What are the Differences Between a Condominium Fee & an HOA Fee?

If you live in a Condominium or a community with a Homeowners Association, you are aware that you will see a recurring charge to cover Condo or HOA expenses. In many ways, both fees are essentially the same and help fund the maintenance and upkeep of the community. The Association can use these fees differently depending upon the type of Association.

Homeowners’ vs. Condominium Associations

The major difference between a Condo association and an HOA is the scope of the property that the Association is responsible for maintaining. In a Condominium, each member owns the unit individually but retains joint ownership in the building and its grounds. Links between residents in a Homeowners Association are not so binding: Homeowners individually own their lots and homes, and the HOA owns the common areas. Homeowners have no monetary interest in the common areas owned by the HOA other than ensuring that the Common Elements remain esthetically appealing.

Difference in Amount of the Fees

A Condominium Association fees and HOA fees may vary significantly. They are based on the funds required to support all the common elements. Because the fees of a Condominium Association will handle the repair and maintenance of the housing units and common areas like pools, parking lots and other areas, they are typically higher than the fees charged by an HOA with a similar amount of homeowners. The individual homeowners bear the costs of maintaining their own homes in the HOA – a cost that is included in Condo fees – so a Homeowners Association usually does not require the level of funding that a Condominium Association does.

Assessments

For most Homeowners Associations, the fees are assessed uniformly, with each lot owner to pay an equal share of projected annual budget. System evaluation of a Condominium unit is not as clear. Condo owners often have different percentages of ownership in the building, with larger units having a higher proportion of the property. The costs of the Association are not divided equally between each owner, but paid in proportion to the percentage of ownership.

Fees vs. fines

Many Condominium and HOA statutes provide the Association with the power to impose fines on members. But, the Associations must use fees and fines for different purposes. An Association uses fees (assessments) to cover the fees for maintenance and upkeep of their community. Fines are used as a punitive measure to encourage all residents to follow the rules put in place by the Covenants and By-Laws. Because they are not a stable source of income, fines are not typically used to pay for routine maintenance.

For more information on how Beacon Management Services can assist your Homeowners Association or Condominium Association in the Atlanta area, please call: (404) 907-2112 or email Lisa Simmons at lsimmons@beaconmanagementservices.com. Our complete list of services is available at: www.beaconmanagementservices.com.

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Thinking of Self Management for your HOA?

In the homeowner association industry, there are two distinct approaches you can take when it comes to management. You can either hire an HOA management group to handle the day-to-day affairs of your organization, or you and your other board members can attempt to manage the HOA by yourselves—a practice known as self-management.   Both have their merits and—at the end of the day—it might be tempting to go the self-management route. After all, hiring an external management group can be costly, and if your neighborhood isn’t exceptionally large, why spend money doing what you can do yourself for free?    Good question.  However, expense is not the only consideration when evaluating your options.

I recommend self-management only if your HOA has minimal financial, administrative and maintenance responsibilities.   If you do make that choice, then you must educate yourself on the best practices, risk mitigation and legal applications of community management.  Start by joining your local chapter of the Community Associations Institute, the professional organization dedicated to our industry.  CAI members have access to information on the trends in this rapidly changing industry—with practical knowledge and insights from leaders in the field, best practices, research and tools you can use every day.  CAI provides information, resources and education programs—whether you’re a board member, manager, CEO or professional service provider to community associations.

If you decide that self-management is just too much work, then begin by searching for the right management company to help you.

The questions below are important to ask when interviewing a Property Manager.

• Are they proactive rather than reactive in their communication?

• Is your Property Manager easily reachable in the office or via mobile phone?

• Is your Association receiving the benefits of volume purchasing?

• Is your Property Manager knowledgeable in construction and facilities management?

• Does your management company have the technology to forecast building maintenance issues before problems occur?

• Does your Property Manager have extensive knowledge with Insurance and Risk Management?
  • Educated in Directors & Officers coverage, Fidelity Bond, flood insurance, property and personal loss assessment (for fire, liability etc.) and other policy coverages?

• Is your Property Manager informing the Association’s insurance agent of various safety features in your building that can significantly contribute towards a lower premium (i.e. fire sprinkler system, security system, building retrofitting, no filing of claims (especially water claims) within the past three years, etc.); which in turn can maintain or possibly contribute towards a reduction in your monthly homeowners dues?!

• Has your Property Manager received the proper education and certification to manage your Association in compliance with state law?

• Do they have the Association’s best interest when performing their duties?
  • Spending Association funds prudently without sacrificing quality and workmanship.
  • Vigorously pursue delinquent HOA dues (late fees).
  • Improving the standard of living expected from home ownership.
  • Striving to maintain and improve the value of your home or building?

• Do they have any conflicts of interest with vendor performance?

• Do they obtain several estimates for large improvement projects?

• Do they use licensed (and insured) vendors and contractors?

• Do they profit from service-related contractors, vendors or suppliers (at the HOA’s expense)?

• Does your current management company charge additional fees beyond the scope of the management agreement (i.e. messenger services, deposit services, fax transmissions, additional fees for impromptu meetings, etc.)?

