Some associations try to save money in their budget by opting out of working with a management company. While it’s commendable that these groups believe in their abilities to independently manage their own community, there are several issues that they are inadvertently at risk for without professional association management.
Here are some of the issues we’ve seen, and how our management team has been able to assist communities like yours.
Essential Insurance can Fly Under the Radar
Something as simple as overlooking insurance policies can be devastating to a self-managed HOA. In the past, we met with an Association that had been established for 40 years and was historically treated as a single-family home Association.
However, after reviewing their documents, we noticed that they were actually a townhome association. Apparently, the builder had started building duplexes and quadplexes but they weren’t selling, so he started building single-family homes to fill out the rest of the neighborhood but never updated the documents to reflect the difference in coverage.
This is concerning because the Association did not have any property insurance on the units they were supposed to be covering. If there had been a total loss incident, the Association and these owners would be out on their luck.
This community had been improperly insured for most of its existence and the Association had just now discovered this glaring problem with our help. Now they need to look at either having an attorney amend and clean up their governing documents, or, raise their dues substantially to accommodate their required coverages.
Had this issue been caught earlier, or, the Association worked with a professional management company from the start, not only could the neighborhood have been sufficiently protected, but their current homeowners wouldn’t be stuck paying higher dues.
Bookkeeping can Get Too Complex
With a professional management team on your side, the complex bookkeeping that comes with maintaining a community association is handled by them. With a professional management team, funds are deposited to the bank when they are received and recorded to the owner’s account at the same time. Individual management of Association finances can quickly get behind or out of hand without a tried and true system in place.
A management team can help control all of the necessary checks and balances involved with accurate bookkeeping.
You Could End Up Breaking the Law
Every organized Association is responsible for following and understanding Federal, state, and local laws in place for their community. Letting things fly under the radar, even unintentionally, could result in your HOA breaking the law.
We’ve seen this happen in communities we’ve teamed up with in the past and were easily able to get their Association’s back on track with current laws and help avoid issues like potential lawsuits.
Even if your Board understands complex issues like ensuring all vendors sign W-9 tax forms, things like creating new association rules on the fly could easily be overlooked and become a problem. Whether your legal compliance issue is large or small, an association management team can help ensure every law is followed to the T!
Keep Your Association on Track with Goodwin & Company
If you know that your HOA needs help with managing its affairs, don’t wait until you’re neck-deep in lawsuits. Goodwin & Company is a management team that has the resources your Association needs to effectively and legally operate. Get in touch with us today to learn more about our services.