How to self-manage an HOA

Start with the number. Take what your management company charges per home each month, multiply by your number of homes, and multiply by 12. Add any extra fees on your last few invoices, like charges for mailings, collection letters or extra meetings.

The real cost is volunteer time. Self-managing works when two or three board members are willing to own a job each, and when the treasurer is comfortable with a monthly routine. It is harder when the board can barely fill its seats, or when the community has a large staff, a big building with complex systems, or a long list of lawsuits.

Days 1 to 30: decide and give notice

1. 1.Read your management contract. Find the notice period, any fee for ending early, the date the contract renews on its own, and what it says about returning records and money.
2. 2.Read your bylaws and declaration for anything that requires a manager or limits what the board can approve without owners.
3. 3.Vote to end the contract at a properly noticed board meeting, and record the vote in the minutes.
4. 4.Send written notice exactly the way the contract asks, and keep proof of when it was delivered.
5. 5.Pick your software and assign every job in the table above to a person.

Days 31 to 60: get your records and your money back

Ask for these in writing, with a date. Check each item off as it arrives:

• Owner list with mailing addresses, emails and phone numbers
• Each home’s account history and current balance, including credits and prepayments
• Late accounts, payment plans, liens and any files already with an attorney
• General ledger, trial balance, balance sheet and income statement through the last full month
• Bank statements for every account, at least the last 12 months
• This year’s budget and the most recent reserve study
• Insurance policies and the agent’s contact
• Every vendor contract, with renewal and cancellation dates
• Governing documents and all amendments, plus board and owner meeting minutes
• Architectural approvals and violation history
• Past tax returns and the association’s EIN
• Keys, gate codes, pool fobs, and logins for the website, domain and email lists

Then deal with the bank accounts. If the association’s money sits in an account in the management company’s name, or in a shared account it uses for several communities, open new accounts in the association’s own name and EIN and have the balance moved. Put at least two board members on as signers.

Call your insurance agent. Tell them the board is taking over and ask whether your directors and officers coverage and your crime (fidelity) coverage protect volunteers who handle money, not just the manager’s staff.

Tell every vendor where to send bills from now on and who approves them.

Days 61 to 90: your first month on your own

1. 1.Enter each home’s opening balance from the old company’s final report, and check that the total matches what that report says owners owe.
2. 2.Write to owners: how to pay now, the date any old autopay ends, and who to contact with questions.
3. 3.Send the first bills from the new system and watch the first payments come in.
4. 4.Reconcile the first full month of bank statements, for operating and reserve accounts.
5. 5.Give the board its first monthly financial report.

• One person holds every password and is the only signer on the bank. When they move or burn out, the association is locked out.
• Opening balances are typed in without checking the total against the old company’s report, and an old disagreement follows you into the new system.
• Nobody reconciles the bank, so a missed deposit or a double payment sits unnoticed for months.
• Board decisions are made by email and never voted on at a meeting or written into minutes.
• Owners are not told their old autopay is ending, and a month of dues comes in late.
• There is no written collection policy, so late accounts are handled differently for different neighbors.