Many HOAs hire property management companies to handle day-to-day operations, financial management, and administrative tasks. Understanding when and why management companies are used, what they do, and how they affect your experience helps you navigate HOA living effectively.
When HOAs Use Management Companies
HOAs typically hire management companies when:
- Size: Larger communities (50+ units) often need professional management
- Complexity: Complex operations require professional expertise
- Board Capacity: Volunteer boards need support
- Financial Management: Need for professional financial oversight
- Legal Compliance: Complex legal requirements
- Maintenance: Extensive maintenance needs
Smaller communities may be self-managed by volunteer boards.
What Management Companies Do
Management companies provide various services:
Financial Management
- Collecting assessments and fees
- Managing association bank accounts
- Preparing budgets and financial statements
- Paying bills and vendors
- Managing reserve funds
- Handling delinquencies and collections
Administrative Services
- Maintaining homeowner records
- Preparing meeting agendas and minutes
- Handling correspondence
- Managing contracts and vendors
- Maintaining association records
- Providing board support
Maintenance Coordination
- Coordinating maintenance and repairs
- Overseeing vendors and contractors
- Conducting property inspections
- Managing maintenance schedules
- Handling emergency repairs
Rule Enforcement
- Inspecting for violations
- Issuing violation notices
- Managing enforcement processes
- Coordinating with legal counsel
Types of Management Services
Management companies offer different service levels:
Full Management
Comprehensive management including:
- All financial services
- Complete administrative support
- Maintenance coordination
- Rule enforcement
- Board meeting attendance
- On-site or off-site management
Financial-Only Management
Limited to financial services:
- Assessment collection
- Financial reporting
- Bill payment
- Limited administrative support
Consulting Services
Advisory and support services:
- Board guidance
- Policy development
- Project management
- Legal coordination
Management Company Costs
Management fees vary based on:
- Service Level: Full vs. limited services
- Community Size: Larger communities typically pay more
- Location: Regional cost differences
- Services Provided: Scope of services
Typical costs:
- Monthly management fees: $500-$5,000+
- Per-unit fees: $5-$50+ per unit per month
- Percentage of budget: 5-15% of operating budget
- Additional fees for special services
How Management Companies Affect You
Positive Impacts
- Professional Management: Experienced oversight
- Consistency: Reliable operations
- Efficiency: Streamlined processes
- Expertise: Professional knowledge
- Reduced Board Burden: Less work for volunteer boards
Potential Concerns
- Cost: Management fees increase HOA costs
- Less Direct Control: Board delegates authority
- Communication: May be harder to reach decision-makers
- Responsiveness: May be slower to respond
- Quality: Varies by management company
Working with Management Companies
Tips for effective interaction:
- Know Your Contact: Identify your primary contact person
- Follow Procedures: Use proper channels for requests
- Be Patient: Allow reasonable response times
- Document Everything: Keep records of communications
- Escalate When Needed: Contact board for serious issues
- Attend Meetings: Stay informed about management decisions
Evaluating Management Quality
Signs of good management:
- Responsive to homeowner concerns
- Clear and regular communication
- Accurate and timely financial reporting
- Well-maintained common areas
- Professional and courteous staff
- Transparent operations
Red flags:
- Poor communication
- Unresponsive to concerns
- Financial irregularities
- Poor maintenance
- High turnover
- Lack of transparency
Board vs. Management Authority
Understanding authority:
- Board Authority: Board makes policy decisions
- Management Authority: Management implements board decisions
- Delegation: Board can delegate operational authority
- Limits: Management cannot make policy decisions
- Oversight: Board oversees management
Before You Buy
When evaluating a community with management:
- Ask about management company and services
- Inquire about management fees
- Check homeowner satisfaction with management
- Review management contract terms
- Understand how to contact management
- Ask about management company history
Conclusion
Property management companies play important roles in many HOAs, providing professional services that support community operations. By understanding their roles, costs, and how to work with them effectively, you can navigate HOA living successfully. Well-managed communities benefit from professional oversight, but management quality varies, so evaluate carefully.