There are so many HOA myths and misconceptions. It can be hard to determine what is truly legitimate and what is not. HOA board members must have a solid understanding of the association and its bylaws to make informed decisions, as well as to educate the community. This can be tough to do when certain misconceptions about association management aren’t corrected. So, understanding these seven common HOA misconceptions can be invaluable as an HOA board member.
What Are the Most Common HOA Misconceptions?
In this article, we will debunk seven of the most common misconceptions about HOA management.
1. Associations Only Exist to Make Money
While the collection of funds is an essential role of the HOA board, it is not its sole purpose. A homeowners association also exists to maintain the positive appearance of the community and the continual functioning of its establishments.
This means regularly maintaining common areas such as swimming pools and community centers. This also includes scheduling services such as trash pickup and recycling. HOA boards also enforce architectural standards — dictating what homeowners can or cannot change when it comes to the exterior of the property — based on the community’s governing documents.
Board members have a responsibility to uphold the functions of the association and allocate the budget for necessary expenses. Examples of appropriate expenditures could be updating the common areas, paying maintenance workers, holding annual board meetings, and hiring an association management company such as Elite Management Services.
The budget is made up of the funds collected from community members and is monitored by the HOA Treasurer. The fees associated with living within an HOA community are determined by the board members. If the board members are concerned about their ability to impose and collect funds, they could confidently outsource their accounting and collection duties to EMS.
2. Avoid Communities with High HOA Fees
HOA fees are usually one of the first things that potential homebuyers look at. If they see that the amount is too high, they immediately lose interest in your community. While HOA fees are indeed important to consider, it shouldn’t be the only consideration. As such, avoiding communities with HOA fees too high is one of our common HOA misconceptions.
A high monthly assessment fee might be justified because the community has plenty of amenities and services for its residents. For instance, if a community offers recycling collection services, homeowners will be able to save on gas because they no longer have to drive back and forth to the recycling center.
Likewise, if the community has a swimming pool and/or fitness center, homeowners no longer have to pay for waterpark entrance fees and gym membership fees. So, even if a homeowner is paying a higher HOA fee, they will be able to save on other costs.
It’s also important to consider the possible dangers of having a too low HOA fee. If the community only collects a minimal amount, is it enough to cover potential large-scale expenses or emergency costs? Replacing a roof that has been unexpectedly damaged by a storm will cost a lot. If the community has insufficient reserve funds, homeowners might have to pay even more in special assessment to cover these expenses.
When considering buying a property in an HOA community, it’s important to look at many factors — and not just the HOA fees. Make sure to read through the HOA CC&Rs and bylaws. You should look for sections that talk about HOA fees, caps for increases, and provisions for levying special assessments. Some communities may also provide access to important documents such as delinquency reports, reserve studies, and reserve funds.
3. HOA Affect Property Values
Another common misconception is that HOAs affect property values. Some people seem to think that as long as you live in an HOA community, you will be able to enjoy higher property values. This is a myth because while in some associations it might be true, it cannot be said for all HOA communities.
Amenities and services are what help drive property values up. A community is more appealing if it has a swimming pool, a fitness center, basketball courts, and so on. However, if you have an inefficient board that doesn’t take care of these amenities, a community’s property values can decrease significantly.
Your communal areas could look worn down and unappealing. Mismanaged funds may also mean that the association cannot pay to maintain or repair the amenities. So, while having an HOA could have a positive effect on your community’s property values, it’s not a guarantee.
4. Board Members Are Just Figure Heads
HOA board members are vital to the ongoing operation of an association. Many homeowners choose to live in an HOA community because of the amenities offered and the overall pleasant aesthetics. However, those things don’t happen organically. Board members are responsible for the implementation and maintenance of certain amenities, obeying the association bylaws, and creating an overall positive place to live.
Most HOA boards are made up of four essential roles: President, Vice-President, Treasurer, and Secretary – each with their own set of responsibilities. Community managers, while not technically a member of the board, are also integral to the association.
Board members are elected volunteers, meaning they are community members themselves and therefore, represent the entirety of the community. Should a board member not do a well enough job, a new one can be elected at the annual board election meeting. More importantly, if a board member feels as though certain aspects of the association are lagging or need expert help, they can utilize the services of EMS.
5. HOA Rules Can’t Be Amended
While some HOA rules have no need to be altered or removed, others may no longer serve a justifiable purpose. Board members have the power to review and, if warranted, change the association regulations outlined in the bylaws.
Property owners can request the amendment or abolition of a rule via a written request, followed by a board hearing. It’s important for HOA board members to hear what community members are saying and make any adjustments if it is within their power. Board members themselves should periodically review the bylaws of their association to identify any regulations or restrictions that need to be changed as well.
6. The HOA Board Can’t Do Anything About Missed Payments
As stated previously, an essential function of the HOA board is to ensure that all homeowner fees are paid. However, one of the common misconceptions of association management is that board members have no power to actually enforce the collection of those fees.
As a matter of fact, an HOA board has the power to foreclose on a home if the property owner misses their payment(s). While this seems a bit extreme, it shows that there are very real consequences to defaulting on payments. Alternatively, the HOA can also elect to hire a management company to handle violations, such as missed or late payments. Because the association requires funds to continue operating, it’s essential that all fees are collected punctually.
7. A Management Company Makes Board Members Obsolete
Hiring an outside management company such as EMS is something board members elect to do because they see a problem with their association. Whether it’s with accounting, property management, dealing with violations, or simply wanting to educate themselves, a management company can provide valuable assistance.
In that same regard, a management company by no means replaces the need for board members. They only provide the services requested by the board. The board members work in conjunction with the management company to improve the various aspects of the association and better the community.
Common HOA Misconceptions: 7 Myths Debunked
HOA communities have been around for a long time and they continue to be very popular among U.S. homeowners. Its ubiquity, though, has given rise to a lot of HOA myths and misconceptions. So, when people hear about HOAs, they immediately think of exorbitant fees or strict boards.
What’s important to remember is that each community is different. One community might have higher HOA fees but residents are happy because they have so many amenities. It’s also possible to have a strict board, but residents are thriving because of high property values.
As an HOA board member, it’s important to debunk these common HOA misconceptions so that you can develop a more realistic view of your community. Instead of referring to these myths, let your association’s facts, documents, and numbers do all the talking. This will help you govern your community more effectively and efficiently.
If you see the need for outside assistance, feel free to request a proposal from Elite Management Services today. You can also fill out our online contact form for inquiries or give us a call at (855) 238-8488.