Small Condo Buildings - Do you pay an HOA Manager or do it yourself?
December 16, 2015 12:52 PM   Subscribe

Anything we should know as my 4 unit California condo building decides whether or not to stop using our HOA manager and go the DIY route? Particulars below.

I own a unit in a 4 unit California condo building. We pay an "HOA Manager" (third party) $125 a month to do basic management - collect HOA fees, arrange insurance, receive bills and coordinate payment, keep books, send financial reports to the owners, arrange repairs as needed, interface with accountant for tax return. Our total HOA fees (for all four of us combined) are only $1300/mo, so the management fee is a significant portion of our budget. The guy does not do a spectacular job, and we think we could do all this stuff ourselves easily.

Recently my friend, whose building also has 4 units, told me that they don't pay a manager, and that in fact she didn't know of a single small building that didn't take care of these functions themselves.

So, small condo building owners - are you doing it yourselves? Any advice as we make the decision of whether to do it ourselves or not?
posted by bluesky78987 to Work & Money (5 answers total) 1 user marked this as a favorite
My three unit condo association does it ourselves, and it's not that much work - even the taxes are easy. The things that can get annoying:

- making sure everyone has their fees on direct deposit. I do the budget/banking these days, and it's annoying to figure out who's paid and who hasn't.
- divvying up tasks. You don't have snow shoveling, but trash and maintenance and grounds do take effort.

Mostly, though, this is only even at all annoying because I'm now the only owner who is also a resident, so I end up doing most of the tasks. One way this is made better is that one of the other units is great about asking their renters to chip in on things like yard and common-area tasks. So have a plan for renters!
posted by ldthomps at 12:58 PM on December 16, 2015 [1 favorite]

I live in a TIC (just two units, two small houses on one lot) but it's the same scenario. Some people in TICs hire a third party to develop an agreement, manage tax and insurance bills, etc. But that sounds absolutely nuts to me. I mean, a bill shows up, we talk to our TIC partner, we write checks, we mail checks. When one TIC partner needs to start construction or maintenance work that will impact the other, our agreement says we'll discuss it before any work begins. That's about it.

Save yourself $125/month!
posted by late afternoon dreaming hotel at 1:14 PM on December 16, 2015

The problem is that there are significant risks to getting things wrong. For example, if one of your residents stops paying condo dues and also the mortgage, a specific set of things has to happen for the association to get its money before the bank does. If you get it wrong, you lose priority and only get paid after the foreclosure sale makes other lienholders whole.

Or say you want to be a reasonable person and ignore a minor violation of the covenants. That's kind of you and your neighbors. Too bad you have now lost the right to enforce the covenant against any current or future owner without a bunch of work to reaffirm and renotice the rule, and until that happens, a new resident can get its nose in the tent, so to speak, leaving you powerless over a major rule violation. All you can do in that case is grandfather everyone currently breaking the rule and limit its application to new owners or existing owners who cured their breach at some point.

So yes, you can do it yourself, but you definitely need to become very familiar with your state's laws, rules, and regulations that cover condo associations and keep those in mind at all times. You also need to keep in mind that in most states there are subtle but very important differences between condo associations and HOAs, despite how similar they may seem. This limits your ability to look for advice on the intertubes. At the least, it would be wise to have a lawyer on retainer for the inevitable questions that come up.

A good management company will help you get where you want to go in a way that doesn't cause further problems down the road. If your existing management company is not meeting your expectations, do kick them to the curb.
posted by wierdo at 1:36 PM on December 16, 2015 [2 favorites]

I've spent the past decade in two condo associations a little bit larger than yours (<10 units), one with a management company and one without. I think it depends on whether you have a responsible treasurer and a good "den mother" type who will step up and do maintenance tasks like replace light bulbs, schedule the annual termite inspection and A/C filter changes, etc etc etc. Personally I am pushing right now to move to a management company because nobody has the time/inclination to do these things anymore and it's getting to be a problem, though I'm facing quite a bit of resistance.
posted by karbonokapi at 3:55 PM on December 16, 2015

Thanks all. So it sounds like this is probably doable, but will necessitate a bit of extra bandwidth, learning and attention-paying.

We already have the gardening and trash duties taken care of, and our current manager doesn't do anything about checking for burned out lightbulbs etc anyway, so we wouldn't be losing anything there. I appreciate what wierdo says about legal issues though - we'll have to decide if we want to take on the task of learning this stuff. We can definitely handle it, it just comes down to whether or not we want to.
posted by bluesky78987 at 12:57 PM on December 17, 2015

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