• Are you getting complete financial reports on a monthly basis (or when requested)?

• Is your manager thoroughly prepared for Board and Association meetings including thorough knowledge of all governing documents of the HOA?

• Do they attend continuing education programs to keep informed on changing local, state and federal laws pertaining to property and association management?

Make sure you’re satisfied with the answers to all these questions before making a final decision.  Professional managers are dedicated to serving your community. Put them to work for your Condominium or Homeowners Association and your board should benefit accordingly.

For more information on how Beacon Management Services can assist your Homeowners Association or Condominium Association in the Atlanta area, please call: (404) 907-2112 or email Lisa Simmons at lsimmons@beaconmanagementservices.com. Our complete list of services is available at: www.beaconmanagementservices.com.

Thank you for your time!

Why employ HOA Management Professionals in Atlanta?

Many HOA homeowners believe that the Board of Directors handles the day to day management of the community. While self-management may work in some cases, it is easy to become overwhelmed by all of the responsibilities associated with running the community. After all, even the most diligent volunteer may not want to deal with maintenance responsibilities, tax issues, legal ramifications and other tasks necessary to run the property. Management firms should be considered as a viable option to provide the leadership and support necessary to oversee community business. The cost of hiring an HOA management company is much less than the unintended consequences from mismanagement. Self-management was an idea originally created by developers who held the belief that volunteers could handle all association positions at no cost to the HOA. In our opinion, that is an unrealistic expectation.

Condominium and Homeowners Association Management require considerable knowledge in many different areas – such as conflict resolution, cost management, risk mitigation, insurance requirements, financial reporting, budgets, legal issues, proper collections, maintenance and most importantly, an understanding of the Governing Documents. In addition, Association managers must be licensed by the Real Estate Commission in the State of Georgia.   Volunteer Boards are often not trained or licensed much less have time to learn every facet of maintaining the Association. Would you go to a doctor who isn’t properly certified and experienced in their field? Definitely not. We believe running a non-profit corporation (your HOA) is no different. It requires skill, leadership, experience and informed guidance. Professional Management Services can ensure that all requirements are met to add to the value of your community. Strategic planning, real estate expertise and continuing education are very important to the success of your community.

HOA and Condo management companies also become a buffer between the Board and the residents living in the community. Collection of dues and deciding how the funds are dispursed can sometimes cause conflicts between neighbors. Employing a Management Company helps alleviate that stress which enables a Board member to refer difficult issues to the property manager.

Research all your companies very carefully. An Association must not only assess the value of these solutions (cost), but the quality of services offered.

For more information on how Beacon Management Services can assist your Homeowners Association or Condominium Association in the Atlanta area, please call: (404) 907-2112 or email Lisa Simmons at lsimmons@beaconmanagementservices.com.

Our complete list of services is available at: www.beaconmanagementservices.com.

Thank you for your time!

What Does an Atlanta HOA and Condominium Management Company Do?

Common Question:

I think if our board HOA has to solve all the problems, why do we need a management company? The management company is compensated for their services; the board is not. What is the responsibility of the management company?

 

 

Community Management for Your HOA in Atlanta

If your Atlanta area HOA or Condominium Association employs a management company, the ultimate decisions are STILL the responsibility of the elected Board Members. When problems arise in the neighborhood, the representative of the management company assists the Board in solving problems of the Association.

One must understand the role of the management company and the board before deciding whether to hire a manager.

Running an Atlanta HOA or Condo requires a variety of skills, depending on the size of your community and extension services, it may require a huge time commitment.

Someone has to prepare the operating budget and annual capital expenditures. The budget must be mailed to the owners before the start of each year, and a meeting of the owners must be scheduled and a vote must be held to ratify the budget.

Someone has to manage the billing and collection of dues, send final notices and take action for the recovery of arrears. Someone has to negotiate and monitor service contracts from the vendors (landscape, pool, and so on).

Someone has to determine the amount and type of insurance required to properly secure the HOA, its officers and directors, and certain common elements.

Someone has to make periodic inspections of houses and lots and respond to violations of restrictive covenants of the community. Someone has to process and pay vendor invoices, track bank accounts, invest capital reserves and prepare income statements / recurrent costs. Tax returns must be filed each year.  And all of these tasks are just the “tip of the iceberg”!

Without a management company, all these tasks (and more) fall on the shoulders of the board of the HOA. Most HOA management companies offer a la carte service. And others are “All-Inclusive”, Full-Service Management Companies, such as Beacon Management Services in Atlanta.

It is up to the board to assign roles to the management company, all critical decision-making authority regarding the operation of the HOA keeps with the board. The community manager is simply to carry out the directives of the HOA board.

Similarly, the elected Association board has the ultimate responsibility for decisions regarding the operation of the Atlanta Association.

For more information on how Beacon Management Services can assist your Homeowners Association or Condominium Association in the Atlanta area, please call: (404) 907-2112 or email Lisa Simmons at lsimmons@beaconmanagementservices.com. Our complete list of services is available at: www.beaconmanagementservices.com.

Thank you for your time!