Category: Property Management Georgia

Financial Risks of Choosing an Unproven Management Firm

Consider the financial risks of hiring unproven association management firm

With the recent changes in the U.S. housing market and the rise of online real estate platforms, many less experienced real estate agents and brokers have shifted their business from real estate sales to condominium and homeowners association management. While some smaller, unproven management firms may have a great sales pitch, there are potential risks associated with smaller, less experienced, and less financially secure management firms that could have a major impact on your community association, such as:

Impartial Manager Fiduciary: A small management company will have fewer HOA managers, and they may be overly reliant on one or two managers, who may also be principal owner(s) of the management firm. It is important for the community manager and firm to have an independent relationship for the continuity, transparency, and efficiency of the HOA operations. It can also take time and resources for less experienced managers to learn the specifics of the HOA and establish a reputation and rapport with the board and the homeowners. Does the smaller firm have the experience, financial backing, employee recruiting opportunities, and insurance coverage to survive and guide your association through any financial or disaster situation? If the smaller firm had a financial setback, would your association be impacted? It is important to understand the financial risk you are taking as a board member of your association.

Lack of Communication: An unproven management company may not have enough staff or advanced systems to respond to the HOA’s queries or concerns in a timely manner. This can lead to frustration, misunderstanding, legal issues, and mistrust between the HOA and the management company.

Low-Quality Vendor Services: A less experienced management company will not have a rigorous vendor selection process or a wide network of reliable and reputable insured and licensed vendors. This can result in low-quality or overpriced services for the HOA and a lack of independent financial oversight of the relationship between the management company and the vendor. The ethical issues can also carry over to the Board of Directors and affect the long-term maintenance and financial strength of the community and insurance coverage. All three items can have a detrimental impact on the resale value of homes within the association.

Inadequate Accounting and Reporting: A small management company may not have the expertise or the technology to handle the HOA’s accounting, reporting, and Human Resource needs. This can result in errors, discrepancies, or delays in the HOA’s financial statements, which can affect the transparency and accuracy of the HOA’s financial health.

Risk of Income Loss: A smaller management company may not have the skills or the tools to manage the HOA’s cash flow, collections, and reserve funds. This can result in a decrease in revenues or an increase in expenses, which can affect the HOA’s ability to fund its operations and capital projects.

Risk of Fraud, Theft, or Embezzlement: Last but certainly not least, a smaller, less experienced management company will likely not have the proper safeguards or controls to prevent or detect fraud, theft, or embezzlement of the HOA’s funds, including from online cyber security threats. This can result in a significant loss of money or assets, which can damage the HOA’s reputation and financial stability. We have helped many associations over our history that have had funds stolen from smaller management companies leaving the community in financial shambles. CMA has the experience and resources to help any association recover, but it can take years to fill the hole which will impact the resale values and insurability of the association.

These are just a few of the possible financial risks of an HOA going with an unproven management company. However, not all management companies are the same, and some may provide excellent service and meet the needs of your community. It is important for the board to do its due diligence and research before hiring any management company, regardless of its size. The board should also monitor and evaluate the performance of the management company and its insurance coverage and licensing regularly, and communicate any issues or concerns as soon as possible to reduce the financial impact on the association.

CMA has the expertise and resources to help guide your association through any crisis or loss. As the largest community association property management company in Atlanta, Alpharetta, Augusta, Dunwoody, Peachtree City, Roswell, Birmingham, Fairhope, Nashville, Destin, Santa Rosa Beach, and Naples, we are here to help your community thrive.

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Boosting Neighbor Participation in HOA/Condo Meetings

Boosting Neighbor Participation in HOA/Condo Meetings

Homeowner engagement is one of the main pillars of a strong community. Existing and new homeowners need to be involved in the community and participate in HOA meetings often. HOA meetings are an essential part of community association management, as they allow the board of directors and homeowners to communicate, make decisions, and resolve issues that affect the community for years to come. Participation in HOA meetings is important for both the board and the homeowners, as it ensures that the community’s needs and interests are represented and addressed timely.

