Mistakes HOA Boards Make On Community Association Management


74.5% of homes sold in 2018 were part of HOA communities. It is no wonder that 73.9 million American households live in HOAs, condominiums communities, or cooperatives that often have a community association management board to govern them.

Election of board members may see volunteers with minimal expertise or experience in real estate taking over as HOA heads. As such, the new HOA board members often commit costly mistakes that affect all homeowners within the community. Here are five costly mistakes to watch out for in community association management.

1. Failing to Read Governing Documents

Your HOA board may have two major roles, maintain the common areas and amenities in the community as well as enforce the covenants and the rules of the HOA. Failing to read the rules and regulations governing your particular HOA may set you up in conflict with community association management companies, vendors, and homeowners. You may need to read the federal statutes, state laws, declaration of covenants, conditions, and restrictions, by-laws, and rules set up by the HOA board.

2. Changing Vendors Hastily

A common error seen after a new board comes in is the firing of the community management company that helped the previous board. Often, the replacement is in favor of a known relative or acquittance that creates a conflict of interest. Before jumping the gun and firing all vendors, including landscapers and community association management, take time to evaluate their performance. Arrange a meeting and understand the directions they received from the previous board.

3. Losing Control of the Finances

The board decides on the expenses that come with the community association management. Additionally, they may be responsible for the collection of the HOA fees. It is not uncommon for a new board to turn a blind eye to collecting fees and ensuring every member pays on time. They may also set unrealistically low budgets hoping to endear themselves to the members. Losing focus on the incomes and expenditure may result in budgetary issues down the road.

4. Failing to Consult Experts Early Enough

HOA boards may act first before seeking advice from property management companies or HOA attorneys. It often results in legal tussles with vendors and members that drain the HOA finances through legal costs. It is critical to consult the HOA’s lawyer when dealing with a difficult homeowner. The attorney may also help them stay updated on changed statutes and legal requirements. Consulting a CPA can help the board balance their books and file their tax return.

5. Becoming Overzealous

You may kickstart your membership in the board with enthusiasm, suggesting changes to policies that you deem unfavorable. Altering your policies and governing documents right after you join the board can result in legal issues, with most boards overstepping their mandate. You may need to take time and understand the background of why a policy is before deciding to alter it.

Community association management through your HOA board appointment may be a huge responsibility. It is important to learn when to consult your property manager, lawyers, and other professionals on matters that you may have little knowledge about. If you wish to hire a homeowner association management services, reach out to Pioneer Real Estate Services.