QUESTION

Can board manage HOA?

Asked on Dec 27th, 2015 on Corporate Law - California
More details to this question:
We are tired of HOA mgmt company, their lies, and coccuption. Want to manage ourself to get rid of the hassles. Is it legal to manage ourself, if yes, please let us know what needs to be done.
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1 ANSWER

Real Estate Attorney serving Oakland, CA at Sack Rosendin LLP
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Yes. Absolutely the Board and volunteers can manage the HOA without property management company. The main thing most property management companies are hired to do is collect the assessments and report delinquencies to the Board. In a large HOA, this can be a considerable task, especially for a volunteer, unless a trained accountant or bookkeeper. There are software packages, but all it really takes is a good spreadsheet. Eitther way, the real work is recording that entry for each and every check received each month. The second thing management companies like to do for you, is write checks and keep the general ledger and income and expense statement. Again, it's just simple bookkeeping. This usually includes taking care of recurring expenses, like a landscaping company, a pool service company, trash pick up, common area utilities and insurance premiums. Repairs, replacements, and improvements either get handled by the Board or are billed extra by the management company. This is where some management companies often do a lousy job. The third thing is preparation of the annual report to members. The Davis-Stirling Act includes several disclosures which are mandatory, including a balance sheet and income and expense statement, status of reserves saved and spent for repairs and replacements, delinquencies, and a copy of the Board's policy on enforcing delinquencies. The fourth thing is advising on corporate governance. A good attorney with experience with HOA's can provide this as needed. The legislature amends the Davis-Stirling Act almost every year. If your CC&Rs and Bylaws have not been updated in two years, they are probably out-of-date. A good property manager or HOA attorney will be up-to-date and provide guidance based on the latest verision. He or she will also have experience dealing with many of the internal conflicts among neighbors which confront every HOA Board. Another role a property manager performs is scapegoat for unhappy owners and Board members. Whenever something doesn't go exactly as everyone might wish, politically and socially, it might be better to blame the management company, than a resident Board member, whom you all have to live with and is generously volunteering his or her time, but didn't get something exactly perfect. The whole community needs such volunteers. Therefore, yes, an HOA Board with an active board, maybe help from some volunteers, and an attorney and an accountant on-call to field questions, should be able to do a good job. Dana Sack
Answered on Dec 28th, 2015 at 10:52 AM

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