The Benefits of Professional HOA Management for Your Community…

“Homeowners’ Association: the means whereby people who own homes are able to transfer their rights to the neighborhood control freaks.” 

– Most Homeowners

There are a number of benefits to having a professional HOA management company for your community. However, there are also a number of common misconceptions about professional HOA management companies that may make residents skeptical of the benefits of hiring one.

Before you decide that an HOA management company is NOT for you, make sure you know the truth about the company’s purpose.

An HOA management company does NOT replace the board…

The purpose of the company is not to replace the board. Rather, a company is brought in to help the board be efficient and effective. HOA management companies can offer guidance, but board members still make all key decisions.

HOA management companies ARE hands-on…

All good HOA management companies make themselves available for communication and inquiries.

A good HOA management company is NOT out to get your money…

It can be frustrating to get a violation notice from your HOA, particularly when a fine is also involved. However, homeowners need to know that any rules and regulations are not set by the management company, but by the board and/or the local government. HOA companies manage the fines, but this is a very small portion of their purpose.

A good HOA company SUPPORTS the board…

A good HOA management company will never seek to override the decisions made by the board. While they can offer guidance or suggestions for improvement, the board members always have the final say. Visit http://www.yourhoahelp.com for more!

At Your HOA Community Management, we will always treat homeowners and board members with the utmost respect. Remember, the whole reason we are in business is because of you.

Questions? Contact us anytime.

Social media should be just that…

These days, social media is everywhere. Facebook, NextDoor, and other sites are tools that residents can use to communicate socially with each other. Whether it be a social group or maybe you’re having a block party or planning a wine tasting, these are all great reasons to use social media in your community. But sometimes the homeowners use social media to report things they should report through other channels. For example, homeowners go on social media and say things like, “Something’s not working at the pool”, or “I got this letter from the HOA about my grass”…

What the homeowners are not aware of is that most management companies (including ours) don’t monitor social media sites. In this example, weeks go by with no response from the HOA and the poster adds even more posts, “Oh, my gosh, they haven’t take care of this! This management company sucks!” – But we as the management company are completely oblivious because it wasn’t reported directly to us.

The management company handles all of the financial aspects of your community along with the vendors, the payments/deposits, and the enforcement of the rules for the community among many other things. They are the best contact you have to answer direct questions about your association.

Next time you need answers, try the method above, then, if you wish, post on social media how it was handled by management. That way there is a happy homeowner with the direct answers to the issue and it was handled in a timely manner.

Questions about your association? Contact is anytime. info@yourhoahelp.com

Thank you for taking the time to read this! : )

So, You Hate the HOA… I Get it, I Did too!

When you hear the term “HOA” what is the first thing that comes to mind? If you’re like I used to be, your first thought is probably “Oh, wonderful! I get to live in a community where a bunch of people gets to tell me what I can and can’t do with my own home. This is going to be horrible.” Look, I get it. I really do. Who wants to be told what to do, especially in their own community? No one! When my family and I moved into our home, we had never dealt with an HOA before. We had no idea what an HOA was, let alone what role they played within a community. Sure, we were given all of the paperwork when we bought our home, but who really reads all of that stuff? (Note to self…and all of you faithful readers: Always read every important document that is handed to you. That paperwork has a lot of really useful information in it.)

So, there we were, living in an HOA community. Everything seemed to be going pretty smoothly until one day, seemingly out of nowhere, we were sent a violation letter about our grass being too tall. “What?! Are you kidding me right now?! How dare they send me a letter about my grass being too tall! Who do they think they are?! Who cares how tall my grass is? Why does that matter?! What about the people across the street? Why don’t they do something about them and all of their trash sitting on their porch? Send them a letter and stop worrying about my grass!” Yep, that was me. I couldn’t believe I was getting a letter! I mean, our lawnmower was broken, for crying out loud! How were we going to mow when our lawnmower only had three wheels!? Surely there were more serious issues within the community that were far more deserving of a violation letter than how tall our grass was, right? …Right? Oh, how I wish I could go back and educate my past self. I never realized how truly important an HOA really is.

You see, it was never about the grass. Not really. It was about keeping the community as a whole looking nice. If Homeowners Associations didn’t exist who would maintain the ponds? Who would mow the common areas? Who would repair the community pools? Who would take care of the trees? What about that neighbor that has a pile of trash on their back porch that you get the pleasure of staring at every morning as you look out your back window? Who is going to make them clean that up? Are you? These days that’s probably not the best idea. If no one took care of the ponds, or mowed the common areas, or made sure that all homeowners kept their homes looking nice, would you want to live in that neighborhood? Probably not. So, in order to keep the community looking nice, associations hire companies to do the work that it takes to care for the ponds, grass, trees, pools, trash… you get the idea.

From that day forward I started paying more attention to the HOA. I started going to meetings, talking to the neighbors and paying more attention to the parts of the community that I always took for granted before like the flowers at the entrances, or the fountains in the pond. I realized there is a lot more work that goes into this community than I thought. The other realization I had was that the board members, god bless ’em, are literally volunteering their spare time to handle all of the homeowners like me complaining, and all without getting paid. That is the moment when I thought to myself that maybe getting that letter wasn’t such a bad thing. It showed me that the board actually cares and that they want our community to look nice. Who knew all these years later what would happen…

I got a call one day from a friend of mine saying that the company she worked for had an open position and that she wanted me to apply for it. I was working at the time and I loved my job, but I am always open to opportunity. She wouldn’t tell me much to begin with but after I started researching it I realized it was (drumroll please)… that’s right, an HOA management company! What are the odds? I mean I just told you how much I used to hate HOA’s!

