6 Association Management Mistakes HOA Management Helps Avoid
Association management is a massive responsibility that each board member takes on when they accept their position as a community leader. However, no matter how well-meaning a person is on the board, it’s possible for management mistakes to be made; some of which could have massive legal consequences.
An HOA management team serves as an excellent buffer between new board leadership and some of the common mistakes they can fall into.
Here are six examples of management mistakes and how an association’s hired HOA management team can prevent them.
1. Vendor Hopping
Your vendors provide essential services to your community. From plumbing to landscaping and general maintenance, they keep your association beautiful and functional.
As a new board member, one may be tempted to change things up with new vendors. This can be a move that devastates the progress of your community. Change isn’t always good, and you could end up hiring new vendors that look great on paper but are sub-par when work needs to get done.
Unless you know your vendors are slacking on the job or plan on drastic price hikes, keeping the status quo in this area of your community is great for everyone involved.
2. Spending Too Little on Insurance
Associations and expensive claims seem to go hand-in-hand. Great insurance can help lighten the financial load when an issue arises in your community.
Cheap policies and providers may save you money now but won’t have the resources you need when an emergency strikes.
Your association management team can help you and your other board members review where your association’s risk lies and whether your current insurance policy is strong enough to see you through a costly claim.
3. Overreporting Expenses
Although mistakes happen, it’s a fact that overreporting expenses and malicious fraud can occur within an association board.
Make sure that as soon as you accept your position as a member that you review the financials of your association with your HOA management team. They can help you understand the ins and outs of your financial statements and make overreporting stand out to the board before it hits the eyes of the IRS.
4. Acting Without Expert Counsel
Sometimes your HOA may need professional services with help in a legal or financial situation. Not all board members are experienced enough to successfully see an association through an important legal issue.
Your management team is in place to help in these situations and can provide you with the right professional advice your board needs in any situation. Acting without help can dig your association into a deeper problem that ends up costing you time, money, and your reputation.
5. Unfiled Tax Returns
Yes, HOAs must file tax returns every year. Failure to file is an easy mistake to make that could lead to penalties, stripped tax exemptions, and other legal consequences your board should steer clear of.
6. Letting Outstanding Debt Slide By
Your board can’t afford to let owners stay delinquent, but it should also worry about any debts the association may have. Make it a point of habit every month to review any outstanding debts your association owes.
Factor these debts into your annual budget, because eventually, someone is going to come to collect. You don’t want to be in a situation where your association lacks funds because it failed to keep track of where funds were owed.
Avoid Top Management Mistakes With Classic Property Management
Don’t let a little mistake snowball into an issue that negatively affects your community for years to come. Let the HOA management professionals of Classic Property Management help.
Our decades of experience in the industry mean we’ve seen it all and can help you avoid any errors before you have a chance to make them. Contact us today to learn more about becoming a member of the Classic family.