Ways to Determine If Property Management is Needed for HOAs
Posted on Wed, Jun 03, 2009 @ 01:14 PM
Common interest real estate developments, such as condo associations and planned residential developments, often hire property management to handle the day-to-day operation of the development. The governing board of the homeowners' association (HOA)
generally selects the property manager. The property manager becomes
the HOA's agent. It has defined responsibilities, and it may be held
liable for its actions.
People who purchase units in a common interest residential
development are known as homeowners. All of the homeowners of a
development belong to the HOA for the development. So, if you buy a
home in a planned residential development, you become a homeowner and a
member of the HOA.
After the HOA has its first meeting and elects its first HOA board, operational control is transferred from the developer to the
board. One of the first decisions that the new HOA board must make is
whether or not to hire an independent property management service to
handle the operation of the development.
Employing a professional property management company is a good way to of
insuring the HOA's continued positive growth and the viability of the
development. Whether or not the HOA's board of directors should employ
some kind of property management company depends on several factors, including:
- Size of the development
- Cost to each housing unit for management services
- Experience of the members of the HOA in managing the day-to-day affairs of the HOA
For larger developments (200 or more units), a business-like
operation capable of handling a management situation of considerable
scope is required. For medium-sized developments (75-200 units), an
on-site, nonresident presence during normal business hours, with the
governing body handling other responsibilities, is probably the most
cost-efficient arrangement. Smaller developments may run smoothly with
the HOA having direct responsibility for property management.
Once the decision to hire a property management company has been made, the
condo board should evaluate several firms and decide which one is most
suitable. Once the condo board has agreed on which property management firm to hire,
the board usually has to obtain the consent of the majority of
homeowners in order to enter into a written contract that lasts for
more than one year.
Learn how to find a Property Manager