HOA Management Companies

Many years ago I worked in the collection department of a management company. The company specialized in management of homeowner associations. Each day as I watched the managers I felt they had the most prestigious job in the building. I envied how they could enter and leave the building anytime they pleased. Their reasons were all the same; they were going "out on property" for the remainder of the day. This seemed like the kind of job for me.

Because my employer knew I had no experience in management, I applied at another management company that advertised for a portfolio manager. They hired me without checking references. I was in a state where no license was needed to run a HOA community. Within weeks, I had a portfolio with fourteen communities and I began working with millions of dollars in budgets.

I had keys to the recreational centers, pools and some of the homeowner's condo units. They trusted me to allow workers inside while they were not home. These people had no idea who I was or where I came from. They trusted the management company. This was a big mistake.

I did very well learning the management of homeowner associations and I became known as an expert in my field. The unethical behavior I witnessed at the management companies made me realize how difficult it must be for a Board of Directors to hire one they can trust. The turnover of HOA managers is probably one of the highest I've seen in any field.

One company I worked for had a collection account on a homeowner. They had prepared the paperwork to foreclose on the house due to unpaid assessments. The fee to file the paperwork was $500.00, which was charged to the homeowner by the management company. As most homeowners in my communities, this one knew me well. He dropped off a certified check one day prior to the court filing. It paid his account in full including all unpaid assessments and extra collection fees. Since the paperwork had not yet been filed with the court, I did not charge him the $500.00 fee. I took the check to my boss and thought I would at least get a little praise for having a homeowner give me the balance in full. I was wrong. She placed the check in her desk, stating that she would post it after the paperwork was taken to the court house the next day. This way, she could add the $500.00 filing fee to the account. She was paid a "bonus" for every dollar she brought in on collection accounts. I was stunned! It took me less than a week to give my resignation.

I worked with another management company that did not share with the Board members a law suit had been filed against the Association. The suit was due to an error made in the management company's accounting department. The payoff amount given to the homeowner by the accounting department was well over the actual money he owed. The collection staff deposited the cash, giving all extra funds to the management company. The homeowner later sued the Association but the management company was listed as "agent" for the corporation and all court paperwork was delivered to them. My boss actually told me I could not share the law suit with the Association Board, or my job would be in jeopardy. I could not believe it! I had become rather close to the Board of Directors and they thought highly of me. There was no way I could keep this information from them and besides, it was against the law not to disclose it. I gave my two week resignation and during my last days I mailed out a copy of the lawsuit to the Board of Directors. I sent it from the management company mail room using their postage machine.

Who is managing your HOA? The best thing you can do as a homeowner is get involved. Know how to read the financial statements. You have a right to copies of them if you are a homeowner. Attend the meetings. Find out who the Board members are. I have several horror stories about Board Members who ended up on the Board without even living in the community. Horror stories! If you are on the Board of a community, make sure the "agent of service" (titled differently depending on each state) is a Board member and not the management company. Get involved and stay involved. Knowledge is Power. You can surf the CAI (Community Association Institute) website for members. Most management companies registered with them hire managers with certifications and educational requirements. It may not be a 100% guarantee that the management company is legitimate, but you have a better chance with a CAI member. www.caionline.com

I've lived all over the country and had many jobs, seeing careers come and go. I always thought I wanted to be a manager of HOA communities. It was the most stressful job I've ever had.