One of the funniest parts about the whole situation is that I began in the inspections department! (I swear I’m not making this up) – The very same department that wrote the letter to me about my grass being too tall! Imagine that! To be honest, I’m glad that I received that letter so many years ago. That letter gave me a real-life experience that I wouldn’t have gotten otherwise. I now have the ability to relate to other homeowners who receive letters about similar situations and tell them that I do in fact understand their frustration.

I appreciate you taking the time to read this story and remember that next time you get that letter, try to look at it from a different perspective. : )

Internal Fraud Controls to Protect Your Association…

Homeowners associations vary in size and complexity. The resources available to your HOA and the involvement of the board are key factors when determining whether to hire an outside accountant or management company, or to utilize the board to handle the finances.

The controls implemented will vary based on which direction you choose to go.

Let’s take a look at the controls that can be implemented for each scenario in order to best protect your HOA.

The amount of time required by board members is significantly less when an experienced management company is hired to handle the finances of the HOA. In this situation the board needs to be diligent and implement a system of checks in balances over the outside party.

The following are controls the HOA can implement in order to minimize any risk association with hiring a third party to handle the finances:

  • Have a board member receive a bank statement directly from the bank and review the bank reconciliation that is prepared.
  • Require that any invoices over a predetermined amount also require the signature of one of the board members.
  • Financial statements should be reviewed on a monthly or quarterly basis.
  • Any bad debt write-offs are approved by a board member.
  • A board member should meet with the management company on a periodic basis to discuss what controls are in place at the management company. The management company at a minimum will have one person performing the accounts receivable function, one person performing the accounts payable function and a separate person receiving the bank statements and performing the reconciliations.

If the HOA decides to manage the operations with the use of the board members, then there will need to be a more sophisticated system of processes and internal controls. It is important for the processes of the HOA to be documented so that the board members are aware of the responsibilities of each member.

There are four main areas to focus on when reviewing the procedures and controls; bank accounts, cash disbursements, revenue and the related receivables, and the financial statement reporting process. The board members need to segregate the duties of each member similar to that of a management company. There should be a separate person reconciling the bank statements, invoicing and collecting revenue, signing checks, and approving invoices. While the controls for this structure may vary depending on the size of the board, they should include at a minimum the following key controls:

  • One board member should prepare the bank reconciliation and another member should review it.
  • Document who your check signors are. Require two signatures when the amount is over a specified threshold.
  • Have a person who does not have check signing authority approve the invoices.
  • Approval of bad debt write-offs should be performed by someone other than the person in charge of collecting dues.
  • A budget should be prepared, reviewed and approved each year.
  • Financial statements should be prepared monthly and reviewed by the board on a periodic basis.

Having these key controls in place will provide the start of a foundation for the overall accounting system. If the organization is looking for additional assurance they may decide to have a review or audit performed on an annual basis by an independent CPA.

If you have any other questions regarding Internal Control Measures, don’t hesitate to Contact Us anytime.

Is your Self-Managed Community ready for a Management Company?

There are many reasons that a self-managed community might want to hire a management company. Do any of these sound familiar?

The Board is Tired

Since board members usually live on the property, they are often stopped while coming and going with homeowner questions they cannot avoid. With no buffer, the self-managed HOA board can feel like they are always on call. Board members also find it awkward to enforce the association rules and policies with neighbors with which they are otherwise friendly.

In other instances, a key individual has been graciously carrying the burden of handling the association’s business for some time. When they leave the board due to relocation, illness, or death, a huge gap is left behind.

Unsure About Legal and Compliance Issues

Board members are often unsure of how far their governing authority extends and what is permissible. This is even more challenging due to the constantly changing laws regarding closed meetings, document requests, and reporting standards.

Difficulty Complying with Budgeting and Financial Reporting Requirements

Even if the Treasurer is a CPA, the Board is often unsure about proper format for association financial statements, annual reporting requirements, the budget process and required deadlines. Enforcing collection of delinquencies with neighbors is also uncomfortable.

What Happens Once We Hire a Management Company

Once a Board is ready to burden the burden of doing it all themselves, several things happen. They often find surprising cost savings on services, due to the multiple resources available through a professional manager. In one recent instance, we saved an association over $5000 a year by immediately bidding out their insurance policies to get a more favorable rate. We have also found savings in utilities, and landscaping services, often negating much of the cost of management fees.

The challenge of recruiting board volunteers is simplified due to the reduced workload. When the officers no longer need to collect assessments, create monthly financial statements, prepare for meetings on their own, and address every request from homeowners, the workload is substantially lighter. They can often reduce the number of board meetings.

The Right Partner Can Make All The Difference

When homeowners get prompt answers to their questions, see professionally prepared financials, and observe consistent property maintenance, they develop confidence that the community is well-governed. This improves trust between the board and homeowners and results in a happier and better functioning community where people want to live.

Best of all, an increase in property values often follows, making the change a win for everyone.

Is your community ready to switch? Contact Us Today!