If you’ve been on the internet for any amount of time, you probably know the reputation that Home Owner Associations or HOAs have HOA Boards. You can find posts on Reddit by frustrated owners about how HOAs have made life extremely frustrating. That said, how common are HOAs in reality?
Well, according to 2024 data from the National Association of Home Builders, 68.8% of all new single-family homes in 2023 were constructed within an HOA. That said, only 39% of homeowners felt like the presence of an HOA was a factor in their home purchase.
As a manager or an important board member of an association, you have to stop and ask a serious question. “How do you even salvage the reputation of HOAs?” The most obvious approach would be fixing common mistakes that cause resentment in the first place. Let’s explore three examples in this regard.
1. Governing Like You Are Democratically Elected
Home buyers rarely have a choice when it comes to entering an HOA. They could have shortlisted a few different homes, with and without HOAs. However, the one that suited their budget and requirements might be the one with a mandatory HOA membership.
Despite this reality, many boards operate as if they were elected by the community. They start believing that their rules have default support, even if no one wanted those rules in the first place. If a member violates them, suddenly, it starts to feel like they’re a criminal, with formal notices being doled out instead of conversations.
This is why it’s so important that HOA managers put aside the rule book for a moment. Sure, you have the power to penalize a homeowner for violating rules, but that’s not always the best approach. Instead, don’t assume that all rules have implicit support HOA Boards. Reach out, have conversations in advance, and point out why it actually helps the community in ways they care about.
#2. Reacting to Regulation When You Should Be Preparing for It
Unchecked HOA board behavior is what has caused the current climate, especially in some states. Take a look at House Bill 657, which aims to reform HOAs power in Florida. If passed, it could give homeowners the ability to dissolve HOAs with enough votes. As one Tampa-based realtor notes, it sends a message to bad-acting HOAs, yet it doesn’t provide a structure if HOAs are eliminated.
Meanwhile, many board members are still busy getting angry at the 68-year-old resident who takes her walk outside the allowed walking hours. Smart boards are already reaching out to Florida community association management firms and trying to secure the well-being of the community.
As Folio Association Management explains, these are services that focus on compliance and governance support, something many HOAs in Florida will soon need. In addition, they also focus on improving relationships between all parties and act as a fair intermediary when needed.
Even if you’re an HOA manager or board member in another state, you should probably look into the legal scene. If there are even thoughts HOA Boards about bills that might be floated, you want to know about them and prepare in advance.
#3. Treating Reserve Funding Like It’s a Future Problem
On a somewhat different yet critical track, financial competency is another area where many HOAs bungle up. Let’s face it, not all treasurers and managers are actually qualified and knowledgeable when they take up these roles. Some are known to outright scam residents.
As a result, fund mismanagement is an issue that tends to pop up from time to time. Yet, the majority of issues come from poor budgeting and collection.
According to data from the Foundation for Community Association Research, 21% of community managers said that a lack of reserve funds was a problem. Likewise, increased requirements for the collection of unpaid assessments were reported as a serious concern by 10% of managers.
The fact is that funding is always a messy topic, especially when it’s coming from a community that you might have antagonized earlier. This is yet another situation where a management/intermediary firm can help if fund collection has become a problem for the HOA.
Reserve funds are extremely important because they’re the only way to deal with emergencies. If you’re not able to cover them, then homeowners are extremely justified in questioning the existence of HOAs. Thus, if there’s one area you don’t want any problems, it’s in terms of reserve funds.
All things considered, being in a position of power in an HOA isn’t always an envious position. You’re probably not making six figures doing this, but you still have to contend with many community voices, some much louder than others. If the HOA or HOA Boards is only looking after a handful of homes, yes, it’s relatively manageable.
However, when you’re talking about larger communities with hundreds of homes, you need all the help you can get. This help can come in the form of third-party services, but it can also come in the form of cutting down on common management mistakes.
Go further with bold ideas built to accelerate growth at Management Works Media.
