Need help? Call (877) 780-4510

HOA Management Fees

Reggie Brown
HOA management fees

Homeowners associations commonly hire property management companies to see to the implementation of their policies and day-to-day management of community assets.

How much rental managers charge the HOA will vary depending on the size of the community and the extent of their responsibilities in it. Some firms offer different combinations of services or may allow HOAs to select from the list of their offerings to determine what functions the rental managers will perform. The choices made may depend on how active the HOA and community are, the size of the community and the degree of knowledge and experience the HOA members have.

Because HOA boards are typically volunteers with little or no experience in property management, who serve in their spare time between other responsibilities, having a professional to handle most responsibilities is a common arrangement. The HOA may then determine policies and rules and oversee the rental managers. Alternatively, a particularly small HOA with few duties may only want bookkeeping services. One advantage for both parties is that these less-involved offerings allow both sides to build a relationship so that if further needs develop later, the HOA has someone to turn to. Professional management services may work on a "per door" cost basis that charges fees determined by the number of homeowners in the HOA, particularly when being hired for full services. In some cases the fee may be no more than $20 per owner, potentially less. Larger communities may be charged lower per door rates because of the way administrative efforts scale. The fees that property managers can charge for particular activities may be regulated to some extent by state laws, so HOAs may be able to look up the limits.

While most payment is monthly and stable to cover standard management responsibilities, some activities may result in additional fees. Engaging in collections activity targeting a resident, attending extra meetings of the HOA board and preparing documents may be reasons for additional charges. Any additional fees should be clearly stated in the contract, so HOAs must be certain that they understand what they are agreeing to.

Services Provided by HOA Managers

Providing accounting and financial advising services is a common service many HOAs use. This may be simple bookkeeping or extend to suggesting how much to budget for future costs, when repairs and maintenance to common properties are likely to be necessary and how to find a good contractor. As part of advising the board, managers may report on the HOA's financial status, maintenance needs and progress regularly at meetings.

Managers often oversee collections actions, which can be helpful partly because they are professionals and partly because they do not live in the community. Similarly, they may be responsible for rule enforcement activities, such as towing an inappropriately parked vehicle or confiscating an item improperly left on common property.

Another responsibility management firms may deal with is insurance matters. Dealing with such claims, because it is not a regularly needed activity, is commonly among the extra fees assessed separately from the flat monthly charge for routine services to an HOA. Additionally, managers may carry out activities such as creating a newsletter or similar document for community residents on behalf of the HOA, if the board wants one. This is likely to mean printing and related costs.

If any work is to be done on the property, management companies may oversee it as a general contractor, likely charging for that service separately as well. Essentially, costs are divided into the routine and the less predictable, and HOA boards should assess what the community is likely to need as they choose a property management company.

Return to Resources Home

March 5, 2014