HOAs with no management company

Eliz

We need more information. Number of units? Type of units? Current budget? It is not as simple a question as you ask.

With others, I'd also like to know what kinds of amenities you have? And how old is your HOA?

Some Resources:

How to Self Manage Your HOA from the author (so don't worry about the disclaimer). To see the source for this link go to http://www.hoaboard.org/

Subject: Self-Managed HOA Thread on this site

To Be Managed - or Self-Managed? from NJ Cooperator

Beginners Guide for Rookie Board Members List of articles from AZ CPA firm. Good info in general. Some specific to AZ, a lot general enough for any Association. I especially liked Our HOA Accounting Advice for Self-Managed Communities

Committee Findings for Self-Managed HOA vs. Use of Management Company I located this online. Apparently a CO HOA formed a committee to take a look at the issue. This is one of (or perhaps their only) report on the issue.

There are also a lot of resources for individual positions (vs. the larger question of self-management).

However, lets be honest. There are pitfalls with self-management. Some of the bigger pit falls (and how we addressed them) are:

Workload - There are a lot of day to day tasks with Associations. Simple things like bookkeeping and taxes, maintaining Association records, overseeing contractors and planning for meetings are just a few. Granted, individually, it doesn't seem like a lot of time. However, if someone has to take time off of work to walk a contractor through the property for a proposal or to oversee tree work being done, there aren't many individual unpaid volunteers willing to do that. Even if there are individuals willing to do this now, will they be willing 5 years from now (or even the following year). The workload may reduce the number of volunteers.

That said, hiring individual contractors to aid with bookkeeping or communications (perhaps even simply hiring temp workers when needed) can go a long way it minimizing the work load. Additionally, organization and written policies/procedures can also make the tasks less burdensome.

Corporate History - I'm not talking records. This is the history each individual has when they leave and may or may not be fully passed on to the new person in the position. Lack of this knowledge can cause old mistakes to be repeated or old agreements not be exercised.

To minimize the loss of corporate history between boards, I've created Officer manuals. These manuals identify the minimum requirements of the positions, provides examples of how to do the tasks and is contained in a binder that is passed from Officer to Officer. If interested, I'm willing to share [email protected]

Enforcement - Nobody likes to be the bad guy (ok, some do like it but most don't). It's simply easier to have your MC or PM tell your neighbor to pick up their trash cans or mow the yard. Being self-managed, someone (typically the President because they are the face and voice of the Association) has to be the contact person for enforcement.

The best way to minimize this issue is to have written policies that are clearly written and easy to understand. Then enforce equally. Every Association is different, but it's rare within our Association to have an issue go past the 2nd notice and rarer for the issue not to be resolved at a hearing on the topic.

Communication - This is akin to transparency. It's easy to get the day to day tasks done. It's not always easy to make sure that you inform the membership that the work is done. Newsletters and websites take time to publish or keep current. It's one of the things that may be quickly dropped. However, it's one of the most important things a self managed Association needs to have as it presents the transparency the membership desires.

Over the years, we have discovered that several of the articles are basically the same. Therefore, we established a calendar for issues and which articles should be included. We then have several versions of the same article. It takes time to create these things. However, once created, we have been able to easily put together a 4 or 6 page newsletter with only one or two newer items that needed written.

Tim has given you some good ideas. You should be aware that Colorado is continuing to add statues to the Colorado Common Interest Ownership Act (CCIOA) each year. Your HOA will be required to comply with CCIOA and the Non-profit Act. Otherwise you could become liable in a law suit which could be more expensive than hiring a licensed Community Association Manager (CAM). The knowledge needed is reflected by the fact that about 25% of experienced managers failed the state tests on their first attempt last year.

As always, Tim has provided both really good links and really good advice. I'm in a 100-home HOA on the east coast of Florida. We are self-managed and have been for many years. Tim's 4 highlighted pitfalls: Workload, Corp. History, Enforcement and Communication.... we suffer with problems associated with each of those.

Not wanting to divert the thread but, are the fees being waived or are the individuals simply behind in payments?

If they are being waived, it's considered income and 1099s or W-2s should be issued.

If they are being waived, you can always contact the IRS and State Treasurer with your understanding. If they look into it (i.e. audit those returns) and your understanding is correct, you may even get a small financial reward.

Additionally, it will put them on notice to do things correctly.
If it causes issues for the Association (for not filing proper paperwork or, if considered employees, not paying employer taxes), perhaps the membership will wake up and remove those individuals from office.