SIX REASONS YOUR HOMEOWNER ASSOCIATION SHOULD SELF-MANAGE
December 1, 2011
As a property manager for over 15 years, I’ve seen the signs of clients being ready for self-management. It’s been logical for our firm to recognize the signs rather than have a long drawn out relationship where neither one of us wants to be the first to say goodbye. In most of these relationships, we saw the signs and informed the client with 30 to 90 days notice, we aren’t going to seek renewal of the contract. Others, we hung onto with resentments building on both sides. There are signals that it’s time to go to self-management; I’ve highlighted my top five:
1. The expenses for the Association are mostly fixed. The utility bills and the vendor contracts are already identified and active, requiring very little decision making on a monthly basis. Online payments can be scheduled through your bank account, with bills being reviewed by a Board Member to prevent overcharging.
2. There’s minimum contact with your Manager/Management Company. If the main function is to collect assessments and have a central/neutral point for communication there are other remedies: An accounting firm, a drop box on-site, an interactive website, etc.
3. The Board of Directors is functional and capable of making decisions. Sometimes management companies protect the Board from itself and the Association! Why this happens is another discussion, another day. If the Board is comprised of mature level-headed individuals with the Association’s best interest at heart, you’re 80% there!
4. There’s no major capital renovation scheduled. Newer developments (less than 10 years old) rarely have major projects scheduled. If the Board has someone with construction expertise, you may still be set to self-manage. Obtaining bids for work isn’t rocket science.
5. You’ve got strong legal counsel. They don’t have to be on retainer, but they should be on-call! If the Association has delinquent owners, or wants to change/enforce by-laws, you want to be able to get legal advice on short notice.
6. Cost cutting is essential! In this bad economy, delinquent assessments and rising costs take a toll on small associations. No management company values your asset as much as you do! You’ve got to maintain the value of your home through maintenance, amenities and curb appeal. It’s a bigger ticket item and something’s got to give…
It may sound daunting, but it can be done! As a Board of Directors, make a written list of your real concerns making the switch. Then, one-by-one, identify the solutions for each problem.