Many community associations hire a HOA manager to help with day-to-day operations. There is a big difference between hiring an independent manager and hiring a manager under a management company. Hiring an independent HOA manager has pros and cons, and it is not always the best option for all types of communities.
Can a Board Hire an HOA Manager Independently?
Homeowners associations contract with vendors and individuals constantly. These associations require the help of third parties to continue operating at an optimal level and providing essential services to residents. This applies to management as well.
Can an HOA hire an independent manager? The short answer is yes. Homeowners associations, through their boards, are generally allowed to contract with individuals rather than companies or firms. But it is important for HOA boards to review their governing documents to see if there are any restrictions.
An independent HOA manager is an individual who offers professional management services to HOAs and condominiums. They are independent because they don’t work under an HOA management company. These independent managers can work part-time, on a contract, or freelance basis.
Is This Still a Self-Managed HOA?
Self-managed associations are ones that don’t have an HOA management company. When you hire a HOA manager independently, would the community still be considered self-managed?
An independent manager is an individual whom the board hires directly. Unlike a management company, this independent manager works alone and not as part of a larger firm.
Independent managers typically don’t provide full-service support, such as legal coordination, accounting, and emergency services, because they don’t usually have the resources for it. They also operate under the direct supervision of the board and not through a corporate structure.
Because of this, the HOA is still considered self-managed in most cases, even if an independent manager is responsible for handling the day-to-day tasks. That said, it ultimately depends on how much authority the board gives to the individual.
The HOA remains self-managed if the independent manager acts only as a contracted assistant or administrative helper. Conversely, if the independent manager oversees most operations without the board’s involvement, then it begins to resemble professional management.
Pros and Cons When You Hire an Individual HOA Manager
The HOA board is responsible for making decisions, including when to employ professional help. When deciding whether or not to hire an HOA manager independently, the pros and cons must be considered.
Pros
- Lower Cost. Independent managers usually charge less expensive management fees than full-service firms.
Flexibility. It is easier to customize the terms and scope of work with an independent manager compared to a company.- Closer Relationships. Small communities may prefer a familiar face in the form of an independent manager rather than deal with a rotation of company representatives.
- Direct Control. When it hires an HOA manager independently, the HOA board retains more decision-making authority and control over operations.
Cons
- Limited Services. One person may not offer full or comprehensive services such as accounting, legal assistance, and maintenance support. In comparison, an HOA management company has the staff and resources for this type of service.
- Risk of Turnover. If the independent manager is absent or resigns, there is no one there to back them up or fill in for them. An HOA management company typically has backup plans and turnover protocols for such scenarios.
- Compliance Gaps. They may lack certifications or legal knowledge that companies usually require. Keep in mind that some states require HOA managers to carry a certification or license. Florida, for instance, requires community association managers to be licensed by the state’s Department of Business & Professional Regulation.
- No Institutional Support. An independent manager has no access to established systems, software, or vendor networks.
When is it Best to Hire a HOA Manager?
Given the pros and cons of hiring an independent manager, it is not always the best fit for all types of communities. With that in mind, when should an HOA hire an individual HOA manager?
In general, hiring an independent manager works better for small communities than for large ones. Small HOAs with fewer units tend to have much simpler needs and fewer amenities. Because of this, they don’t usually require the same type of support or resources that a full-service HOA management company can offer.
An HOA can also settle for an independent manager if its board members are very active, knowledgeable, and experienced. This way, the board members can make up for any gaps in the manager’s service. Of course, most communities aren’t fortunate enough to have an HOA board with a lot of free time and extensive expertise in HOA management.
Finally, if an HOA wishes to save money but still needs some help, it may be better off working with an independent manager. Keep in mind that cost savings shouldn’t be the only driving force behind this decision. Independent managers may be less expensive, but their services are not as comprehensive or robust as those of an HOA management company.
Why a Full-Service HOA Management Company is Still Best
Hiring an independent HOA manager comes with significant disadvantages. For this reason, it is still best to hire an HOA management company. These companies offer comprehensive support in several areas, including accounting, enforcement, maintenance, and legal compliance.
Additionally, HOA management companies already have built-in systems and safeguards that have proven to work time and again. They have a staff of capable and trained professionals, including certified and licensed community managers.
Furthermore, HOA management companies have better access to advanced technology (software and online portals). They also have a network of vetted contractors and vendors.
A main concern for most HOAs when hiring a management company is control. But, the HOA board can still retain decision-making power and control over the association’s finances even with a management company under its employ. The HOA management company does not gain a seat on the board nor do they assume absolute power over the community.
To Hire a HOA Manager or Not
When it comes down to it, an HOA management company has a lot more to offer than an independent manager. If cost is a problem, there are management companies that offer services at different price points. Smaller companies, while not as far-reaching and complex, also tend to be more affordable.
Elite Management Services offers comprehensive HOA management services to communities. Call us today at (855) 238-8488 or email us at help@emspm.com to get started!
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