Self-management vs HOA management is a major decision that small associations must make. Many communities start out self-managed, but as responsibilities grow, some boards look for professional support. Both choices have pros and cons. In other words, the correct answer depends on the community itself.
Self-Management vs HOA Management: Which is Better?
Every HOA or condo association has a board of directors tasked with the job of keeping the community running. These directors are volunteer homeowners elected by their peers. As volunteers, board members don’t receive compensation, but they must still manage a multitude of tasks.
Volunteers are not professionals. Board members usually have families, careers, and personal lives outside of the association. Being on the board is a big commitment, and it also requires quite a bit of skill.
While some boards continue to operate alone, many others choose to hire professionals.
What is Self-Management?
Self-management means the board does all the work. The board collects dues, pays the bills, and enforces the rules. They also schedule maintenance, manage vendors, and respond to homeowners.
Self-managed communities often choose this route because it saves money. Board members also retain full control. Yet, there are also challenges to self-management. It takes time and knowledge, and an error in judgment can quickly lead to costly consequences. Plus, many board members are uncomfortable enforcing the rules against neighbors and friends.
What is Professional HOA Management?
Professional HOA management means hiring a company to help with operations. With this option, the company takes care of the day-to-day tasks. This includes finances, rule enforcement, vendors, and communication.
Even with professional management, the HOA board is still in charge. The manager doesn’t make decisions for the community, as they are not on the board. Instead, the manager follows what the board decides.
In other words, the board leads, and the manager assists. The main benefit is that board members no longer carry the full burden of managing a community alone.
Self-Management vs HOA Management: A Comparison
When looking at HOA self management vs manager services, the differences are apparent. Below is a comparison of the two types of management.
1. Experience and Expertise
Professional managers have training. They understand HOA laws, accounting, and best practices. They know how to prepare budgets and enforce rules.
Meanwhile, self-managed boards may not have this background. This means they have to learn as they go. Sometimes, that works, but it can also lead to mistakes.
2. Time Commitment
Time is one of the biggest concerns in self-management vs HOA management. Self-managed boards spend hours each week on HOA work. Nights and weekends are often blocked out for association matters, too. With self-management, burnout is common.
In comparison, a manager can handle these tasks with ease. It is literally their job to manage the association. This leaves room for the board to focus on decisions instead of administrative work.
3. Vendor Network
Management companies typically have established vendor contacts. This gives them access to better pricing and services. They already know who to call in the event of a maintenance issue or an emergency.
On the other hand, self-managed boards have to start from scratch. They must go through an extensive vendor selection process, which doesn’t always guarantee the best candidate. These communities might end up paying more or hiring unreliable vendors.
4. Accounting and Financial Management
Managing an association’s finances is perhaps the most complex job of all. Dues collection, bill payment, financial reporting, tax filings, audits, and reserve studies all fall under this umbrella. For volunteers, it can be a lot.
With managers, associations are less prone to mistakes, which can snowball into bigger problems. Management companies usually have access to accountants and financial software. This leads to more accurate records and fewer errors.
5. Rule Enforcement
Rule enforcement is not easy, especially for self-managed HOAs. Board members may not want to fine their neighbors, as it can feel too personal. This can also create tension.
In contrast, managers can enforce the rules as a neutral party. This keeps enforcement fair and consistent. They can conduct inspections, send violation notices, and implement the board’s decisions.
6. Homeowner Communication
Another area in the self-management vs HOA management debate is communication. Self-managed boards have to answer calls, emails, and complaints themselves. This takes time and energy. Homeowners can even call in the dead of night, causing a disturbance.
Meanwhile, management companies have staff who can take care of communication. They can provide everything from newsletters and online portals to written notices and bulletins. Many companies also offer 24/7 emergency hotlines.
7. Legal Compliance
Associations must follow federal and state laws as well as their own governing documents. Self-managed boards may not know when laws change. They also might be unaware of the rules that apply to their association.
In comparison, managers are constantly updated on the latest legislative changes. They can also ensure the association remains compliant with all laws and stays out of legal trouble.
8. Management Software
Most management companies use software to streamline operations and integrate systems. Self-managed boards may not have access to these tools, making their operations slower and less accurate.
Common Concerns Over Professional HOA Management
When it comes to self-management vs HOA management, boards usually have two main concerns: cost and control.
Management fees can seem expensive. Small HOAs, in particular, may think they can’t afford them. That said, fees often pay for themselves in the long run. Managers can negotiate contracts, streamline operations, and prevent mistakes. They can even help the association avoid legal disputes, which can save thousands.
Control is the other concern. Boards fear losing authority, but this is not the case. Association boards still retain the decision-making power, with the manager following those decisions. The manager can’t make rules or spend money beyond a specific amount without board approval.
Do Small HOA Communities Need an HOA Management Company?
Small HOAs often believe management companies are only for large communities. This is not true. Many companies offer à la carte services, which means the board can choose only the services it needs.
For example, one HOA may outsource accounting but keep rule enforcement within the board. Another HOA may handle vendors but hire help for communication. This flexibility makes management possible even for small associations.
This means that self-management vs HOA management is not an all-or-nothing choice. Boards can combine both. They can stay within budget and still get professional support.
Self-Management vs HOA Management: The Bottom Line
Both self-management and HOA management come with pros and cons. It is important to consider the community’s needs and budget to know which option suits the association the best. Some HOAs thrive with self-management, while others succeed with professional help. Many even use a mix of both.
Hillcrest offers HOA management services to communities in Chicago. Call us today at 630-627-3303 or contact us online to request a proposal!
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