The importance of knowledge retained by the association manager of an HOA history is key to long term success for both the association and its manager. Knowledge obtained by experience cannot be accomplished with good Record Retention alone. The best decisions must always be informed by the Association’s informal history, so the tenure of their management company and association manager is often an invisible asset.
A Bad Idea
This was driven home when I read a book purporting to inform HOA board members of how to be effective. The author, who had served on HOA boards for many years, had wisely chosen most of his topics, but his credibility took a fatal dive when he ineptly advised readers that :
“HOA’s should change Management Companies every three to four years.”
Immediately, the unnecessary waste related to such capricious actions flashed into my mind, but the next thought was just as alarming,
“How on earth could the constant churning of Management Companies replace critical knowledge obtained by a manager’s years of direct experience?”
Important Questions to Ponder
When just one board member leaves the Board some knowledge of important history inevitably leaves with them. Without the stability of a Manager who has been involved with the Association for some years, questions or policies already settled previously may be agonizingly reconsidered.
- Does the perimeter wall belong to the HOA or to individual homeowners?
- Should we spend several thousand dollars painting all the light poles, or does the power company do that?
- What creek maintenance belongs to the HOA, and which belongs to the city?
- Has this section of the governing documents been clarified by an attorney, or do we need to spend time and money doing that?
The list of such questions could be substantial, and so would be the costs in time, money, and frustration. There are certainly valid reasons to change management companies, but because they were virtually “stamped” with an arbitrary expiration date would be detrimental to the community.
A Real Life Example
An example of added efficiency based on solid historical information and experience took place at a mid-sized HOA one of our Association Managers has managed for over fifteen years. They could not sustain an onsite manager or hire a courtesy guard. It was also in an area where the neighborhood consisted largely of apartments. At that time, these surrounding properties were badly run and rapidly deteriorating.
These properties stopped opening their pools due to their high operating costs and the overly competitive rent rates in the area. The HOA’s pool was the only one the city had not allowed to permanently close, due to the Association’s governing documents. This means the pool was constantly subjected to trespassers from the neighborhood, so the HOA members could not even use their own pool. This went on for several years, with serious vandalism becoming routine.
The board and the homeowners had enough of this and tasked the Association Manager to find a permanent solution that fit their budget. Fortunately, the comprehensive financial and historical knowledge accumulated over many years of managing that HOA helped the manager determine a feasible solution that the homeowners could accept.
Over the years the management company had tracked special pool repairs separately from pool service or routine maintenance, so all the data from past years were quickly processed. This meant no other costs had to be separated out, and the evidence gathered was credible to the homeowners. Collating and interpreting information if that HOA had used three different managers during that time period would have slowed the process considerably, and changed “we know,” to “we approximate.”
A Simple Solution
After creating a simple spreadsheet for use at a special meeting, quotes were obtained to assure the community there were immediate and permanent savings involved. The presentation of the question was well received. A vote was taken and the decision to change the declaration and the legal plat was unanimously passed. This enabled the HOA to remove the pool completely and installing simple landscaping to create an more vandal-resistant courtyard.
One of the ways in which we managers are a valuable resource to our communities is that we serve as a living archive of history we have personally witnessed. Especially since the makeup of any board of directors is subject to many changes.
As such, long-term managers not only preserve history, they create continuity and consistency across many years for an HOA,