HOA Management Challenges

November 22, 2022

Top HOA Management Challenges

At this time of the year, property managers and landlords look ahead at their challenges amidst industry trends, and HOA and community managers do the very same thing.

The question though is whether they’re going see and do anything different in 2023. If you haven’t evolved how you see market opportunities, association needs and trends, along with how to leverage technology, then it can make decision making and budget planning difficult.

A New Way to Look at HOA Management

Here on the ManageCasa blog, we try to help you see new business models, strategies, and opportunities. HOA’s are evolving. The growth of built for rent communities is just one example. And new SaaS cloud-based HOA software is helping with legal compliance, communications, and fee collection, along with increased business intelligence from analytics.

For property managers and HOA and community association managers, 2023 could be a year of doing more with less. Inflation and taxes will eat more budget, budgets may decrease, with staff reductions/vacancies, along with increased tensions between board members and homeowners will complicate your work. You must evolve to stay profitable.

While HOA software solutions such as ManageCasa help simplify these challenges and expenses, there are some potential issues for homeowner and association managers to keep a close eye on.

HOA in the News

The words laws, collections, disputes, regulations, courts, law suit, taxes, battles, legal fees, rights, government bills are appearing more in HOA related news stories on Google. These stories get big attention by the media. On top of that, weather, energy costs, taxes, and more might conspire to make community management tougher this year.

HOA legal risks and costs. Screenshot courtesy of the Bendbulletin

These 16 challenges for 2023 come from fiscal, political, legal, cultural and other sources. Although they’re external in nature, your HOA board member’s feelings of poor control, unappreciation, and stress is the signal you need to act soon.

Photo courtesy of Christina @ wocintechchat.com photo gallery & Unsplash.

Robert Norlund, a registered professional engineer and founder and CEO of Association Reserves, stated that approximately 30% of associations fall short in their reserve funds when having to finance a large projects — from Goodmanwalace.com article.

16 Current Issues in HOA Management

Rising Costs – In December, the US inflation rate reached it’s highest in almost 4 decades at 6.8%. Although the pain of the 80’s is long forgotten, HOA’s might find themselves under similar and growing financial pressure. Good financial planning tools will be needed to avoid emergencies.
Higher Expectations – Costs aren’t the only things that will rise in 2022. Board members and homeowners will expect HOA’s to keep service optimal despite the challenges listed below. New rules, homeowner financial woes, and Covid fatigue could make for conflict as the pandemic recedes and everyone adjusts emotionally to the changes. This is where the communication power of your HOA software provides substantial value.
Materials and Equipment Shortages – HOA service companies will under pressure to maintain service levels with high rising inflation along with materials and equipment shortages. Some believe these issues are not temporary and will continue throughout 2022. Lower budgets and operating capital means curb appeal and property values could decline.
Staff Shortages and Vendor Retention – Labor shortages and vendor/contractor losses could dig in deep for HOA’s too. Boards themselves might find it hard to retain members thus pushing more work on remaining board members and require extra work to recruit new board members. Service vendors, relied on to get work done might not be easy to retain. Higher salaries or contract fees are inevitable.
Insufficient Reserve Funds – Reserve funds good for previous years may be exhausted early in the year putting HOA’s into legal trouble since needed repairs and emergencies can’t be dealt with. Natural weather events such as fires, storms, and droughts are eating budgets fast.
Rising Crime and Security Related Costs – Greater security including cybersecurity is needed to stem the flow of rising criminal activity in communities and online. Surveillance systems and services will require more investment. Less time to enforce community violations too could add to community decay.
Delays in Service – Overworked staff, materials shortages, and cost restraints will delay many repairs and perhaps hurt regular HOA maintenance work as well.
Loss of Future Enhancement Projects due to Insufficient Funding – Inflation and changing priorities and operations challenges will mean improvement projects will likely be put on hold.
Hybrid Meetings – New legislation proposed in Senate will allow virtual meetings instead of in person, which changes the dynamics of how members and homeowners participate in management of the HOA.
Dues Collection – Rising costs and taxes, will pressure homeowners and result in dues default and more time and effort will be needed to collect them. Better communication via your HOA software platform might help to collect HOA fees online and apply late fees to encourage homeowners to pay on time in future.
HOA Laws – regulations on data privacy, physical meetings, commingling funds, HOA fund management, and electronic communications are coming into effect in some jurisdictions. The selling of information to third parties done by some may not be permitted any longer. Covenants, conditions & restrictions (CC&Rs) documents need to be kept up to date and your HOA software will help you keep them current.
HOA bylaw enforcement tasks – Managing complaints, responding, investigating, collecting information takes a lot of time. Tracking violations becomes more important due to the legal implications. HOA managers will need to track violations quickly and collect data on overall trends in violations in their communities and active proactively to cool down the sources.
Board Member Fatigue – increasing expectations, more friction and rules, and less compliance along with Covid and financial fatigue will likely increase board member turnover especially since most are unpaid volunteers. Board members will demand online community management solutions that respect their precious time.
Building Regulations – regulations are on the rise making operations/repairs more complicated and costly while homeowners may not care at all, or may even resist. Communicating the need well, repeatedly may ease the friction caused by building costs and rising fees for homeowners.
Homeowner Disputes – homeowners and community members are tired too and may resist rising fees, demands, or not want to comply with regulations. Owners may find more reasons to resist board changes or force them overturn regulations in the courts. Legal costs and trouble may be a threat in 2022.
Younger Board Members – new, younger board members will have new ideas on how boards should be run and will vote to change things. They will push for digital HOA solutions.

Modernizing with HOA and COA Management Platforms

HOA’s who modernize help themselves maintain revenues from fees, minimize expenses, and stay compliant with changing HOA laws and regulations.

With the help of a capable HOA software platform, HOA’s help themselves conduct business optimally and meet expectations of a changing board member profile and demanding homeowners. You HOA can be pivotal in helping you deliver services well, avoid legal conflicts, and plan for operational expenses.

Getting Community Association Work Done Better

automation the collection of homeowner/community member’s dues online
manage member information securely
share documents with appropriate stakeholders easily and securely
track and manage HOA violations quickly for resolution
generate real time up to date financial reports
create HOA budgets and track actuals
communicate with members and homeowners quickly and easily (no more email or telephone tag)

If you haven’t yet adopted a digital HOA management or community association solution, check out ManageCasa. ManageCasa helps you efficiently charge and collect owner dues, track violations, manage board member approvals, share documents, communicate efficiently and more all in one dashboard.

See more on ManageCasa’s HOA/Community Management Solution.