HOA Management Fees

We have 140 single family homes. We are currently looking at a management company who quoted us $4800.00/yr. This does not include attending monthly meeting which would be $50.00 each meeting. We have very little concerning amenities and no clubhouse. We have been paying about $12,000/yr based on a rate of $35/hr.
The new company says it feels that an HOA like ours should not pay more then 12-13%. We are now paying slightly over 23%. Some wonder if this new company can/will do the job. Contacts were made with several of the HOA's the company manages and all of them had high praise.

Any thoughts?

John,

We are 130 lot HOA. We also have no real amenities (2 playgrounds).
When we were paying an independent contractor to perform bookkeeping duties only, we were paying $4,200 a year.

Sounds like you have a bargain to gain an MC that will do more then just bookkeeping.

We have 4 retention ponds which we have mowed around, ponds treated for vegetation, mowing of our 2 entrances, 1 small playground, 1 tennis court, 1/2 basketball court. We also have contracts for mowing lawn care

I thought the something. However they gave me a copy of those costs which are pretty close to the same we now have and with others that we interviewed.

Once those contracts are in place, it's fairly easy for the MC to make sure that the work is being done correctly. The "hard" stuff is the back office work: collections, violations, etc. Personally I like doing the part everyone else hates: collections!

We contacted 11 companies. After not hearing back from some or a few telling me "we are not cheap" we interviewed 5 companies. Their costs for our needs were 4800, 6772, 12000, 12000 and 13344. One of the 12000 worked some years back for the company we now have. Our present company we pay by the hr but usually ends up being 12000. Who we have now is included in the companies above. The 13344 does a lot of internet work etc which we are not interested in.

You have to keep the relationship of the MC and the HOA in mind. The MC is a sub-contractor to the HOA. They are to do what the HOA tells them to do per a contract. So I think the MC you interviewed is putting more weight back on the HOA to do it's job. For me I would never even consider the MC attending a HOA meeting. It just doesn't make sense unless the HOA is giving that much control to their MC.

Basically, you get a better "deal" on being less reliant on your MC to handle business. Are you wanting the MC to be responsible for writing up and following up on violations? Are you wanting them to manage the money by writing and collecting the checks? Do you want them to provide certain services? Then you pay for those. Otherwise, the HOA needs to take up it's role in running it.

Our HOA we had an accounting firm that collected and wrote checks for us. The owner happened to be a member of our HOA and thus was our "Treasurer". We had a 2 signature requirement on each check. So when the Accounting firm wrote a check for our bills, they and 2 of our approved board officers had to sign them. The firm did not write checks (except routine) unless we told them to after a meeting. We paid them about 500 a month which included them doing our tax returns once a year. They also would give us an expense and collections report once a month prior to our meetings. After that, the HOA did everything else. Including enforcing rules, hiring contractors, and running the HOA.

John,

If your concerned of price increases make sure you read the contract.
Additionally, sign a multi year contract with the option of either party may terminate the contract for any reason at the annual anniversary of the contract with a 30 day notice. At least have a similar option after the first year. This gives both sides an out if it's discovered that it's difficult to work together.

Melissa

I wish you had a better understanding of how HOA's actually function versus how YOU did things in your HOA.

First, was the Treasurer a Board member elected by the owners? If so, the general consensus is that Board members should NOT be paid for their services.

Second, MC's are to do what the Board tells them to do per their contract. How many HOA's do you personally know that follow this practice?

For MC's that handle the day-to-day operations, why wouldn't you want them at meeting SUPPORTING the Board. We should be experts on financial reporting especially when it concern homeowner association. I would rather hear how my HOA is doing from an expert instead of someone reading from a sheet with absolutely no understanding of what the numbers actually mean.

The relationship a MC has with a HOA is a partnership. First the Board member elected by the owners needs to know what the role is before they fill out a nomination form. If they are just there to fill a seat, WELL, you get what you elect or appoint.

farm for home sales - What does this mean?

Heaven forbid Richard there is a different world than yours out there. Your not right all the time. Not all HOA's run the same and not all of them need an MC in their lives. MC and HOA relationships differ. Plus at the end of the day the MC is HIRED help for the HOA. What the HOA decides they want to hire the MC to do is up to them. NOT up to the MC.

We have several references and called 4 or 5. All had good things to say. Said there was good communications and the HOA had run better then in the past. I tried to find something wrong to no avail. Maybe they are being paid off by the company. haha Yes, we differently require our MC to take care of violations. They explained their process. When they see an issue they attempt to contact the home owner at the house. If not home they use a "hanger" and put on the door knob or a sticker to the garage door which would be the 1st "friendly letter. They have 2 weeks to comply then a formal letter goes out. That's when we get billed for the envelope, stamps etc. I had not heard of that process before and it sounded pretty good; saving time and money by not writing a lot of letters etc. the 1st time around.

John

In our MC contract they do not inspect/police our property. They do follow up with notices and fines but the actual complaint(s) is initiated by the BOD, not by the MC.