Self-Management vs. Professional Management: Weighing the Pros and Cons
Homeowners Associations (HOAs) and Condominium Owners Associations (COAs) are organizations responsible for the management and upkeep of common areas, facilities, and services within a residential community. These associations are typically comprised of volunteer residents who take on various roles, including managing finances, organizing events, and enforcing rules and regulations. However, some communities choose to self-manage their HOA or COA instead of hiring a professional management company. In this article, we'll explore the pros and cons of self-managing an HOA or COA.
Pros of Self-Management
Cost Savings: The primary advantage of self-management is cost savings. Professional management companies charge fees for their services, which can be significant. By self-managing, HOAs and COAs can save money that can be used for community improvements or saved in reserve funds.
Control: Self-managing gives residents more control over the decisions that are made within their community. They can choose how their money is spent, what services are provided, and how rules and regulations are enforced.
Community Involvement: Self-management can also foster a greater sense of community involvement. When residents take an active role in managing their HOA or COA, they are more likely to feel invested in the success of their community.
Flexibility: Self-managed associations have more flexibility when it comes to making decisions. They can adjust their policies and procedures to fit the unique needs of their community without having to go through a management company.
Cons of Self-Management
Time Commitment: Managing an HOA or COA requires a significant amount of time and effort. Self-managed associations need to appoint volunteers to take on various roles, such as accounting, maintenance, and enforcement. These volunteers may have other commitments that make it challenging to devote the necessary time to the association.
Lack of Expertise: Professional management companies have expertise in managing HOAs and COAs. They have staff with specialized training in accounting, maintenance, and legal matters. Self-managed associations may not have the same level of expertise, which can lead to mistakes and inefficiencies.
Legal Liability: Self-managed associations are responsible for ensuring that their policies and procedures comply with all applicable laws and regulations. Failure to do so can lead to legal liability and financial penalties.
Limited Resources: Self-managed associations may have limited resources when it comes to managing finances, maintaining common areas, and providing services. This can lead to deferred maintenance and a decline in the overall quality of life in the community.
Self-managing an HOA or COA can be a viable option for communities that are willing to invest the time and effort required to manage their affairs. However, it is essential to carefully consider the pros and cons before deciding to go this route. Self-managed associations should be prepared to take on the responsibilities that come with managing their community and ensure that they have the necessary expertise and resources to do so effectively.
Alternatively, professional management companies, like Kiley Management, offer a wide range of services that can help ensure the smooth operation of an HOA or COA while alleviating many of the burdens of self-management.