Pros and Cons of Self-Management vs Professional Management Company

When homeowner Associations are formed, there’s one of two choices to consider:

1) The Association will operate from an “in-house” perspective where the Owners/Members, through a Board of Directors, will volunteer their time to oversee the maintenance and enforcement of rules in the community. However, since Members of the Board of Directors usually have other jobs, it may then become necessary to hire an Association manager, as an employee of the Association, who will keep the Board informed of the day-to-day operations of the community. These managers will also present suggestions to guide the Board in making changes and/or improvements that they deem necessary as they observe, monitor, and manage the community.

OR

2) The Association Members may decide to enter into a contract with a professional management company when they find that the day-to-day operations are too overwhelming, especially if they’re unable to focus on running the Association while taking care of their own personal responsibilities. The Association may use them for most or all services, ranging from administrative and Board services to financial and maintenance management.

Florida HOA laws prohibit Associations from operating under a for-profit status because the only purpose of the Association entity is to manage the needs of the community. This could include creating massive financial reserves that can be used solely at the Board’s discretion. The questionable practices of some Associations can force Owners to seek the aid of Florida condominium attorneys or FL condominium lawyers to help them confront and resolve the compromising situations they may face.

Although the Florida condominium law bans a for-profit status in Associations, it becomes difficult to enforce this law with Associations that use management companies who function as agents for the Association. Ferrer Law Group, located in Weston, FL, provides legal representation in HOA and Condo law for property owners as well as individual consumers and other business entities, competently delivering satisfying solutions for all those they represent.

There are pros and cons when deciding how Associations will be governed.

I. Self-Management Associations

Pros

• The Association expenses will be lower, without having to pay the professional management company management fees and expenses.
• HOA’s retain all their financial resources.

Cons

• If it’s a sizeable community or more than one community, the Board volunteers may not possess the adequate expertise, experience, and skills to supervise its community. Therefore, a management company may be needed to assist in overseeing the Association successfully.
• If a management company is hired, depending on the extent of their responsibilities, it could result in a substantial fee for HOAs.

II. Professional Management Company

Pros

• The HOA can hire a management company for usually at least 1 year and learn the best management practices from a team of skilled experts.
• Acquire access to other professionals such as attorneys and financial experts who are knowledgeable about HOA and Condo laws and management.
• Support is available when conflicts and other problems arise.

Cons

• The Association will need to pay the management company fees and expenses that can become a burden for the Association.

Under the Florida HOA and Condo law, owners, sellers, and buyers can expect to find themselves inundated with Association conditions, restrictions, rules, and by-laws. To find top-rated condominium attorneys in Florida, go to Browse Florida Condominium Attorneys & Law Firms | Lawyers.com. Keep in mind that while it may be possible to self-manage Associations within small communities, Associations should always weigh the needs of the Community with what its Members are capable of efficiently providing. If the Association finds it requires additional help from a third-party source, it should consider reaching out for partial or full services from a management company.