Participation in HOA community meetings is encouraged and sometimes required by the governing documents. Board members and homeowners have the right and the responsibility to attend, speak, ask questions, and vote at the meetings, as appropriate. Participation should be respectful, constructive, and relevant to the agenda items. Virtual participation can help increase engagement due to everyone’s personal responsibilities. With virtual participation owners are give the option of attending and participating in HOA meetings remotely, using technology such as phone, video, or online platforms. Virtual participation may be allowed or required by the governing documents, the state law, or the board’s discretion, depending on the circumstances. Virtual participation should follow the same rules and etiquette as in-person participation, and should ensure that the meeting is accessible, secure, and transparent.

As more homeowners begin to participate in HOA meetings, you will be able to collect feedback and create a well-managed community. If you are looking to boost attendance at your HOA/condo meetings, you can use the following tips.

Welcome the new homeowners

Many homeowners like to be formally welcomed into the neighborhood. It helps them recognize the role of the HOA in the community. You can send a welcome package curated by the HOA, so the new homeowners feel welcomed. Make sure to include items that feel personal to your community. Setting up a Welcoming Committee is essential to program consistency.

Host social events

Neighbors need to meet each other and establish camaraderie to create a thriving community. HOA meetings will see higher attendance when the neighbors feel as if they are doing something together for the community. Organize a few social events throughout the year so that homeowners in the neighborhood get a chance to get acquainted.

Widen the scope for participation

The prospect of simply attending meetings might not be appealing to many. You will benefit from providing them with an incentive to attend the meeting. Consider the broader interests of the community and how the residents can actively participate in decision-making. Creating volunteer committees will provide homeowners an avenue to engage with the community further. Committees allow everyone to share the responsibilities and have regular interaction. 

Depending on the activities and interests of the board, you can start a Neighborhood Welcome Committee, a Landscape and Beautification Committee, a Homeowner Education Committee, a Finance & Budget Committee among others. This will help to foster a sense of community and responsibility which will increase participation in HOA meetings since everyone will want to stay updated in regards to their committee.

Regular communication

The HOA has to maintain regular communication with each of the homeowners to keep them engaged. Social media and emails have made it so much easier to broadcast information and keep everyone in the loop. You can issue a notice about the next HOA meeting and include the time and date so that more people are aware of it. Keep improving your communication methods. Working with a community manager at the leading professional community association management company in the southeast can alleviate the administrative burden on board and committee members. Make use of the advanced technology and web portal solutions that Community Management Associates has to offer every client. 

Be punctual and respect everyone’s time

A board meeting should begin and end at the specified time. Homeowners like to know how much time they will be spending at the board meeting so they can arrange their schedule accordingly. Shorter and crisper board meetings will see higher attendance. If you develop a reputation for disrespecting everyone’s time, then homeowners will be less likely to get involved in the proceedings.

Reward engagement

Once the attendance of your HOA meeting goes up, you have to maintain the efforts. Show appreciation for the attendees so they continue to show up.

Boosting neighbor participation in HOA meetings will lead to new ideas and transparent community improvements. CMA can offer our decades of experience and resources to help encourage participation for a stronger HOA or condominium community.

In summary, community association management participation in HOA meetings is a vital aspect of maintaining a healthy, harmonious, and successful community. By following the rules and guidelines for HOA meetings, board members and homeowners can ensure that the meetings are productive, transparent, efficient, fair, and that the community’s best interests are served. For more information on improving community association management participation in HOA and condominium meetings, please contact Community Management Associates. CMA offers decades of experience as the premier association management company in Atlanta, Alpharetta, Dunwoody, Norcross, Peachtree City, Augusta, Birmingham, Fairhope, Nashville, Destin, Naples, and Santa Rosa Beach.

See how Community Management Associates can help your community increase owner participation for your community association. Request your customized community association quote today.

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