HOA: Fact or Fiction

Many people deal, or have dealt, with an HOA Board in some way before, whether as a renter or a homeowner.   Realtytimes.com recently published an article by Richard Thompson, a nationally recognized expert on HOA management issues, addressing some commonly held beliefs about your HOA and how it should be working for you.

1. Homeowners dues and fees should be low.  

While it may seem more financially attractive to pay a lower monthly amount, cutting corners to save money now can end up costing you much more later.  Thompson says: “The board is elected to maintain the HOA assets properly. There is a big difference between being a good steward and a tightwad. Tightwads skip routine and necessary maintenance services which erode the value of the homes. It takes money to do it right and the board should spend the money necessary to accomplish the tasks.”

2. Since HOA Boards are volunteer operated, they aren’t held to the same standards as professional managers. 

Whether they are volunteers or professionals, the job is still the same.  HOA business should be conducted in an informed and professional manner by the board.  According to Thompson,  “This means taking care of things in a timely manner, planning ahead to anticipate problems, getting and acting on good advice.”

3. The HOA is small and so are the needs.

Keep in mind that the smaller the HOA is, the more costs and fees per owner increase.  For smaller associations, this means more careful planning and organizing by the HOA board.

4. The HOA is too small for professional management.

For the sake of a happy and peaceful neighborhood, for some things its better to let a professional take over: “In areas like financial management and rules enforcement, all homeowner associations should have outside professionals. Collecting money from neighbors and controlling their antisocial behavior is bound to cause problems for a volunteer doing it. It’s even worse when you live next to the offender. There are management professionals that do these tasks 24/7 and are paid for it.”

5. The board is elected to be the manager.

The HOA board is elected to: “Hire and supervise competent service providers.”  When organized, the job should demand no more than a few hours a month from its HOA board.

6. The board is entrusted with the most valuable asset most people own.

For many people this holds true.  As our HOA expert points out: “The responsibilities of an HOA board are not unlike those of any Fortune 500 company board. In both cases, there are physical and human assets entrusted to the board. Careful planning and effective communication to the stockholders (owners) is needed.”

You can find more info about HOA and HOA laws in California  here, or email us at debraandpat@bermankandel.com with any questions.

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