HOA Management: Should Your Community Self-Manage or Hire a Pro?

Posted by Meigan Montoya on March 22, 2019

Ah, the age-old fork in the road: do it yourself, or hire someone else?

This is a decision everyone faces more times in their life than you'd think. Whether it's planning a wedding, cleaning your house, or even going grocery shopping, there is always an opportunity to have someone else shoulder the burden of work.

In just about every case, that means a higher standard of work is being done. But, contrary to popular belief, you don't always NEED a professional to do the job right. (It's at this time that I must advise that you leave SOME things to the professionals, like maybe blow torching, scuba diving, and body modification.)

Luckily, self-managing your association doesn't have to be on that list.

What Self Management Means

Self management means the community association handles all of the responsibilities that come with operating a homeowners or condominium association, rather than hiring a Property Management Company (PMC). It's a popular option for very small associations and very large associations alike because it gives the community almost complete control over all of their information.

But self-governance doesn't necessarily mean that volunteer board members have to do all of this work on their own.

Many self-managed associations hire a licensed management professional to handle the bulk of their affairs. This is a popular choice because it helps alleviate the burden of responsibility on volunteer board members, while still letting those board members and the association retain complete control over the association finances and information. 

Of course, this is what you get with a PMC as well. The most important difference is that with a CAM directly employed by your association, your Self-Managed Association (SMA) is their sole focus. A manager who works for a PMC is usually in charge of a portfolio of community associations, meaning they probably have a lot more on their plate than someone dedicated to just you and your needs. 

If you're bringing on a licensed manager, it's important to remember that they work for the community, and they'll be handling a lot of work all for just you and your association. Being a resource for them and supporting their needs is a key component of a healthy working relationship between the board and the community association manager. 

Regardless of how you choose to do it, there are a few things you can do before choosing to self manage:

  • Brush up on your legal knowledge, so that your association is compliant with the expectations of your state regulations. For example, if you're in the state of Florida, there are a ton of rules and regulations that you have to follow, both for HOAs and for Condo associations. Many other states have followed Florida's lead and implemented their own laws, so knowing your individual state statutes about meeting notices, document records keeping, etc is very important. Maintaining compliance will be a far easier task than establishing compliance. 

  • Draft a communications strategy. If your community chooses to hire a licensed community manager, they will be the primary point of contact for all of your homeowners, and this is by far one of the largest responsibilities they will be taking off of your plate. Creating at least a tentative plan with your board about the kinds of communications you hope to have with your homeowners and the frequency at which those communications are made is a great way to help build a solid foundation for the community's success.

  • Really understand the community's governing documents. You're expected to uphold those already as a board, but with the whole of the community success resting on the shoulders of a volunteer group and a single community manager, that responsibility takes on a much more serious meaning when self-managing.

  • Understanding and accurately presenting financials, and consistently ensuring the financial stability of the association. Anything short of financial accuracy could end up looking like fraud or financial mismanagement, and especially when the money isn't technically yours to mismanage, it's important to understand the financial responsibilities before taking on the job.

  • Being present at ALL of the board meetings. This is obviously true even if there's a management company supporting the board, but especially when self-governing, the community management with the assistance of a manager, it's imperative that the management team be as consistently present as possible, or you risk looking like you don't know what you're doing, or that you don't care about the needs of your homeowners. In a way, your management team creates a single, first-and-only style line of defense for the actions of the community.

  • Establish a system of record. Another major component of community management is the software platform with which you handle your records keeping, and having a predetermined method of record and document management in place  is another key component of creating a stable foundation for community success. If you're bringing in a manager, this will be especially helpful to establish prior to their hiring.


How to Self-Govern Without Losing Your Marbles

It's a lot of work. It's a serious time dedication and involves no small amount of self-sacrifice. At the end of the day, that's one of the most frequently cited reasons management companies advise against self-management. And they're right, the workload is substantial, especially for mid-sized associations. So if you're weighing the various management options for your association, and know that you want more freedom to delegate your responsibilities, and a hands-off approach to the community, a property management company is definitely an option to consider. 

Self-management, while time consuming, is not impossible. It just means you and your board have to really want it, and you have to have the right kind of support to make that workload easier:

Hire the Right People

Bringing in the right professionals will make self-management exponentially easier. 

  • Licensed Community Association Manager - it's important to note that while there are currently no federal laws concerning community association management, in the state of Florida, all property managers are required by law to be licensed. While this isn't a requirement for all states, hiring a licensed community association manager to oversee your community can be an effective tool in self-managing your association
  • Community Accounting Firm - if you want to find a happy middle ground, bringing on an accounting firm that specializes in association financials is a way of sharing the burden with industry pros, while keeping control over the majority of the responsibility. 
  • Attorney Versed in Community Association Law - your community is a legal entity, and as such is subject to being held legally accountable if and when things go a little (or a lot) wrong. It can happen to the best of us, and in the event that you find your community embroiled in a legal battle, having a lawyer versed in community association law will be a huge help. 
    Please also note that while we often discuss legal issues and can provide information about existing statutes, TOPS Software cannot offer any legal advice, and advises that you always refer first to your community attorney.

Get the Right Tech

Like any good DIY project, you've gotta have the right tools, and the right training. If you feel that self management is in your cards, a software solution that can automate your responsibilities is the best approach to take. 

  • Customer Relationship Manager (CRM) - A cornerstone of good community management is communication with your homeowners. This doesn't just mean face-to-face interactions, this means the emails you send out, the violation notices that you post, the collections that you have to enforce, the meeting notes you have to keep, and more. A dedicated platform that includes a CRM with components like an owner information portal will be a huge help in keeping your homeowners informed and happy.
  • Reporting and Automation - Even with the assistance of a community manager or community accountant, reporting can always be made simpler. Automating your community reports with a software solution is the quickest, most efficient way to reduce the time spent on those reports, and allocate more time for more important community needs.
  • Any time, Anywhere Access - At the end of the day, you're a person, and you're a person with a lot of responsibilities that will frequently take you and your management team away from the board room (or office, or neither if your community doesn't have the infrastructure to support a management team). Your ability to effectively self-manage your association shouldn't be hindered by your physical location or the device you have access to, it should be able to support you at all times. 
  • Unlimited Access to Data - The biggest perk of self-management is the control aspect. It's comforting knowing that at the end of the day, your community is the one in charge of your community (as redundant as that sounds) and having unimpeded access to community documentation, and an unlimited amount of space in which to store that data is crucial to that control. 


Create a Strategic Plan

A strategic plan is a way to determine and set overall goals for the association, and to help implement the steps needed to achieve those goals. If you're bringing on a CAM manager, this will be a vital instrument in helping them understand your community's needs and the expectations they'll have to meet.

  • Set Reasonable Goals - As ambitious as you and your community management team may be, it's important to be realistic when determining the goals of the community. Make sure they're deadline-driven and have metrics to gauge success. 
  • KISS (Keep it Simple, Stu) - If your plans are too in-depth, no one will read them or think to maintain them. Zero in on the tasks that are manageable and attainable, and make them your team's focus.
  • Flexibility is Important - Your community will experience plenty of ups and downs, many of which may be outside of your control (like a hurricane or other act of nature), so keeping a strategic plan that allows for change when necessary will be a serious benefit if and when the time comes to reposition your strategy.

At the end of the day, we can't answer the question, "Should You Self-Manage or Should You Hire a PMC?" That's a very personal decision and it's one you and your board need to make as a collective with the information you have at your disposal. What we can do is tell you that it doesn't have to be scary, and TOPS [ONE] is a tool that can help your board, your accountant, or your management company get the job done right.  

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