Managing a planned community can be challenging. It involves not only dues collection but also common area maintenance, administration, financial management, and community governance. Over the years, numerous types of HOA management have emerged to address planned communities’ concerns and daily operations.
What are the Different Types of HOA Management?
There are three main types of HOA management:
1. Self-Management
Self-management involves a board of directors overseeing the entirety of the community’s operations. The community does not use an HOA manager or professional management company. Instead, the board handles everything from member disputes to budget preparation and vendor management.
2. Association Employed Manager
Homeowners associations often seek outside help handling community affairs. This is especially true for communities with many amenities or homeowner properties. One way to get professional help is by hiring an independent HOA manager to handle the board’s workload.
In this scenario, the HOA manager is tasked with certain duties, such as dues collection, maintenance management, and vendor relationship management. The HOA manager is considered an employee who receives a salary and benefits.
It’s important to note that HOAs must consult their governing documents before hiring an HOA manager. The documents often outline how the hiring process should proceed, how the payment process should be handled, and what requirements should be met to hire an independent contractor.
3. HOA Management Company
HOA management companies are firms dedicated to helping community associations with their operations. They fulfill several duties of the board, including accounting, financial management, vendor management, maintenance, and dues collection.
Different management companies will offer different services. Some may offer full-service community management, while others only offer remote or financial management services. Regardless, communities can often hire an HOA management company to fulfill one or more of their needs.
What Services Does Professional Management Offer?
Professional management provides numerous services to homeowners associations. Here is a rundown of the most common services offered.
1. Administration
HOA management companies and community managers often take charge of administrative work. This can include, but is not limited to, the following:
- Vendor and work order management
- Homeowner and board member communication
- Rule enforcement
- Database and document management
- Violation processing, fines, and charges
- Invoicing and dues collection
- Architectural review applications
- Website maintenance
- Common area scheduling and coordination
2. Board Guidance
Professional management can guide the board members on all HOA operations and activities. This can include the following services:
- Board meeting scheduling, preparation, and facilitation
- Recordation and distribution of meeting minutes
- Financial, policy, legal, and insurance advice
- Liaison for the board
- New board member training
- Documentation and reporting
- Annual election oversight
3. Financial Management
HOAs often need help with accounting and financial management. With a professional manager or management company, HOA boards can outsource all financial tasks. They no longer have to worry about managing bank accounts, preparing budgets, filing taxes, auditing reports, preparing financial statements, or collecting dues. Moreover, professional managers can even coordinate reserve studies and handle insurance.
4. Maintenance
HOAs often have trouble with maintenance — especially if the community is large or has several facilities. The HOA management company or community manager can handle all of the upkeep and related tasks, including the following:
- Vendor bid collection and screening
- Contractor insurance and licensing oversight
- Routine inspections
- Management of maintenance requests
- Maintenance plan preparation and scheduling
- Delegation of maintenance requests to respective vendors
- Oversight of contractor work
5. Legal Advice and Representation
HOA management professionals often provide expertise in legal disputes and compliance issues. They can represent the board whenever there’s a lawsuit within the community and advise the board on what to do if there’s an internal dispute within the neighborhood.
Industry professionals can also serve as legal advisors when there’s a problem within the HOA. They can prevent issues from escalating or reaching court, keeping the HOA’s reputation in check and allowing the community to find resolutions quietly.
Pros and Cons of the Types of HOA Management
The different forms of HOA management come with various pros and cons. They offer varying degrees of flexibility, responsibility, and financial commitment. Here are the pros and cons of each to help you decide which one is best for your community.
Self-Management
| Pros | Cons |
| Lower fees | Requires time, effort, and expertise |
| Complete control over operations and projects | Lack of follow-through |
| Less restrictive rules | More difficult to resolve disputes |
| Fosters a tighter community | Properties may be harder to sell |
Self-managed associations offer two main advantages: complete control and lower HOA fees. The former is self-explanatory, as the board can oversee all of the community’s operations. They govern the community’s capital improvements and often have less complex procedures for voting on community decisions.
