20 years history of HOA interactions

As a former Property Manager for my small real estate company, I have had to work with many HOAs and associations. Early on I realized there was a learning curve to my understanding of their different operations, forms of communication, support or a lack of support, and responsiveness. The more I became involved, the more I began to discern cooperative verses non-cooperative companies. I have tried to maintain a balanced perspective but over the last 3-5 years, this has become more difficult. Let me explain what I mean....

As property management companies have grown, they have become more and more digital thereby taking the 'person' out of the loop. This increases the ineffectiveness of the company as each owner or individual property manager attempts to solve an issue for their landlords or tenants. Lack of communication on the part of the individual real estate property manager can be interpreted as non-professional and subject to sanctions by the Real Estate Commission if the practice continues. This is not the case with Property Management companies; Different standards - one is licensed and one is not (business license only). It is not the strict interpretation of the myriad of documents (Articles of Incorporations, Covenants, Rules and Regulations, Business Meeting minutes, Declarations, By-laws, Financials, Budgets and disclosure of any existing pending legal actions) as much as it is the lack of explanation and communication that begins the complaint process. I had to threaten a company with a law-suit just to get them to communicate with me, simply because I was not the owner, but the property manager. Tenants as well have very little recourse when talking with the property manager. The apparent lack of desire (or ability) to solve a problem or issue fuels further contempt by consumers.

Fees - This is an area that has spiraled out of reason. Fees for HOA documents that are placed on the Internet (digital) and provided by 3rd party companies is a 'cash-cow' for HOA companies. Status Letters required by Title companies (and For Sale By Owners) and Record Change Fees are purely administrative but have no constraints on how much can be charged. To pay $150 or more for HOA documents (which, by statute must be made available (Senate Bill 100) and are digitally available is pure profit to the HOA. Likewise, charging $100 for a Status letter and $350 for a Record Change Fee shows that without legislative oversight, the consumer (Purchaser or Seller) are the ones being forced to comply and pay these fees without recourse. Advance HOA specifically has confirmed the figures I quote above. This does not include the 2 x months of working capital required. Total out of pocket for a purchaser in this particular case (townhome) would be $150 + $350 + $398 + $199 (first months HOA) or $1,097. I do not assume to be knowledgeable of the various business models currently in effect for each of the management companies, their overhead, labor costs, etc., however I do know that without legislative intervention, these companies will continue to claim that increases in labor costs, salaries, consumer goods, etc., demand higher costs. Often this is simply not the case.

Becoming involved - When I became part of an HOA board in my local community, it became much easier to understand how and why certain decisions are made. I was able to bring the consumers concerns to the table and therefore became part of the solution rather than a faceless complainer.

Current HOA - Today I live in a professionally managed community. The HOA fees are reasonable (in my opinion) for the level of maintenance and the amenities offered. When I have contacted the sub-division representative, I was polite, professional, clearly described my request or concern and waited for a response. On three occassions I received a response within 24 hours. Even when I did not submit the documentation for my request to the proper committees, I was told what i needed to do and where to forward the requests. Patience on my part PLUS clear communication on the part of the HOA representative went a long way to receiving the approvals I was looking for. Likewise, the HOA Board communicates often with its residents through its various committees. The communications are two-way and that helps tremendously.

Summary - Although I do not believe in legislative oversight as a first course of action, it is apparent that there are more companies relying on these fees to offset overhead than companies that do not. I do not believe that administrative costs for Status Letters an Record Change fees are anywhere equal to the amounts charged. The transfer of real property is the catalyst that energizes at least 8-14 different companies or individuals within the scope of the transaction. HOA companies are only one part of this purchase cycle but have a direct impact on the ability to affect initial value and overall costs to acquire housing. I do not challenge the right of a professional property management company (HOA) to conduct their business but there needs to be some recourse for the consumer in these areas (fees, communication, response, and results).