maintenance, emergency repairs, and liaising with contractors.
• Administrative Services: Managing board meetings, recording minutes, and updating residents on community issues.
• Compliance Enforcement: Promoting adherence to community rules and regulations.
• Communication: Serving as the primary contact for residents, handling inquiries and complaints.
• Community Building: Organizing community events and activities to foster a sense of community.
• Legal Assistance: Advising on legal matters related to the association's operations.

Should I Hire an HOA Management Company?

Deciding whether to hire an HOA management company is a significant decision for any board. It involves weighing the benefits of professional management against the cost and potential changes in how your association is run. Here are some considerations to help determine if hiring an HOA management company is the right move for your association:

• Board Workload: Evaluate the current workload of board members. If managing daily operations is overwhelming for volunteer members, a management company can provide much-needed relief.
• Expertise and Experience: Consider whether your board has the necessary skills and knowledge, especially in complex areas like legal compliance and financial management. A professional management company brings expertise that can help avoid costly mistakes and legal issues.
• Resident Satisfaction: Think about the current level of resident satisfaction. A professional company can improve the quality of life in the community by efficiently handling issues and maintaining amenities, which might be challenging for a volunteer board.
• Financial Health: Analyze if your financial goals and obligations are being met. Professional managers often have more experience in budgeting, financial planning, and dues collection, which can enhance the financial stability of the association.
• Long-term Goals: Reflect on your long-term goals for the community. A management company can help you achieve these goals with strategic planning and professional advice.
• Community Growth: As communities grow, the complexity of managing them increases. A management company can scale services to meet changing needs without overburdening the board.

If many of these points resonate with your current situation, it might be time to consider bringing a professional HOA management company on board. Their expertise can transform the management of your community, allowing the board to focus on broader strategic goals while keeping day-to-day operations handled effectively.

Management Company vs. the HOA Board

If you’ve decided that you need an HOA management company, it’s important to know what a manager can handle and what the HOA board, itself, still needs to take the initiative on. 

While the management company handles the day-to-day tasks necessary to keep the HOA functioning efficiently, the HOA board focuses on governance and strategic decision-making. The board sets policies, makes long-term plans, and represents the interests of the community.

In contrast, the management company acts on these decisions, implementing policies and keeping daily operations aligned with the board's directives. This division of labor allows the board to think big while the management company keeps the community's daily engine running.

Tips for HOA Boards in Working with a Management Company

• Clear Communication: Establish regular communication channels and schedules to keep both parties informed and aligned. Decide on the best methods for updates, whether through email, meetings, or reports.
• Define Expectations: Clearly outline what the management company is responsible for versus the responsibilities of the board. This includes specific tasks, goals, and performance metrics.
• Regular Reviews: Schedule periodic reviews of the management company’s performance against agreed-upon benchmarks. This keeps the management aligned with the board’s expectations and community needs.
• Legal and Financial Oversight: Although the management company handles day-to-day finances and compliance, the board should still oversee these aspects to ensure everything is in order.
• Community Feedback: Encourage feedback from residents about the management company’s performance. This can provide valuable insights into areas for improvement.
• Education and Training: Both the board and the management team should stay informed about the latest HOA laws, trends, and best practices. Consider regular training sessions to keep knowledge fresh.

How Much Do HOA Management Companies Charge?

The cost of hiring an HOA management company can vary widely based on several factors. Typically, these companies charge either a flat fee or a per-unit rate, but the final amount depends on the scope and complexity of the services required. Here are some key factors that influence how much an HOA management company charges:

• Size of the Community: Larger communities often require more extensive management services, which can lead to higher fees.
• Range of Services: The more services a community requires, such as event planning, frequent maintenance, or detailed financial management, the higher the cost.
• Geographic Location: Costs can vary significantly by region due to differences in local market rates and cost of living.
• Property Type: Condominiums, single-family homes, and high-rise buildings each have different management needs, which can affect pricing.
• Amenities: Communities with amenities like pools, clubhouses, or gyms may require more management effort, impacting fees.

