Condo homeowners often think there is a problem if their community brings in a Homeowners Association (HOA) management company. However, there are many benefits to hiring an HOA manager. We hope to dispel commonly held misconceptions about HOA management companies and perhaps motivate you to talk with your condo board about the benefits such a service could offer your community—including smooth and efficient operations, enhanced communication and potential cost savings.
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Misconception #1: HOA Management Companies Take Control from Your Condo Board
When you bring in an HOA management company to assist your condo community, they do not replace your condo board or take away responsibilities from board members. Instead, the HOA management company works to support the condo board to operate more effectively—accomplishing more in support of the community. While your condo board may work closely with the HOA management company, it retains most of its decision-making responsibilities. One of the key benefits that the HOA management company provides is experience, as they have encountered (and addressed) numerous challenges working with condo boards and communities of all sizes in your city.
Misconception #2: HOA Management Companies Only Provide Remote or Virtual Support
Not true! The best HOA management companies in Chicago provide in-person support. The goal of the HOA management company is to assist the condo board with research, strategic planning and execution of projects. For the partnership to be effective, the condo board and HOA management team should meet regularly and develop a trusting relationship on behalf of the community. In-person meetings and regular phone calls and emails help ensure tangible benefits through straightforward communications and alignment of expectations.
Misconception #3: HOA Management Companies Specifically Look for Condo Violations and Impose Punishments
The HOA management company’s goal is not to seek out rule breakers within the condo community. Instead, it aims to ensure the community operates per the condo covenants—likely created before your condo’s board was elected! While an HOA management company might identify community practices that violate the condo community’s guidelines, they are typically not responsible for policing the rules and only work to ensure the condo community’s safety, security and seamless operations in support of every homeowner.
Misconception #4: Hiring an HOA Management Company Will Increase my HOA Fees
When your condo board or property manager contracts with an HOA management company, it does not necessarily mean that your association fees will increase. The board may use available association funds to hire the HOA management company on a retainer to provide more strategic direction for the community. And, while there’s likely a tie between the HOA management’s services and HOA fees, it’s also very likely that the HOA management company will provide recommendations and make introductions to service providers that will reduce costs for the community in the long run. If you are curious about how such a partnership will affect your out-of-pocket expenses, inquire with your board if this information is not already provided.
Misconception #5: HOA Management Companies Keep Community Members in the Dark
People believe this misconception because they fail to understand the role differences between management companies and HOAs. HOAs have a fiduciary responsibility to residents (i.e., “an acceptance of responsibility to act in the best interests of another person or entity,” as Investopedia explains). In other words, they must make decisions intentionally designed to benefit residents and (if everything goes as intended) bolster the property’s value. They should also set rules allowing others to use and enjoy the property.
HOA management companies have a different, far-more-limited role, focused on assisting the HOA board and implementing sensible policies. In short, management companies offer advice and then act according to what the HOA board wants. But that doesn’t mean the manager has no role to play. Good communication is a critical quality in a good HOA management company. A professional community manager knows that good management means responding to community members with the necessary information. It is the management company’s job to keep the lines of communication open between management and the members.
Misconception #6: HOA Management Companies Don’t Assist with Resident Disputes
A successful HOA must be able to resolve disputes in a timely way and maintain a positive relationship with the community owners. The first step to resolving conflicts is communication with owners to understand their concerns and needs. With understanding, conflicts are reduced and more readily resolved.
Disputes between the HOA board and community members (or among members) often arise. Dispute resolution is a vital HOA management company role. An effective HOA manager takes the lead on conflict management to assist the board in resolving problems. Board members can maintain good relationships with owners when not directly involved in disputes. Your HOA should have a dispute resolution plan in place, and the HOA management company should follow these guidelines in resolving any dispute. If your community has many conflicts, this may be an excellent reason to hire an HOA management company.
However, sometimes an HOA board may want a management company to pass a complaint on to them, which can contribute to owners’ perception that the company is unresponsive. John Ribando, GNP’s vice president of residential management, says questions regarding a specific HOA policy or procedure are best handled by the manager assuming they have the information. Alternatively, when we receive inquiries about an issue the board needs to address, we pass those on to the board president to manage.”
Misconception #7: Management Exists Only to Make Money
No HOA can satisfy every resident. When owners disagree with a decision, one criticism often heard is that the HOA management company is only in it for the money. While it’s true that some poorly managed communities levy extravagant fees, it’s incorrect to suggest that most overcharge. This assertion is one of the more damaging HOA misconceptions because it ignores an association’s purpose.
A community is more than a cluster of houses or condominiums. It contains common amenities such as exercise rooms, meeting places, pools, shared streets, elevators, stairs, clubhouses, etc. Many communities also provide needed security. These structures and services need funding to operate as intended. It’s the HOA’s responsibility to collect those funds.
Misconception #8: Management Discourages Buyers by Signaling High HOA Fees
Related to misconception #7, people often suggest that individuals looking for new communities avoid those where HOA fees seem too steep. While purchasers should look elsewhere if they can’t afford a property, ignoring it simply because the fees seem high is shortsighted for several reasons.
First, it fails to take into consideration the number of amenities provided. Communities with lots of added extras will likely require higher fees. Next, it ignores the potential cost savings residents enjoy living in a particular space. That seemingly high fee appears much smaller when you realize that you can substitute community assets for a gym or a pool club membership. Finally, it fails to consider the consequences of inadequate HOA fees, most commonly deferred maintenance such as roof or window replacements. Inevitably in these cases, residents are unhappy when they get hit with massive assessments after years of low fees to address overdue upkeep.
Misconception #9: All HOA Management Companies Are the Same
HOA management companies all perform the same tasks, so one organization must work the same as any other—right? Not so fast! Like all businesses, there is varying quality among HOA management companies. The tricky part is finding a company that is right for your HOA and truly cares about your property and owners. Here are qualities to look for in an effective HOA management company:
- Knowledge and experience in handling challenging problems and people
- Accurate, transparent and easy-to-read financial reports delivered on time
- Repairs and maintenance completed quickly and correctly
- Excellent communication with board members and community owners
- Timely and thorough follow-through on all board requests
- Efficient handling of violations
- Good track record in fostering good relationships with the board, community members and vendors
- Diffuses situations without escalating them, encouraging trust and confidence in the HOA leadership
- Provides specific services that fit the unique needs of your community
- Offers essential information freely and promptly
- Works well with both the board and the residents
For more information on choosing an excellent HOA management company, see our blog post on Questions to Ask Prospective HOA Property Management Companies or contact us directly.