As a result, the community members have more say in the HOA’s projects. This fosters a tight-knit community with less restrictive rules. Moreover, self-managed HOAs have lower fees since no HOA management fees are covered.
On the other hand, self-management can be challenging as the board must devote a lot more time and effort to governance. The board’s lack of experience and expertise may also result in a lack of follow-through regarding maintenance. They may not be as good at resolving community disputes, either. These may deter potential buyers as they must invest more time and effort into the community.
Association Employed Manager
| Pros | Cons |
| Better knowledge and expertise | Additional insurance policies |
| Simplified vendor management | Employee status |
| Expert advice on governance | |
| Experience in HOA management |
HOAs that employ association managers enjoy many of the benefits of professional expertise. HAO managers often have the knowledge, experience, and expertise to help communities succeed. They can often support the board in areas where they need the most help, like financial management, community governance, and rule enforcement.
In addition, HOA managers can help you simplify vendor relationship management. HOA managers can act as a liaison between the board and contractor. They can also collect vendor bids, screen potential candidates, and help the board make a good hiring decision.
However, HOA managers often require additional insurance to protect the community from liability. For example, the community may need to purchase workers’ compensation coverage or a liability policy for employees in case of accidents or lawsuits.
Finally, contracted managers may be regarded as employees under state law. In this case, the HOA may need to meet specific obligations like payroll withholdings, employee benefits, and sick leave.
HOA Management Company
| Pros | Cons |
| Saves time and effort | Higher HOA fees |
| Access to multiple industry professionals | Less involvement from the board |
| Vendor connections | |
| Management Software |
Hiring HOA management companies is a popular choice among planned communities. They offer several benefits that other types of HOA management do not. One of the biggest advantages is that management companies save the board time and effort.
While HOA governance is essential, the board members don’t always have the time to devote to community management. They have their own lives and careers, after all. With an HOA management company on board, the directors can have better peace of mind knowing all their obligations are being fulfilled carefully.
In addition, HOA management companies have an entire team of professionals with experience working with HOAs. These professionals are often required to hold certifications, complete training, and gain experience before they work with HOAs. This means communities can work with industry professionals who can solve most of their complex problems.
Furthermore, HOA management companies have deep connections with skilled vendors. They can connect clients with various contractors, such as construction companies, landscapers, and even HOA attorneys.
Finally, HOA management companies often have access to resources like HOA software, accounting systems, and online portals. With these tools, the HOA can streamline its processes and enhance the community’s experience.
However, HOA management companies do take away a lot of control. While the board is still in charge of making big decisions, it is less involved in day-to-day operations, which can be challenging for some board members.
Moreover, management companies have one big drawback: they cost a lot. Nevertheless, the HOA may be able to save money in the long term because management companies can prevent the board from making costly mistakes.
Which is Best for Your Community?
There is no one-size-fits-all answer to HOA management. Different communities will have different needs and financial capabilities.
For instance, if an HOA consists of a handful of lots, it might make more sense to go the self-managed route. It costs less, and there are fewer common areas to maintain. The HOA may be more manageable even if the board members are the only ones overseeing operations.
Meanwhile, HOAs with more members and facilities may need professional help. Managing communities like these might not be feasible — even if the board comprises a dozen members. Moreover, they often have more complex processes and procedures that require expertise and experience.
Find a Reliable HOA Management Company Today
Homeowners associations should consider their needs when deciding between the different types of HOA management. If your community has decided to hire an HOA management company, hiring a reliable one with years of experience only makes sense.
Personalized Property Management is just the right choice for communities in Southern California. We have years of experience working with communities in the area. Our team is familiar with the ins and outs of community management — and the state laws that govern HOAs. Call us at 760-325-9500 or email us at info@ppminternet.com to know more!
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