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HOA Management, A Reality Check for Board Members, Management and Homeowners

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Having professional management, especially in these times of economic down turn, is more important than ever. With the continuing barrage of laws being passed related to our industry, combined with the statues already on the books, not to do so would be like going into court without an attorney, you can do it, but the results are usually poor and sometimes disastrous. Professional management companies regardless of their size try to provide a magnitude of services for the best possible base price. We are able to offer our services using “economy of scale”, this put simply, we offer procedures that are streamlined in-house in order to provide service at a “drastically reduced rate”. Most management fees would not even cover the cost of accounting if done by a third party. These methods may vary slightly from company to company but essentially they accomplish the same task. Using this “economy of scale” has been successfully used for many years.

The manager of today, for the most part is a highly trained professional, whereas in the 80”s when I began my career, we flew by the seat of our pants. We went into the field with maybe a pager, stopping to find a payphone (for those of you under thirty google it); we worked with no historical knowledge and/or case law to draw from and no central informational source. I remember the first time we shared a printer, oh how amazing! Today we are attached to our cell phones, network computers, PDAs, netbooks, etc. with the expectation to respond immediately to the onslaught of electronic communication at all hours of the day. We have organizations to provide training material, shared historical knowledge and industry wide efforts focused in many, many areas. So things are going great, right?

One thing that has not changed is the available time frame to accomplish day-to-day management, the “drastically reduced rate” for the “economy of scale” has become the expected norm from which more services are not only expected but demanded without even the consideration of a fee increase. In addition there are now more people involved in the day-to-day operations, each one having a specific area of responsibility, the manager is now also responsible for not only for their work, but the workload of all related parties. This combined with the evolving communications and expectations have by far overshadowed any time saving innovations and/or added personnel to compensate. For being a trained, highly skilled professional, my current salary is within 10% of when I began CID management almost 3 decades ago, when I had no training and little to no knowledge. This equates to about the same hourly wage as the person that picks up after the dogs. Although the complexity, stress and volume of the work have steadily increased, fees for providing these services have not.

THE INDUSTRY MUST CHANGE, WE MUST CHANGE

To the Management Companies; You expect highly trained individuals to work, dealing with high stress employment, working unsupervised sometimes with little or no support, taking the brunt of the fallout usually for things they have no control over, for salaries that equal the hourly wage of untrained personnel doing manual labor. Oh I can hear the groans now! How can we pay more with current fees, we are loosing money to lack of transfer fees, our competitions low-balling proposals, the market will not bear it, etc. You are right! Whose fault is that? Quit giving away the store. The level of service we/you provide for the fee currently charged is ridicules, I repeat, quit giving away the store!

To the HOA Board’s; You expect your manager to be completely qualified, to be an expert as a handyman, a lawyer, an accountant, a painter, a landscaper, a contractor, have an understanding off the top of our head of finance, document interpretation, be a perfect minutes taker, a eloquent public speaker and competent contract/dispute resolution mediator and sometimes a counselor. We are further expected to do this all without even the smallest mistake to avoid reprimand and sometimes-outright public and private abuse. The fees being paid for the services you receive are completely out of balance and have been for many years. Management companies were able to make up the difference with things like transfer fees on sales in order to survive. Those days may be gone for good. Your choices, pay management companies what their service is worth, be satisfied with the underpaid/untrained or do it yourself. A year of doing so may be enlightening. Yes, there will be the management companies that will not adapt to this new reality, they will not be able to provide the quality management with experienced managers and at some point that will be a downfall of us all.

To the Homeowner; We are not your assistant, financial adviser or nurse. Take some responsibility for your life, you purchased a home in an HOA, go to the Board and Annual meetings, read the documents, abide by the deed restrictions and pay the fees. It’s an incredible value for the money.

To the Managers; Good luck, as us old, experienced guys prepare to retire I wonder where the next generation of quality managers will come from?

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