Management Companies

Having a MC does not eliminate the need for a board. It does remove some of the day to day tasks.
Alternatives to MC are independent contractors. For example, someone to do bookkeeping.

prior to seeking a MC, the Board needs to outline what they want a MC to do (specifically).

For example:

Under finances: Collect mail, record payments in ledgers, prepare and make deposits to bank, provide duplicate copy of deposit slip to treasurer. At end of year, provide a printed ledger for each lot for Treasurers files.

In my opinion, others disagree, the access to Association funds should be limited. The Bank accounts should stay at banks of the Boards choosing under the Associations name. The MC should not be on the signature card. The MC could prepare the checks, but signatures should still be from the Officers of the Association.

What size is your HOA, Tracye? What size should your board be (see your bylaws)? No matter what size, your HOA still must have a Board of directors as probably specified in your covenants (AKA, CC&Rs; declaration). The Board would direct the MC.

We have a complicated high rise with lots of mechanical equipment & amenities, so our Mgmt. Co (MC) handles all the day-to-day business with a full-time onsite Prop. Mgr. (PM) who has a full-time assistant PM.

HOAs with, say, detached homes and few if any amenities probably need what Tim describes, which may involve no onsite PM. Some HOAs might have a PM onsite for several hours a week and do what Tim lists along with, say, looking for violations and supervising your vendors, e.g., the landscapers.

So a lot depends on the size & complexity of your HOA. I guess I'd start by contacting HOAs like yours to see who handles their management needs. The MC might be listed on their website. You could then visit the MC's site to see what they offer. Thn your board probably would a want to interview three MCs.

Tim and Kerry give some great advice. Once you find three companies to interview, don't forget to ask for contact information of some of their client HOAs and talk to them about what they like and don't like - look for communities similar in size and amenities to yours so you're not comparing apples to bananas. You might even Google them to see if the companies have been involved in any major lawsuits and how they were handled. A lawsuit shouldn't necessarily eliminate them from consideration - you want to see if the company was in the wrong, what it did to fix it and what they've done since then to keep the problem from happening again.

But for now, I'm a little worried about your board. I do understand burnout (been there), but who will replace you if everyone leaves? A good HOA board should have a mix of new and experienced members - the newbies often bring the energy and new ideas, while the more experienced people offer valuable advice.

Make your annual meeting a type of "come to Jesus" meeting, where you tell people point blank it's time for some of them to step up because the association can't run itself, even with a management company. If no one shows up and the current board says to hell with this, you run the risk of the association going into receivership and you REALLY don't want that to happen.

Thanks everyone for the information. It's a lot to think about. Our concern is that no one will step up to fill the board positions in March. We want to have a plan B if that happens. We know that we still will have to have a board to supervise the MC but that should be easier than what we are having to do now. We have 65 individual homes, a small pool (which is a nightmare), about 20% rentals in the community, and the development is 30 years old. Our dues are at $115 a mo. and we have tried to keep them there by working frugally and sweat equity. Previous board about wiped us out financially. So we have worked hard to try to get reserves built back up.

Building your reserves back up should take precedence over keeping your dues low. Obviously you shouldn't do something drastic like doubling the dues, but inadequate reserves can end up costing homeowners a lot more money than periodic modest dues increases.

Tracye

You could count the number of regular posters on this forum on two hands. Reality is there are 350,000 HOA's, with at least 1,050,000 volunteers serving on its boards. As someone who has managed HOA's for over 9 years, I have seen more than what's been discussed on this forum.

There is a old saying, "you can lead a horse to water, but you can't make it drink". I have seen many great people on boards, most of the problems arise, because they are the only ones that want to lift a finger.

Today's technology is different from yesterday's pen and ink ledgers. All homeowner assessment payments are handled through the bank's lockbox system. I no longer manually enter a payment. Payment records are sent electronically and recorded electronically, with software specifically written for HOA's and customized for management companies. That same software will handle compliance issues, maintenance, either common area or residential, collections and homeowner communications. There is no such thing as a complex communities, it is just numbers and organization. Those 1000 home country club resorts are far more complex in my opinion.

As far as bank accounts being with the bank of the HOA's choosing, then they need to remain self-managed. MC's use one bank (for operating accounts) that they have a relationship with. The larger companies will use ones that integrate seamlessly into their software system. Reserves accounts are ALWAYS with the banks of the HOA's choosing (for legal reasons). Can you imagine trying to deal with 100 HOA's, all with different banks in different cities.

I have a different perceptive than most here. I have been a volunteer in a former HOA. I was a board member and then board president. I was threaten with a recall because I stopped a neighbor to neighbor lawsuit that cost my association $250K. I have managed over 120 HOA's of various types and sizes. I now own my own company. If I were ever to live in a HOA ( which I wouldn't) I know how to self manage it very easily, but the politics isn't worth my health.

One thing I would added, and from personal experience, look for a company that manages ONLY HOA's and not rental properties.