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Risks of an HOA Without a Manager

Risks of an HOA Without a Manager
  • March 19, 2019
  • Blog

HOA Without a Manager? Why This Could Go Wrong

Managing a homeowner’s association (HOA) is the primary responsibility of the board of directors. Homeowners rely on the board to make decisions that are in the best interests of the community. In some cases, the board may believe that not hiring a manager to oversee the daily activities is a good choice because of the financial savings. However, there are risks when you don’t have a manager or professional management company to handle the planning and day-to-day responsibilities of an HOA.

Risks of an HOA Without a Manager

Before choosing to self-manage an HOA, board members should consider the risks of an HOA without a manager.

  1. Greater chance of lawsuits.
    Board members are often not fully aware of all the steps they should be taking to minimize risk for the HOA or what types of insurance they need to protect the organization from a lawsuit. Property managers can audit existing procedures and policies and make a recommendation to minimize the chance of a costly lawsuit.
  2. Noncompliance with Laws.
    Board members are not always knowledgeable on the ever-changing laws. Without realizing it, they could make a poor legal decision. Property managers are typically well-versed on legal restrictions, reducing the chances that the HOA will break the law and the repercussions that could follow.
  3. No Accountability.
    Who holds the board of directors accountable for their decisions? In most cases, nobody does unless homeowners take action. With no accountability, board members are free to make promises without follow-through or make decisions that only benefit themselves. When a third-party is responsible, the board can hold them accountable for their actions and vice versa.
  4. More Difficult Conversations.
    If board members don’t agree on decisions or strategies for implementing ideas, it can lead to difficult conversations during meetings. By hiring a manager, the board has access to a third-party that can help them come to a decision promptly.
  5. Inefficiencies.
    Board members volunteer their time to the HOA, but they still have other commitments to take care of. Depending on how busy there are, things get overlooked or forgotten. A property manager is dedicated to taking care of the daily tasks and making sure all parties stay on track over time.
  6. Lack of a Neutral Party.
    While the board members may be part of the community, their interests don’t always match the majority. If a board is left free to make decisions as they see fit, homeowners can quickly become disgruntled. A property manager is neutral and can see problems from both sides and allow them to act as an advocate for the team that will reap the biggest benefits for the community as a whole.
  7. No Point Person.
    Homeowners need a specific person or number to contact with questions and emergency issues. Unless the board wants to field calls any time of the day, having a point person or manager streamlines the process.

AR Management helps associations with their property management needs, including maintenance and financial activities. Contact us today to learn more!