What are benefits of a management company for a small POA

"relaxed" is always a fraught word for HOAs - they Boards of the HOAs have a legal responsibility to follow the rules - whatever they may be. Relaxing this not only doesn't make sense, it may not be legal.

A management company does not "look" for violations - they document those that exist and provide a legal process for addressing them. Strife? Nah - it usually simply aligns everyone with what the rules are - and, starts the legal process to address issues.

Of course the management company does not replace the Board - if you can't find board members, then dissolve your HOA and move on, or let an owner request dissolution when there is no board.

And, btw - quickbooks is waaaay overkill for your HOA - a spreadsheet would work just fine with only 40 properties.

My sense, based on your tone, is that you don't want an HOA - because it requires standards - and, "relaxed" doesn't fit with standards?

Why are "some people" seeking a management company? Are there community members not pleased with the relaxed atmosphere? The Board, if the governing documents are up to date, and all is going well why change? P.S. The Management company will not remove the Board, the management company works for the Board.

-- Of the utmost importance is your going to a document titled either "Covenants, Conditions and Restrictions," "Declaration" or similar and skimming through it once quickly to get a handle on its main topics.

-- Do the same with the POA's Bylaws.

-- Look up the name of your HOA at the Texas Secretary of State site. Chances are like 95% that your HOA is incorporated.

-- Being incorporated means the HOA is subject to certain Texas corporate statutes.

-- From my reading about Texas HOA law, the POA is most likely subject to at least two Texas HOA statutes. A great deal of case law applies, too, but familiarity with the case law is not needed at this point and might never be needed, if a Board is competent.

-- Either the Declaration or Bylaws; the HOA corporation's Certificate of Incorporation (or similar) filed with the Secretary of State; or the relevant Texas statutes will speak of the legal requirement to have a Board.

-- The Board can delegate many day-to-day duties to a manager it hires as an employee (not favored) or preferably, contracts with.

-- The above is HOA Course 101.

-- Thanks for elaborating some on the common property.

It sounds like you're self-managed, and fortunately, you don't have a lot to keep track of in your community, so at first blush, I might agree you don't need a management company.

However, you forget is that the people who may be doing the self-management tasks right now may get tired of it, especially when everyone else just sits there and doesn't volunteer to do anything (and then complain when something isn't done to their liking). People's lives can and do change, and perhaps the folks you have now are getting to the point they have to step down. Who will take over their roles? Will that person have the skill set you're currently used to? Will YOU be willing to take over a specific task when the time comes?

For example, it's true some associations have their property managers take meeting minutes, but I've always felt that should be the role of the association secretary. Property managers are there to handle daily operations while the board provides overall direction. That doesn't mean take up their job - if your board has officers, such as a board secretary, taking minutes is what he or she should be doing, and if they don't know how, there are tips throughout this website on best practices, not to mention one can Google how to take board meeting minutes.

Maybe you should ask whoever's proposing hiring a property manager why he/she thinks this is necessary and then you can come up with your own reasons not to - I suggest you start thinking of something other than cost. Ultimately the homeowners will have to decide if they want to go this route or not, so if the majority agree with you, fine. If not, the board can still prioritize what they want the property manager to do and send out a request for proposal (RFP) and go on from there.

Let me preface my additional benefits of having an MC this with . . . I think your situation is almost perfect for self-management, particularly if you're interested in keeping costs down. If cost is not a factor though, then certainly consider hiring MC to lessen burden on homeowner board members (even if burden is presently minimal). And yes, there almost certainly still needs to be a homeowner Board of Directors in addition to an MC (it would be an unusual situation and unlike most other states if that were not the case).

Other possible benefits of an MC in your situation:

(7) potential for greater continuity and consistency of things over the years (a single MC versus Board Members coming and going) . . . although MCs also tend to cycle through Property Managers, and you may also cycle through different MCs which would negate this "benefit".

(8) what Sheila said . . . lessen the likelihood of burn-out from homeowners who are currently doing the work.

(9) in addition to your (5) & (6) . . . the MC would be the "middle-man" in these situations and when necessary can be the "bad guy" when it comes to rule enforcement and sharing info that people may not want to hear. Instead of a homeowner Board Member being the bad guy against his/her neighbor, the Board can just put the MC in that sometimes awkward position.

(10) could bring benefit of having established professional/contractual relationships (e.g., landscapers, lawyers, other professionals) which might help to reduce your costs in those areas a bit.

Thanks. I could see the value in that but doubt any of that would apply to this POA:
(1) I do not think there has ever been an escrow situation with this POA - I just asked someone who has been involved off and on the Board of this POA, and kept up with it when not on Board, since ~1988 and she said it has not.
(2) This POA is a 501c4 (yes, I know that is rare but it is one.) That situation combined with total assessments being ~$28K a year, allows it to file an "e-postcard" Form 990-N IRS filing which probably takes 10 minutes to do.
(3) I am fairly certain there are no state (Texas) fillings for it.

I am going to just list what I see as benefits, and then the costs on floor during comments. So wanted to see if any benefits I did not know. Thanks for helping me.

The Board has at least Directors and Officers insurance. AS I recall it is around $2k a year. I do not think there is other insurance but there might be another liability policy of some kind. Since no actual community property, I think just a policy covering the Board.

Roger

I am of the opinion not having a MC in and of itself does not automatically open an Association or Board to increased liability. An argument could be made that having a MC would provide the Board and Association with an experienced manager who could counsel with the Board not to take a particular action which does not comport with the documents of the Association, or Texas laws and property codes, which could result in the possibility increased liability or litigation. That manager theoretically would have access to in-house resources who could provide additional guidance if the manager him or herself is uncertain of the possible ramifications of a Board decision.

The MC should never do anything itself which would somehow result in increased liability for the Board or Association. Not to say it does not happen, but if the MC is doing what it should, the decision making and direction rests with the Board/Association and not the MC.

The foregoing comments assume the Board is 'heads-up' and understands the documents of the Association, applicable property codes and laws, and seeks legal guidance when warranted.

In your previous posts you indicated Association operations are pretty low key, not many decisions to be made regarding, for example, architectural change requests and other matters which lend themselves to interpretations and disputes. With an annual budget of less than $30K, the Board is not managing six figure income streams and assessments. On the basis of what you have posted, it seems the Board and Association do not have much to trip over.

I am concerned about the following:

1. I interpreted one of your posts regarding mowing and landscape maintenance to mean the Association is hiring a contractor or contractors to perform the work. That being the case, the Association must have liability insurance in the event the contractor damages private property or runs over someone or a rock kicked up by a mower hits someone in the head or puts out an eye. The Association could also be sued by the contractor employee if he or she sustains an injury. You should consider Workers Compensation insurance as well, even though you may require it of the contractor. I am very concerned your Board and Association are underinsured to the point a large judgment against the Association could create financial chaos for the owners.

2. There was a comment in a post regarding escrow, you said you raised the subject with a long time owner who indicated the Association or Board is not involved in escrow matters. While the term escrow is not used in Texas in my experience, the functions of an escrow company in, say, California, are performed in Texas by the title company. (Again, in my experience in north Texas) So, who handles the TREC Resale Certificate and document production process when a property is purchased/sold?

3. I believe another respondent posted, early on, the low-key atmosphere you described could be problematic in that the Board may not be properly enforcing the terms and conditions of the Bylaws and Declaration. If that is the case, there is significant increased liability for the members of the Board; that liability could fall outside the coverage provided by the D&O insurance. If that is the case, the documents should be amended or enforced as written.