Developers usually enlist the help of an outside company to manage a new community. However, at a certain point, the management responsibilities are passed on to a board of elected officials. It is then their responsibility to figure out a management style. Unfortunately, many HOA boards aren’t aware of their options and simply continue to utilize the management that the developer chose. While it is easier, this is not always the best choice. It’s important for new board members to know and consider the different types of HOA management.
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What Are the Different Types of HOA Management?
Running an HOA is just like running a business. The HOA board takes on a lot of tasks and responsibilities to properly manage the community. For a new community, figuring out where to start can be difficult and overwhelming. Thankfully, there are many management options to choose from. Here are the 5 types of HOA management to consider.
In a self-managed HOA, the board members are responsible for managing the association. They ensure that all community aspects are operating properly. There is no assistance from an outside company or third-party entity.
Self-management can be a great choice for boards who feel that they are capable of handling association matters. These include conducting meetings, enforcing violations, bidding on contracts, planning the budget and reserves, collecting HOA fees, tackling legal dilemmas, and much more.
However, the overwhelming amount of board member responsibilities can become difficult to manage in larger communities. Board members are volunteers from within the community; they maintain jobs and lives outside of the association. When being a board member in a self-managed community becomes a full-time job, it can be difficult to fulfill the necessary duties. That is why many associations look to hire help.
2. Remote HOA Finance
In some cases, board members will hire an accounting professional to handle the finance aspect of the association. This provides them with more time to conduct different association business. The third-party professional manages finance-specific tasks within the association but does not handle any other aspect of the association. While this can be a viable option for some associations, it is often not enough.
3. Remote Management
An extremely popular option for many homeowners association is hiring a remote HOA management company, such as Clark Simson Miller. They will handle many of the administrative duties of an association rather than just one or all responsibilities.
For example, CSM will oversee financial management, collection services, association communications, insurance negotiations, and a multitude of back-office services. Back-office duties can include reviewing and bidding on contracts, tracking maintenance requests, reviewing risk management, and much more. Remote management will provide many of the benefits of a full-service management company without costing as much.
This type of HOA management tends to be a popular option among communities because it significantly alleviates the total workload without making the board members obsolete. It offers a balance of power and responsibility without completely breaking the annual budget. However, for board members who want a company to handle the majority of association functions, they can hire a full-service management company.
A consultant can be an option for associations who want assistance on a project-to-project basis. In other words, they only receive help when they call for it. The consultant will come in and help regain organization and control to make sure the association can continue to function efficiently.
While this by-the-need management solution can be enticing, it can also lead to more problems. Most board members, being volunteers themselves, don’t know when to call the consultant and it’s often too late. For those that don’t want the freedom of a consultant but the stability of a full-service management company, a remote management company like Clark Simson Miller can be an ideal option.
5. Full-Service Management
A full-service HOA management company is typically the more expensive choice of out of all HOA management options. This is because more is required from the management company. An association can hire a third-party management company to completely assume certain duties such as property management, financial management, maintenance, etc.
While a full-service management company doesn’t completely remove the need for individual board members, it will absorb the majority of their responsibilities. Board members will still be required to hold meetings but the treasurer’s main duties, for example, will be entirely handled by the full-service management company. They will take over tasks such as budget planning and reserve planning.
Consider 5 Types of HOA Management That Can Help Your Community
Being the first official board members can often seem like an impossible task, but with the right help, it can be easily manageable. Choosing from these 5 types of HOA management is the key to the success of the community and its board members. Just remember to consider a type of HOA management that suits your community’s needs. If that decision is the unique approach of an expert remote management company, contact Clark Simson Miller today to request a proposal.