Experience Going from a Management Company to Self Managed

Does anyone on here have experience going from using a management company to self-management or seriously considered it?

The contract with our current management company is coming up at the end of the year. We have a large and vocal group of homeowners who are not happy with the current management company and several of our board members do not hold a favorable opinion of the company either. We have received a few other proposals from other management companies, one of which is very promising, but just looking to explore all options.

Our subdivision will be around 330 homes by January and that will likely grow somewhere between 360-400 by the end of 2020.

My former HOA considered it in the past, but decided against it -- not enough of us (myself included) were willing to put in the time required to make it work. Plus, you don't just need volunteers, you also need volunteers with the right skill sets and knowledge. I think it could be a good option for certain HOAs, but not all (or even most). I'd look at switching MCs first, in your situation.

Self management as in volunteers do all the work? Or self managed in the sense that the HOA directly hires a manager or bookkeeper rather than a management company?

Thanks Tim

Well, there's certainly no reason an HOA can't self manage. It just depends on whether members have the time and resources to do it.

One of the hardest things about relying on volunteers is that 1) if they move away, get burned out or just don't want to do it anymore, you're in a pickle, and 2) you don't have a lot of leverage if they are doing a bad job. So consider how you and other board members might deal with an officer who isn't keeping up with their assigned responsibilities, or isn't performing them well or quits.

You'd want a PO Box for association mail, and some checks and balances so that one officer isn't solely in charge of the finances. Hopefully someone from the board is available on weekdays, as that's when you'd typically meet vendors. For homeowners, you may want to establish some expectations - that you are only available between X hours on X days, unless it is an emergency.

welcome, back , George. I agree with you entirely.

My former association of 60 or so homes was self managed since turnover. An association of that size is a handful for 5 board members to handle. Unless you plan to hire at least bookkeeping help, I think a 300 home association would be a lot to self manage.

We are self managed and always have been but only have 24 units. I think since you are getting bids from management companies you should have a list of duties the management company performs. How much time would it take to do yourself? How much does the management company cost per unit? You already have members complaining about the management company what makes you think they won't complain about the volunteers? Some people get funny about money and having a qualified outside insured person handling the money quiets them. If we could afford it we would have a management company just so they could be the "bad guy" enforcing rules, fining members and doing special assessment instead of a neighbor having to be the bad guy. If you want to change management companies anyway you could self manage for a period of time and then look at it again in 6 months or a year. I think you have some people complaining no matter what you do and it is a lot less personal when they are complaining about the management company then the BOD or volunteers.

Based on Melissa's expert analyst, MC's should be banned, and that all HOA's, no matter the size, should be self-managed. I got out of mine, so I am safe.

Chad

Can an association or a group of individuals self-manage their HOA, sure, but for how long? Before anyone answers you question, they have to answer truthfully. They need to know the number of units, what amenities is the HOA responsible for, what state regulations are imposed on HOA, what type of HOA are you talking about, detached homes, attached townhomes, condos, how old is the complex, what is the age group of the owners, what is the financial status of the HOA.

If I were to consider self-management (and I did for the association I lived in), the first question has to be, what if a group of homeowners turn against you and you decide to throw in the towel, then what. The second question, and it's really not a statement, but a point of fact, YOU will be the one doing all the work. You have to decide how you are going to manage the complex, what software are you going to use. The complex I lived in had 317 unit and a convent (yes, a convent, the home built in the 1930's by the Al Capone crime family). It had 81 acres, had to do the monthly water billing and collection for 468 homes, we were a gated community with 12 gates and 2 telephone entry systems, 10 private streets, a park, swimming complex. On paper, it was one of the simplest communities to operate until you factor in people. Then it goes straight to hell in a hand basket. Owners don't like getting notices to put their garbage cans away, owners that believe their dispute with their neighbor must involve the HOA, owners that can't control their tenants, owners that feel they should be able to pay their HOA fees whenever they damn well please. They are detached homes, really the easiest to managed.

Let's say you live in a stacked condo. Bad roof, bad pipes, aging building, aging owners, no money and you have to fix the roof, re-pipe the whole building of 18 units. You live in a complex where the developer only created a limited number of guest parking. It worked fine when the complex was new, families were young and you hadn't accumulated as much crap as you have now and you also are storage for your grown kids. Now can you guess why Boards hire management companies. They sure don't want to be dealing with the problems of the neighbors they live around.

How much can a management company really help? Well the going rate is $10.00 a door for detached homes, $15.00 for attached, but you could have a minimum of $350.00 per month. So 7 unit HOA could pay what a 35 unit HOA pays. It is nothing for a MC to put 10-20 properties in one manager's portfolio.

I can go on and on. One person stated The MC role can sometimes get blurred. Especially those who want to attend each board meetings and act like they own the place. Our relationship with our accounting firm was they did not issue money out unless board voted and it noted in the meeting notes. They didn't tell us what to do. I don't want to "run" the association", but I if don't who will, the Board? I attend almost Board meeting, at least the one's I know about. I set the agenda, because they don't, I run the meeting because they won't, I pay bills and all utility bills are on auto-pay, because if they had to approve, they would be turned off.

So everyone is clear, I was hired by the Board, BUT I work for and represent the association.

Most people who get on a Board especially if it is self-managed and do much of the work because most everyone else backs out, do it for pride.

The last thing you want to see in your community newsletter is your name, and you being removed from a position that you dedicated so much of your time to.

I consider myself a relatively intelligent person. I worked for the world's largest mortgage company. I had a real estate sales license. I knew a few things relative to my work at Countrywide. You know how much was covered in my real estate license classes, ZERO. I learned in a hurry.