Self-Managed Homeowners Associations

Posted by on June 5th, 2017

With the skyrocketing price of homes today, many homeowner association neighborhoods are looking to save where they can.

Some have found they can maintain desired aesthetic standards at a lower cost with self-management, where neighbors agree to share administrative duties instead of paying a professional management company.

This can mean a huge savings for the growing number of HOA communities. HOAs maintain standards for landscaping and cleaning of common areas, and enforce rules for upkeep on the membership’s homes. HOAs often protect property values by not allowing neighborhood problems to fester.

Majority Rules

Some self-managed HOAs are governed strictly by the majority rule. In America, the one-voice, one-vote concept is quite popular, especially considering some recent election results!

In such “pure” democracies, community spirit is often enhanced. In an increasingly stratified society where folks often just stay in their own homes and yards, these neighbors have a unique synthesis.

Working together to maintain common spaces, clear snow and take out the trash builds a real sense of “a village.” People know each other’s names, and often socialize together.

Wonderful, positive projects like community gardens, neighborhood watch and safe play equipment sail to approval.

But the “majority rules” approach doesn’t always cut it. Human nature often steps in.

Reality Bites

Neighbors are like family members: They don’t always get along.

Street parking, lawn maintenance and trash disposal are just three of the many neighborhood issues that can get contentious.

Without the formalities of a managed HOA, any rules are difficult to enforce.

HOA management companies offer customer and other support every day. Besides administrative work, they’re updated on current HOA law and can provide guidance on difficult decisions. HOA minutiae is nearly limitless.

Property managers know about property management, and that’s why people pay them. Without the backing of knowledge, it’s difficult to resolve disputes and get things done.

We’re Board

Most self-managed HOAs will eventually self-destruct, or elect a board to make decisions. The election of the board should be a democracy. The running of the association should not.

Board members should dedicate themselves to learning all the ins and outs of HOA law and practice, and be strong advocates for decisions that benefit everyone, rather than just a few.

Good communication can make people feel like they still have a voice, but majority-rules voting on every issue at every meeting is usually an inefficient way to govern.

Just for Fund

Homeowners Associations exist by the willing cooperation of everyone in the neighborhood.

Collecting dues is what keeps the HOA in existence, and serious amounts of money can be in play. Taxes need to be paid and reports need to be filed.

An organization staffed only by volunteers and amateurs is rife for financial misdeeds. Remember to keep the books as open as possible for legal and ethical reasons – as well as cooperation and teamwork. Transparency is key.

Services such as legal and accounting are particularly hairy subjects best left to professionals. Some states even require self-managed HOAs to undergo periodic outside financial audits.

At the very least, experts recommend having a team of trusted professional consultants the association can turn to in a pinch.

Quantify this

It may also be hard to verify everyone is doing their fair share.

People who work at home may feel like too much responsibility is shifted to them.

Without everyone pitching in equally, self-managed condos and HOAs can feel like a second job.

Feelings can be hurt, and patience and compromise are at a premium. If you don’t have a membership that agrees on pretty much everything, you could have trouble.

Worth its weight?

HOA management companies do a lot of work, spending time on the phone, filling out forms and dealing with homeowners. If your association is self-managed, board members should be required, or at least encouraged, to stay informed – perhaps even attending classes.