How Do I Find the Best HOA Management Company?

So, you’re ready to move forward with your hiring process. One of the easiest ways to find HOA management companies is with a specialized search tool like All Property Management, which can show you top association managers in your area. But, before you reach out to a company, you should know exactly what to ask them and what you’re looking for. 

Naturally, a successful HOA manager should be professionally competent in all aspects of association management and have the requisite certifications and track record to perform their required duties. But there are other attributes that are important to be a successful HOA service provider. Explore some of the key considerations you should keep in mind when looking for a property management company.

Key Considerations for Hiring an HOA Management Company

The most important considerations to ask yourself when hiring an HOA property management company are: 

1. Can they handle day-to-day issues without supervision?
2. Can they guide the Board's decision-making processes?
3. Can they be reliable and responsive when communicating with homeowners?

Homeowners have more permanence than renters, so effective HOA management must consider the long-term implications of its actions differently than a typical property management firm. Consistency, longevity and proven experience are important considerations, as are the interpersonal skills of the firm's managers in dealing with conflicts, emergencies and the expressed interests of the board in improving their community.

With this in mind, it's important to hire an HOA management company that has proven methods for managing group politics and negotiating agreements among members with conflicting points of view. As you interview potential HOA managers, be sure to focus a significant portion of your discussions on understanding each manager's typical communication methods and tactics for conflict resolution.

Questions to Ask Potential HOA Management Companies

The interview process is an important consideration when selecting an HOA management company. It's an opportunity for your board to dive deep into the qualifications, practices, and compatibility of a prospective management company. Asking the right questions not only reveals the company's capabilities but also their commitment to aligning with your community's specific needs. Below are helpful questions to consider, each designed to uncover vital information that will aid in making an informed decision:

1. What is your experience with HOA management?

Understanding the company’s experience, especially with associations of similar size and type to yours, is fundamental. It's also beneficial to ask for references or case studies to gauge their expertise and success in managing comparable communities.

1. How do you handle after-hours emergencies?

Reliable emergency support is critical. Inquire about their process for handling urgent issues outside of regular business hours, including who responds and the typical response time.

1. Can you provide a detailed list of the services you offer?

It’s important to clarify what is included in their management fee and what services are considered extra. This helps in comparing different companies and avoiding unexpected costs.

1. What is your fee structure?

Discuss all costs involved, including setup fees, regular management fees, and any additional charges that could arise. Understanding how they structure their fees will help in assessing the overall budget impact.

1. How often do you report to the HOA board?

Regular communication is key to effective management. Ask about the frequency and format of their reports to confirm they meet your board’s expectations for updates and financial reporting.

1. What is your approach to handling resident complaints?

Their process for dealing with complaints will affect resident satisfaction. It’s crucial to understand how they communicate with residents and resolve issues.

1. How do you manage delinquencies and collections?

Effective financial management is essential. Knowing their strategies for handling late payments and their methods for pursuing delinquencies can indicate their effectiveness in maintaining the association’s financial health.

1. What type of insurance do you carry?

Confirm that the company has adequate insurance coverage, including general liability and professional liability insurance, to protect your association from potential legal issues.

1. How do you handle contract bidding for maintenance and repairs?

Their policies for obtaining bids, selecting contractors, and overseeing work can help determine whether your association will receive quality services at competitive prices.

1. What is your turnover rate with clients?

High turnover could be a red flag. Understanding why clients leave can provide insights into potential issues with the company’s service quality or customer satisfaction.

These questions are designed to provide a thorough overview of a potential HOA management company’s operations and their fit with your association. It’s essential to approach these interviews with a clear understanding of your association’s needs and priorities to be sure that the company you choose can meet them effectively.

How can I find HOA management companies near me?

Most HOA boards interview several managers before making a final decision about which company to hire. All Property Management has an extensive network of qualified HOA management companies to choose from along with helping learning resources to help you get the best results for your specific needs.

Begin your research and find the right HOA management company today with our helpful search tool.