5 Risks Of Being A Self-Managing HOA


Many HOAs are self-managing. Whether it’s due to a limited budget or preference, these homeowners associations often find themselves in risky situations. From legal trouble and resident neglect to overworking, these are the risks of being a self-managing HOA.

You get into legal trouble. Without legal counsel, a homeowners association could easily land in hot water. The following are a few common examples of how your association can find themselves in a courtroom:

  • An HOA board member fails to abide by the legal duties of care, loyalty, and to act within the scope of authority.
  • A board member is charged with embezzlement or fraud of HOA finances.
  • A board member gives a community contract to one company over another because of personal history.
  • An HOA board member handles a resident dispute inappropriately, and the resident places charges.
  • A subcommittee chair appoints their friends and family despite their disqualifications.
  • A resident confides in a board member about an impending foreclosure in order to arrange a payment plan for HOA dues, and the board member discloses this information to another resident.

These are all sticky situations that happen frequently enough that legal counsel should be on call for homeowners associations. Self-management in these troubling cases can be damaging to the community’s reputation, finances, and harmony.

You neglect your community. When your board has a lot on their agenda, you could forget some important aspects of your community. Whether you’re leasing out rental units or are planning annual community events, too many to-dos can be overwhelming and stressful.

You’re more likely to maximize your benefits, time, and investment by hiring a community association management company like IKO in Olney, Maryland.

You become overworked. Many homeowners association board members are volunteers who have busy personal lives. From children to work to extracurriculars, personal responsibility often takes priority over volunteering. When you try to do too much, you become overworked, stressed, and tired.

Hiring a community association management company is the best solution to take care of HOA needs while you maintain your personal life. Most companies take care of the following:

You’re ill-suited for the job. Many people become a part of the homeowners association to volunteer, make community decisions, change HOA rules to their benefit, and so on. While there’s nothing wrong with those reasons, a lot of HOA board members don’t have the right experience to move the community in a positive direction.

As a self-managing HOA, you take what you can get when it comes to volunteers. This process occasionally leaves you with helpful residents who don’t know what they’re doing. If you’d rather focus on the future of the community, hire a community association management company to take care of internal affairs.

You don’t have the right connections. A homeowners association is often compared to a business. A huge part of business is making connections and networking. The same concept goes for an HOA. A self-managing HOA has to rely on the connections of its volunteers or previous contract experience.

An HOA that’s run by a community association management company has access to highly reviewed and fairly priced plumbing and HVAC experts, landscapers, service providers, and other subcontractors. This saves your board money and time when it comes to maintenance, renovations, utilities, and more.

For more information about risk management in homeowners associations, download IKO Community Management’s new guide. Click on the button below to get started:

Download the Guide To HOA Risk Management Standards