Some HOAs choose to self-manage to try and save money. Unfortunately, there are a lot of risks to self-managing an HOA. Risks that can end up being costly.
HOAs that self-manage rely on volunteers to keep the organization afloat. Since they’re unpaid, they may feel less committed to the cause. Volunteer board members have other priorities they need to attend to like a job and personal obligations. This can make it difficult for them to commit the time needed to keep the HOA running smoothly.
One of the biggest challenges of self-management is the risk of not following legal compliance and facing a lawsuit. Many HOAs don’t have a lawyer on their board. This can quickly become a problem since there are a lot of laws that need to be followed and if your board doesn’t stay in compliance, you could face legal trouble.
Speaking of management, managing an HOA board is a lot of work. There’s no shame in admitting that. It requires so much time and attention that it can be difficult to manage well without outside help. Concerns and issues can be overlooked. Communication may need improvement. There may not even be a certain person appointed as the one to contact when someone in the community needs to reach out. That can cause members to become dissatisfied rather quickly.
Communication should be a top priority for HOAs. This means making sure that homeowners have all of the information they need including policies, upcoming events, etc. They also need to be able to get a hold of someone when they have a question or concern that needs addressing. If you’re self-managing an HOA, it can be tricky to keep up with all of the calls, emails, etc.
When you self-manage and an issue does arise, it may be more difficult to come to a solution. You don’t have someone to act as a mediator and help resolve the issue as a third party.
Managing an HOA successfully also means keeping a thorough record of the finances. You need to be able to manage funds well and keep track of everything. This means making sure there’s enough in your reserve, knowing how much to budget for a project and keep track of homeowner dues, etc. It can be a lot for the board to juggle, especially if there isn’t an accountant on the board.
We understand the desire to self-manage your HOA. Unfortunately, it can be risky not to have a little help from a community management company. You need to be able to protect your HOA from potential legal trouble, your accounting needs to be done efficiently, your HOA needs to be transparent, and members need to know who to contact if there’s a problem.
When you partner with PMI, you can protect your community and help it run smoothly. We provide effective communication, accurate accounting, honesty and integrity, and availability of management. That’s our PMI brand promise.
