Self-Managed HOA

CityO, I was President of a self managed HOA of 420 single family homes in the 70's. Today you will need to start with Board members who are experienced in all aspects of HOA management including governance, covenant enforcement, maintenance, budgeting, insurance, applicable laws, and many other items.

Today I would never consider being on a Board which is self managed because knowledge, experience, and age has made me a mere mortal

Yes...more info.

We're self-managed. 19 townhome units.

Well, maybe I'm confused. Trust me - would NOT be the first time!

I was thinking self-managed = association does not employ a third-party professional management company. My association does not employ a third-party professional management company - we do our own management duties (I'm the association property manager, BOD, and usually appointed as President).

Before I get flamed for conflict of interest (by any newcomers, or by those who haven't done a search for my situation), my unique situation HAS been discussed on this message board, it is NOT recommended, I am trying to get out of it, blah, blah, blah...

CityO,

You need to give us more info. How many owners, any amenities? Do you have a lawn service?

I lived in a small 11 unit condo so had no need of a management company. We shared pool expenses with two other adjoining condos. Now I am in a townhome with 101 owners and I wouldn't consider self management.

I, too, have not previously seen the term "self-managed", although it certainly applies.

My HOA: almost 300 single-family houses on medium-sized lots; the HOA has several grassy common areas, but no other amenities; annual dues of $260 per homeowner to have the grass mowed, the sprinklers run and pay for a few annual events; volunteer BoD of 7; obviously, no paid manager or management company.

It probably makes sense with no more than this for us to manage, and it has worked out OK for almost 20 years, but it's not working so well for us, now.

As Ellen said, what do you have to manage? How big are you, and what common property and amenities need to be managed? What are the goals -- what would be the duties.

What's your backstory? Are you a new Association? Have you been working with a management company and want to try without them? Why do you want to change now?

If it's done properly a self managed HOA can be just as financially healthy as one with a Management Company or just as financially un-healthy. But self-management takes knowledge, time and effort...if you don't have dedicated volunteers and resources to do things correctly, things can go downhill very fast. Whether your association consists of 6 units or 600, it is a business. The BOD has the fiduciary responsibility to act reasonably and properly. You need to ask if you have people with the dedication for the long-haul to make self-managing work. Don't have any one person do too much; burnout can occur and there are often only a handful of good volunteers.

If you decide to self manage you need to have a lot of built in checks and balances. I've heard of more than one self managed association being left high and dry when a Board member quits in a fit of pique or moves. I know of one association near me who found out the president had sold his home and moved when they found all of their records including people's personal information sitting in the garbage at the curb.

I would recommend a most excellent post on this subject from RobertL3 from 2005:
http://www.hoatalk.com/Forum/tabid/55/view/topic/forumid/1/postid/329/Default.aspx

Yes, thanks, Glen. Big help.

Marianne, could you tell us more? Anyone else? I'd like to know more about self-management experiences -- not just how well the Directors served and difficulties they encountered, but also about the task:

What is there to manage, what does the BoD try to accomplish, what are there regular duties? How large is the HOA, with what kinds of dwellings? What common properties and amenities need to be managed?

I've offered that for my HOA. I'd like to hear from more of you -- are your self-managed Associations (BoD w/o MC) similar to mine or smaller? Mostly single-family homes with perhaps a few common properties and no high-maintenance amenities?

Tracie,

I thought I remembered your situation correctly. IMO, your assn is NOT self-managed.

WOW! Don't you ever feel guilty about your HUGE salary?

MichaelK
We are 112 paired patio homes, 13 single homes, restricted to age 55+ owners, 3 ponds, 1 gazebo, 2 entrace islands, 1 small nature preserve. Our demographics probably have something to do with the management of our community. Several of our people are disabled and really not able to help in any way. We also have several elderly widows in the community who are from a generation where the husband took care of everything so many (not all) have no concept of managing a home or a community. So we begin with a reduced field of eligibles to serve on the board.

The regular duties fall heavily on the treasurer. He collects the mail from the post office, has built in checks and balances in the system, deposits checks, keeps the books, writes checks, maintains receipts, monitors the budget. In words, that may not sound like a lot, but it is a very time-consuming job. And, in our over 55 community, it is rare to have a problems with collecting dues. I can't imagine how troublesome it would be to be in a community where residents are frequently in arrears.

We maintain beneficent activities -- cards to the sick and hospitalized (a lot in our community), donations to charitable organizations in honor of deceased owners or their spouses, cards to residents who have lost children or parents, welcoming packets for new residents. Most of these items need immediate attention so there can be little lag time.

