One of the critical business functions that a community management company can help your association with is financial management. While many companies may offer the services below, keep in mind that not all management companies are created equally and the quality of the service will depend on the company’s investment in technology, its staff, and the standards to which it adheres. We’ve come up with a few examples of what partnering with an experienced, local management company do for your board and community.
Further, a professional community management company can take care of many of the time-consuming business aspects of the association, giving board members the time to focus on other areas of the community. Choosing an experienced management company to partner with provides boards with not only access to trusted guidance, but also tons of resources that will make your time as a board member that much easier. The HOA should also be sure that the company will provide the services they need when they are needed.Being on your community association’s board of directors can be a tough (and sometimes thankless) job. It is also important to keep in mind that fees should not be the only factor in choosing a management company. It may be possible to eliminate another service that is not used regularly in order to incorporate the extra duties and still keep the fees reasonable. For example, if there are items that are constantly falling under the “extra fee” portion of the management company bill, it may be time to negotiate with the company to have those repeat fees included as part of the contract. Should a management company charge excessive fees, it may be difficult to balance that budget. Why HOAs Need to Watch Management Company FeesĮvery HOA should operate with a budget. Scheduling maintenance and overseeing contractorsĮxactly what services the management company will provide should be outlined in detail in the contract.Drafting and amending governing documents.Completion of insurance forms and tax returns.Communications, including answering phones, responding to emails, etc.Services vary greatly between companies but there are some standard items provided in most management company contracts. What Are Typical Management Company Services Keep in mind that if your HOA decides to change companies, there may be a transition fee to cover the costs of the old company providing information to the new company during the transition phase. It is easier to negotiate a contract with new terms annually, and the shorter term allows the HOA to choose a different company should they not be satisfied with the original management company. Most HOA management company contracts are for one year, and it is not recommended that the HOA agree to a longer term. Termination and transition fees – paid at the end of the contract and at the time of renewal.Extra services – charged for any services that are not outlined in the contract.Monthly management fees – should be clearly stated in the contract and must be paid monthly.Initiation fees – covers the day-to-day management of the community – these fees can range between $1,000 and $30,000 depending on the community.There are several items that should be standard in a management company agreement with an HOA. What Is Included in a Management Company Fee On average, management company fees range between $10 and $20 per month per unit, but it is important to remember that the more services you need from the company, the higher the fees will be. If the community has several communal areas and amenities, such as a pool and clubhouse that will require additional attention, the fees may be higher.Ī community with hundreds of homes would also generate higher fees as the management company will be responsible for collecting dues and dealing with complaints. The cost of a management company for an HOA will vary greatly depending on the company chosen, the services they will be required to provide, and the size of the community they will oversee. Understanding the fees charged by a company is critical to making sure the association is getting what they pay for and that all funds are handled properly. This leads many HOAs to seek the assistance of a management company whose responsibility is to handle the day-to-day operations. Because homeowner associations (HOA) are usually run by a board of volunteers, the board often does not have the expertise or knowledge to properly handle the managerial functions of the association.