New to HOA Please Help!

I have a couple of quick questions in reference to HOA's, as I am a first-time homebuyer in Georgia. Any help/suggestions would be greatly appreciated.

1. Do/Should all board members need to have a title, i.e. President, V. President, Treasurer, Secrtary, etc.? It seems that the obvious answer is 'yes' but members are against it because they claim, "We all work together so there is no need to have titles." If there is a rule/law to this effect, could someone please point me in the right direction. Also, should each member have specific duties?

2. Is it better to be non-profit of LLC? I have been told by people in other subdivisions that their HOAs are non-profit, yet ours is LLC. The management company who runs our HOA manages approximately 50 (I am low-balling) other communities as LLCs.

3. Would the Open Records Act apply to information for my HOA? The management company does not want to provide residents with a copy of actual expenses incurred in 2006 but we would like to know what they were. I already know how to file one.

4. According to our covenants, every property owner has the right to a vote. Quite a few of our homes are owned by investros who live in CA, NJ, FL, etc. They are not concerned with the day-to-day issues, just making sure the rent is pain on the 1st. Is there any way we can get them more involved and more carefully selecting their tenants, i.e., those withouth criminal records. Also, who gets to vote at the meetings if the investor is not present, the tenant?

5. Our covenant also states that the newly elected board must meet within 10 days but does not list the consequences of not doing so. Is anyone familiar with this?

I know this is a lot, but I am also searching the net for answers as well. If you have any suggestions I would be most appreciative.

Thanks.

Monise, in answer to your questions:
1. No, some are simply directors. But unless your By-laws state otherwise there is usually at a minimum a president, VP, secretary and treasurer.
2. I don't know, check the difference as defined in Georgia.
3. Yes, most records and all financials should be available.
4. More involved? No.
Selecting tenants? Set up procedures, if allowed by your Declaration, which provides some control (approval) by the HOA.
allowed to vote? The owner or their proxy when allowed.
5. Yes. It is treated as a guideline and usually there is no consequences.

Monise, officers have a title while the other Board members are referred to as Directors. The Board is legally required to follow the By-laws and the other controlling documents. They should not be making decisions to the contrary and can be held accountable by the members.

Regarding sales, if you have a manditory assessment doesn't a title company contact the HOA for a status letter in your state prior to issuing title insurance? You can search this board for discussions on controlling rentals.

So why does your Board continue to use that management company?

We've had the problem of certain homeowners not "liking" the management company and wanting them to do more or something in addition to what they do now. Since I'm now on the Board, I've become aware of some of the behind-the-scenes things they do like filing our taxes, articles of incorporation, etc. But what it basically boils down to is you get what you pay for. We don't pay a great amount to our management company so we don't get the same service as other HOAs may get.

My observation is that there always will be people that think they can do it better, cheaper, faster, etc. They have to have something/someone to complain about. Until you really delve into what the management company is doing for you, I would recommend staying with them. Changing on the whims of a few malcontents would probably do more harm than good until you get a really good feeling as to what the problems, if any, with the management company are.

the admins are right, with a minor word change...

HOA management is a profession that SOME people get trained in, practice for, and do for a business. Those are the people you want for a MC. If the one you have isn't, get someone who is.

WHat you want to watch out for are the folks who claim to be professionals, who play at management, but didn't bother to get trained, certified, tested, authorized, etc... Unfortunately, there are many of those out there, who hang up a shingle and take money as a MC, but do very little "professional" grade work for their money.

I don't know if you are paying too much, but the best way to find out is put out bids to three new MCs. Use an RFP that lists all services you need so you can compare properly. Search this forum for two words: request proposal

You will find all the info you need. Search the directory at CAIonline.org to find certified MCs as a starting point. There are good ones that are certified and non-certified, but it's a place to start.

Personally, I'd look at that $9,000 a couple ways. Your MCs main expenses would most likely be salaries and fixed overhead (office, phones, equipment, insurance, professional services (CPA, lawyer), etc). So what does $9,000 buy just in terms of an employee? Have a look here: http://www.communityassociations.net/adamen_rss.html

Looks like a salary of $50k might be a good place to start estimating for a community manager. Now add 20% for taxes, insurance, benefits, vacation, etc for a cost of $60k per employee. Each employee will have office, computer, phone and their share of other office expenses. Let's guess $1,000/month in expenses. Now, the person costs $72,000 to have around. Let's assume only 30% margin on sales (I have no idea what's actual in the industry) and your MCs cost to deliver $9,000 in services must be $6,300 or less for him to make 30% margin. Each employee will work about 230 days/year (after vacation, holiday, sick days, training, etc) or about 19 days/month. Bottom Line: The MCs staff can only afford to spend an average of 3.3 hours/week on your community to cover ALL services.

Of course, my numbers are totally wrong, but it should give some perspective on how to look at cost of services and what to expect. $9,000 sounds like a lot until you consider all the time and cost that goes into running the MC's business behind the scenes.

The best gauge is still to get 3 new bids with a good RFP and see what others are willing to do the work for.