- February 16, 2019
- Posted by: Scott Setterlund
- Category: Business plans, communities, Community, Economics, Finance & accounting, HOA
You bought a house in a planned development that requires you to pay a membership fee. Initially, you understood that all the neighbors share the amenities like common walking paths or perhaps a pool; and that the fees would offset the balance. Those amenities seemed very attractive and grabbed your attention as an upgrade to the value of your property. They were a way for your family to enjoy the added benefits without having to personally maintain them.
Obviously, you don’t own those amenities. The truth is, everyone in your community owns a share in those amenities.
Here’s where living in a common interest development can become very contentious. Someone needs to constantly monitor those activities that keep your amenities in good shape. Therefore, the burden of care and management falls upon your Board; is your Board doing its job?
Question Your Board
Your association’s Board members are homeowners, just like you, who volunteer their time to make and follow through on the decisions to keep your community running. It’s an unpaid position with little to no incentive. They are elected onto the Board by a majority vote. Your Board makes financial decisions, based on the needs of those amenities. However, some Board members get elected for personal reasons and lack the necessary skills to objectively represent your interests or to manage those shared amenities. In fact, your neighbor could be a Board member and have an agenda against you or visa versa. This under-mining diminishes a neighborhood from thriving and creates disenchantment amongst residences. Disagreements have become litigious, forcing members to pay fines, move out of the community or even foreclosure.
Hiring a Professional Association Manager
A management company should be one that specializes in common interest developments; not property management. An association manager should provide an independent, impartial service designed to alleviate the operational activities of your association’s Board members, but still allow the Board to make decisions. That is, a management company should take direction from your Board and operate within the boundaries of your association’s governing documents. No management company should ever be making independent decisions on your community’s behalf; nor should they hide or guard the financial records or any operational activity from a member of your association.
A third-party representative should act as an unbiased, facilitator. They should help your Board and your neighbors interpret CC&Rs, update and amend the bylaws if necessary, collect dues, manage your association’s financial records, and oversee administrative and governing protocols.
Associations run by a controlling management company or a Board that does not represent the majority interests of its homeowners will lose objectivity, and lack the resources for change. This type of leadership will place the association in uncomfortable situations and confrontations with neighbors. Ultimately, poor management adversely affects property values.
One example of a professional association manager is MGM Association Management. MGM is an active and participating member of the Community Association Institute (CAI) who provides continual education and operating oversight. MGM is headquartered in Meridian, Idaho and has a second location that serves Eastern Idaho in Idaho Falls.
MGM has been providing assistance and support to over 11,000 homes and over 100 HOAs throughout the State of Idaho. For the past two decades, MGM’s mission has been to help communities navigate the facilitation and governance of common interest developments. Their goal is to alleviate the burden of administration imposed on a volunteer board, so that the Board can focus on more relevant matters.
If you are interested in learning more about association management services contact MGM at (208) 846-9189 or visit www.gomgm.com.