Social activities -- for the past two years we have had a late summer ice cream social with entertainment. That requires hiring entertainment and all the arrangements that go along with that. The social means planning in advance, carrying out the function, and cleaning up afterward. We decorate the gazebo for fall, at Christmas, and with patriotic paraphernalia from Memorial Day through July 4th. That requires planning, buying or storing decorations, coordinating a decorating group.

Administrative activities -- Planning for the monthly board meeting and the annual meeting requires an agenda, preparing handouts, preparing for each year's election of directors. We also produce a monthly newsletter which requires preparing it, having it copied and hand delivering.

Contract activities -- We contract for snow removal, grass mowing, edging, trimming shrubs. We also contract for pond maintenance and lawn maintenance. Our CC&Rs do not require a membership vote so the BOD asks for bids and chooses next year's contractors. These things are not a problem. They can be handled routinely. The problem is the many phone calls to board members about grass, edging, ponds, snow, trimming. Sometimes, if a resident doesn't get the answer s/he wants from one board members, another board member will be called. This year we tried to have people put their complaint in writing and send it to one particular director. That worked (with a lot of grumbling) for a while, but after a few months the phone calls began.

All of these things require great effort, knowledge, and time. I haven't even mentioned familiarity with the documents and irritation with the way they are written which is sometimes so obtuse as to not be understandable. Nor have I mentioned architectural review, which can be a real headache. The other thing I haven't mentioned is the resident who came to me with a complaint about the name her neighbor had called her and wanted me to solve it. Oh Puh-leese

I must stop now because I'm off to a luncheon, but I may add to this later.

Our bank will allow lockbox payments, at a cost of about $5/owner (per month!). Cost prohibitive for us...but otherwise, it can be an OUTSTANDING idea! Check it out! It might work for your association!

Thanks for your very detailed answer. It does look like a lot of work.

You don't have a swimming pool, like some do -- I was wondering if any HOA with a swimming pool was self-managed.

You have more common assets to manage than our grassy common areas -- perhaps not more real estate; but certainly more interesting stuff, which requires more work. Your situation is different from us. We have quite a few retirees (although currently none on our BoD), but you have many more; as you noted, you also have residents who are not available to help out.

My community probably could not handle that without a management company; but if your community finds it has the resources (people with time and ability), then do you think in the end you all prefer doing that work together, rather than just paying a professional to do it?

Michael, are you on the board? Who does the mowing and monitoring the sprinklers? Do you have an annual contract for the mowing. I can see that with 7 people on the board, you probably don't need a MC. What other issues do you face? With some 300 homeowners, there must be about 300 opinions floating around. With an annual fee of $260, and few expenses, your HOA must have a good reserve or contingency fund. Of course, Texas has a longer, hotter, and dryer grass/sprinkling season than we do so there could be a substantial expense there. What about architectural standards? Are your residents pretty free to do what they want? Any rules and regulations to be broken and violators notified?

I am on the BOD for a SFD community with 187 homes. Although we have a management company, we basically consider ourselves self managed at this point because of the poor service we receive. We do our own treasury/accounting duties, our own monthly meeting minutes, news letters, annual billings, title company status letters, etc.. We also have two community volunteers that walk the neighborhood looking for violations. They knock on doors, give first notices of violations, take pics and request 2nd and final notice violation letters from the management company. No one in the community is paid for their services. That would be a huge conflict of interest. If you are on the BOD you can not charge for services. It is strictly volunteer. Check the applicable laws and your governing documents, as well as the wording in your insurance policies. You could very well be opening yourself to lawsuites.

Although we are a small community and manage quite a bit ourselves, we are currently looking for a new management company. The president and vice president are electing not to serve another term, which has made us take a long hard look at our future as a community. We want our community to be taken care of well after any one of us leave the board.

Thanks, Michael,

Your annual income is more than our annual operating budget, but you definitely have fewer expense items. I DO remember your posting about the lawsuit (the photo shows a really beautiful community), and that certainly is a good reason for all of us to attend to a reserve or contingency fund.

Since you have a demonstrated interest in your community, I'm thinking you might be a very good board member!

Sandy,

Trust me, I know from experience exactly why Roger said: "it is difficult to find and keep board members unless you get a MC who does most of the duties." In many communities it's very difficult to get board members who are willing to do all the work necessary to manage an HOA. In fact, it's difficult to even get members to agree to run for a board position in a community that is professionally managed. There are 1,700 homes in my community and we very rarely have anyone but an incumbent board member on the slate each year. Getting members to volunteer to "help out" a few hours a week is in no way asking for the same committment to serve as being a board member.

I wonder, where did CityO -- go??? Do you think she's out looking for a management company?