Many communities have come to a decision point while living in their association to either continue with a management company, or self-manage. Many cite reasons of poor management, or too costly, or “We can do this ourselves.” It may work well for communities that make this leap, but consider the option to be managed by an effective management company that is efficient, takes care of your community as their own, and most importantly, listens to the board and community.
Below are some reasons why an experienced manager can be worth the few extra dollars to manage your community:
Insufficient Knowledge and Understanding of the Covenants, Bylaws, and Laws
If you decide to Self-Manage, your Board members need to get a thorough understanding on homeowner association management to develop the know-how and properly manage your Virginia community association.
Do you have the software, storage space, filing system, collection and invoicing capability your community association will require to collect payments and pay contractors in a timely manner? Attention to accounts should be almost daily, and there is usually checks to be written weekly. A complete accounting system should be in place to record all transactions and create monthly financial reports available to the Board members. If self-managed, it is critical to put a system of checks and balances in place to review all bank statements and financial reports to account for all income and expenses.
A self-managed community can no longer point a finger at the association manager. They must meet their neighbors face to face to explain decisions made or cite them for violations. You will need to send out collection letters, enforce the rules, and file liens against them if they become significantly delinquent. You have a fiduciary responsibility to enforce the Covenants and act in the best interest of your community even if that means jeopardizing your relationship with neighbors.
Critical Control Measures
Management of a community association means you have a duty to protect the association’s assets from theft, embezzlement or accident. You may require insurance, and perhaps a bond to cover everyone who has responsibility in the association. Insurance should also cover theft, dishonesty, and embezzlement or other crimes associated with loss of funds. It would be nice to trust everyone, but security of your community should come first. When you look into case laws associated with uninsured claims against a community, you will see that the risk is real.
Volunteers to Oversee the Community
When it comes to making a decision to self-manage, many raise their hand to volunteer time to manage various tasks associated with managing an association. What happens when volunteers let their day-to-day life get in the way of this responsibility? What happens when contractors are not doing what they are tasked to do, or the pool is in bad shape, the clubhouse needs repair? Your volunteers may have good intentions, but how do you hold them accountable. What happens after frustrated volunteers decide to no longer perform? The responsibility eventually falls on a very few, and how long will it take before they are burned out and realize they are being taken advantage of? What happens when you need volunteer support and no one shows up?
You Don’t Have to be the Bad Guy
If you hire a professional management company with seasoned professional managers, you no longer have to worry about confronting neighbors about late payments or cite them for violations. Your manager will be the recipient of the nasty calls by neighbors when there are complaints about Board policies.
Your Management Company is Fully Insured
State law requires full insurance to manage homeowner associations to include a bond for theft, or other crimes. They pay the fee so you don’t have to.
Your Management Company Will Manage all Vendors and Property Maintenance
Sending out a Request for Proposal, interfacing with contractors, ensuring they are complying with the task, and ensuring they are paid in a timely manner now falls in the hands of your manager. All you have to do is make the decisions presented to you, and praise the work done. Plus, you as the Board receive the credit from your community.
Your professional manager will have the infrastructure in place to ensure proper accounting practices, ensure association fees are collected, manage the budget, pay vendors, and completely maintain the books, while providing the Board a monthly report detailing the activity in the past month. They will also be the ones to coordinate liens on properties who are significantly behind, allowing neighbors to remain friends.
While many homeowners can sit around a table and complain about paying association dues and particularly question the need for a management company, they are truly taken aback when realize the responsibilities. When you ask them who will take on the responsibilities to self-manage and list what is required, how many will raise their hands? How many will keep their volunteer position after a year? After a year, how many will say they would gladly pay that extra fee per month? Be sure everyone is aware and prepared to take on these responsibilities of association management before they decide to self-manage.
Diamond Association Management has over 15 years of management experience proudly managing Home Owner Associations in the Hampton, Newport News, Williamsburg, and Yorktown communities. Having over eight years of association management experience specializing in medium to large communities, we have created an excellent reputation for personal, professional, and competent association management.