According to the Foundation for Community Association Research, there are over 350,000 homeowner associations in the United States, housing over 75 million people. HOAs offer plenty of benefits, both from a property investment and a lifestyle perspective.
However, these communities aren't created equal. While some are thriving, others are downright dysfunctional, run down by corrupt and self-serving HOA boards. You don't want your community to turn out this way.
Often, the quality of HOA management is what makes the difference between a failed and a successful association community. In today's blog post, we're revealing some of the best practices for effective HOA management.
Read on!
Professional Financial Management
HOAs collect monthly fees and other dues from homeowners. With over 27 million housing units paying about $191 a month, HOAs in the country are collecting over $5.1 billion a month.
Whether your HOA is collecting a few hundred thousand or millions of dollars, one thing is needed: professional management of those funds. It's from these collections that an HOA finances its operations, including:
- Paying staff salaries
- Paying vendors/service providers
- Maintaining a reserve/emergency fund
- Maintaining communal assets.
Successful communities hire experts to handle the collection and budgeting of these funds. A community must be able to live within its means while providing quality services to the residents. Mismanagement or embezzlement of funds can bring service delivery to a halt, much to the dissatisfaction of the residents.
Transparent Communication
Every HOA has a system of governance. Homeowners typically elect a handful of residents -- usually volunteers -- to serve on the community's board, which is the top decision-making organ. Once in office, board members, led by a president or chairperson, will oversee the formation of committees to handle various facets of the community's management.
Transparent communication between the board and the residents is a cornerstone of successful HOA management. The board must keep homeowners informed on every decision they're taking on behalf of the community, and enable active participation where necessary.
For example, an HOA board cannot unliterally change the community's bylaws. Issues that require a vote by homeowners must be communicated openly and voters given adequate time to deliberate on them before voting.
Secretive actions by the board will only nurture distrust in the community, and a homeowner revolt can ensue.
Steadfast Rule Enforcement
HOAs have rules, and there's no shortage of rule-breakers in these communities. Left to their own will, these rule-breakers can wreak havoc and turn the community into an unlivable place.
It's for this reason, consistent rule enforcement is one of the best HOA practices. The board, or the management company acting on its behalf, must not shy away from taking the necessary enforcement measures whenever a rule is broken. Enforcement must also be fair and transparent; otherwise, claims of favoritism will arise.
Embrace HOA Management Best Practices
Transforming an HOA into a thriving community requires top-notch HOA management. These best practices can help boards steer their communities in the right direction, but even the most competent boards can come up short. The input of a professional association management company is invaluable.
For HOAs in Phoenix, AZ, PMI Phoenix Valley is the go-to association management company. We offer top-notch property management services to associations, ensuring real-time updates and access for homeowners and tenants.
Schedule a consultation to learn more about our services.
