Self Manage HOA but professional manage HOA finances.

About 13 months ago, our HOA transitioned to a "self management" route but still having the management company maintain the finances, pay bills etc.

The extremely small size of the HOA and low funding. The intentions were to save money for the HOA as the prices are high at the moment. We explored several companies but couldn't justify the huge savings of self management.

The amount of interaction among the management company and the HOA was extremely minimal. They even confirmed it was kind of wasteful to have them manage anything but finances since they basically didn't do much for years (10-15 emails a year and 20-25 phone calls a year). Most the calls were about financial payments or funding questions the company would still handle anyway.

We are 13 months in "self management" (minus finances) and its smooth sailing. Everyone is happy and we are getting great reviews from the neighborhood.

Unfortunately, were contacted by a lawyer who represents a resident (owner but does not actually live in the home).

The lawyer claims the "self management" violated the PUD (Planned Unit Development Rider)for the home owners lender. A deep dive into our rules/regulations we were unable to locate anything which restricted the board from "self management" not did the layer claim our rules were violated. The only violation was paperwork signed by the homeowner and the lender and an agreement between the two.

Can an agreement between a lender and a borrower restrict how we operate the HOA?

The CC&R does not have any restriction about south management. We have all the documents filed with the county and nowhere is there any type of restriction on management. The lawyer is mentioning an agreement between the lender and the borrower of the home. It’s nothing that we were involved in or any of the process that we were involved in.

The way we look at it and we could be wrong but we don’t understand how we could be responsible for someone else’s contract. Nowhere in anything involving the HOA are there any restrictions in the CC&R or indentures.

Andy. I have found that many owner's do not know the relationship an MC has with the HOA. An owner not knowing may not answer the lender's questions correctly.

We had a resident who announced "they sold us" when we changed MC's years ago. I explained to them that it was like changing banks. Many owner's have no idea how HOA's operate.

The gentlemen who had an attorney contact us was actually a board member for 4 years. He lost his vote the last term and he’s upset. Now he’s trying to make life hell for the new board. That is what got this started. The owners attorney states if we don’t go back to full management the owner will have to explore legal options.

The owner is well aware of the rules. Feels like a bully tactic to stir up trouble for no reason.

It’s weird but he just wants to cause issues. It doesn’t hurt him in any way.

Thanks for the great suggestions all!

Yes, with Kelly, your use of "self managed" might be misleading since only certain aspects of you business is managed by the board. Our (20 y.o.) CC&Rs, too, say we must have a professional management company manage us but it doesn't sound like yours say that, Jamie.

That the Owner is just trying to make trouble doesn't make sense--he's spending this own money to do that?

That would be even better! He would no longer be a HOA member if he did that. Also have to agree your not 100% self-managed. We were except for paying an accounting service. They wrote our checks and collected the dues. Otherwise we handled all of the HOA business per the documents.

We considered ourselves "self-managed" because we did not pay a "property manager". Although we would have if we ever had not been owner owned or turned over to a conservationship.