Condo administration cost (HOA dues)?

[braumeister]

We are having a tough time getting people to volunteer for the HOA board, and it looks as if we may have to hire a professional management company instead of our DIY approach.

If so, it will obviously raise our monthly dues, so I would appreciate hearing with others pay. If it's enough, it may induce some to decide volunteering would be in their best interests

If you have a professional management firm for your HOA, can you tell me about how much they cost per homeowner?

It will be some percentage of your monthly payment, and you may not have an exact budget breakdown that shows it, but a ballpark figure would be great.

 

[COcheesehead]

Currently we pay $450 for the year and we have a full time manager. Our yearly budget is about $150,000. The HOA covers mostly common/property, security not anything related to the individual homes.

 

[MC Rider]

I bet some of the management co's would be glad to give you some quotes or maybe just ball park info. I'd look at their web sites. Or Real Estate agents might be able to connect you to some.

 

[MichaelB]

If you have a professional management firm for your HOA, can you tell me about how much they cost per homeowner?

Ours come out to $639 per address for the year for 2021

 

[wolf]

$ 430 per month. 400+ Townhouses. Already tossed out yearly detailed budget. If I can find. Will post, what are HOA, pays for the management services. San Francisco, Bay Area, California. ($ 430/month, covers all expenses).

 

[braumeister]

I appreciate people trying to answer, but I wasn't clear enough in my question.

Your monthly payment is irrelevant, since the needs of each community are different. What I'm looking for is what part of your monthly payment goes to the management company. Completely independent of all the services they provide, such as landscaping, lawn mowing, snow removal, pool maintenance, etc., etc.

 

[Sunset]

Besides the issue of paying for the professional management. Changing to one often means (to my cynical mind) that the costs for landscaping, lawn mowing, snow removal, pool maintenance, etc., etc. ALL rise ~10% as a hidden cost due to a sudden need to change to the companies the management "prefers".

 

[CardsFan]

I appreciate people trying to answer, but I wasn't clear enough in my question.

Your monthly payment is irrelevant, since the needs of each community are different. What I'm looking for is what part of your monthly payment goes to the management company. Completely independent of all the services they provide, such as landscaping, lawn mowing, snow removal, pool maintenance, etc., etc.

We have an active board, but also a management company to handle the financial details. About 6.5% of our fees go to the management company as a direct fee ($22k out of $330k total expenses).

I see that as pretty reasonable to make sure we are doing everything above board.

The board is active selecting contractors, etc. I don't see the management company getting a bite of that apple.

 

[pb4uski]

...If you have a professional management firm for your HOA, can you tell me about how much they cost per homeowner. ...

Ours is $162/door/year... but that is only for accounting, billing, collections, financial reporting, overall management, mailings, managing elections, corporate records, etc. About 4.8% of our total budget.

Our largest costs are insurance, cable tv, lawn maintenance/landscaping, contract maintenance (our dedicated maintenance guy), repairs and maintenance, tree trimming and then management fees.

It all depends on what you have them do and what other subcontractors that you use.

 

[CardsFan]

Ours is $162/door/year... but that is only for accounting, billing, collections, financial reporting, overall management, mailings, managing elections, corporate records, etc. About 4.8% of our total budget.

Our largest costs are insurance, cable tv, lawn maintenance/landscaping, contract maintenance (our dedicated maintenance guy), repairs and maintenance, tree trimming and then management fees.

It all depends on what you have them do and what other subcontractors that you use.

Follow-up to my earlier comment. Ours are much like pb4uski. 6.5% is about $175/unit/year, and includes all he describes above.

 

[Silver]

I live in a central Florida 55+ golf community. The community has 623 homes that are charged the monthly fee of $185.00 or $2,220.00 per year. We have a management company that is on-site 3-4 days a week and manages about 60% of the HOA issues. (We have several resident volunteer committees that do the rest.)

We currently pay them $48,000.00 per year.

 

[rtroxel]

When I lived in a condominium, we had an HOA that hired a condo management company. The HOA oversaw everything the management company did, and when it came to budgeting major repairs and additions, each resident voted on the issue. A condo management rep would be at each of our monthly meetings, and the minutes of each meeting were posted on bulletin boards around the condo. This arrangement worked well, and gave every owner a voice and insured that the management company was kept in check.

Parenthetically, I find it a little odd that so few of your residents are interested in having an HOA, because that is one of the advantages in purchasing a condo: Everyone gets a say in what goes on there.

Roy in New Mexico

 

[EQMAN]

When I lived in a condominium, we had an HOA that hired a condo management company. The HOA oversaw everything the management company did, and when it came to budgeting major repairs and additions, each resident voted on the issue. A condo management rep would be at each of our monthly meetings, and the minutes of each meeting were posted on bulletin boards around the condo. This arrangement worked well, and gave every owner a voice and insured that the management company was kept in check.

Parenthetically, I find it a little odd that so few of your residents are interested in having an HOA, because that is one of the advantages in purchasing a condo: Everyone gets a say in what goes on there.

Roy in New Mexico

Ours is $14 per month per door with 184 doors that is paid to the Property Management Company plus out of pocket

 

[Lewis Clark]

Many communities find it challenging to recruit board members even when they have a management company. Even if you hire a management company you still need people to serve on the board. But a management company may take much of the load off the board.

We pay our management company about $85 per door per month, about 10% of our total budget. This includes:

Billing and collections
Paying bills (after board approval)
Accounting
Managing elections
Financial reporting
Guiding the budgeting process
Handling most contacts from residents
Storing HOA records
Taking and writing up meeting minutes
All mailings
Dealing with vendors (soliciting bids and overseeing the work, though the board makes the selections)
Handling most interactions with residents
Mailings, postage, making copies
Most interacting with our banks
Maintaining our community website
Interacting with our attorneys when necessary

I second the previous comment about interviewing a couple of management companies to see what they can do for you and how much they would charge.

Edited to add: In addition to the quoted monthly fee, ask about the administrative expenses they will charge you for each month (postage, copies, providing reports, writing checks, etc.) My numbers above include these costs.

 

[Teacher Terry]

Our condo buildings have 150 units. We have a hoa board and pay the management company 2k/month plus the salary of a full time maintenance worker. We have difficulty recruiting people to join the board.

 

[Aerides]

I appreciate people trying to answer, but I wasn't clear enough in my question.

Your monthly payment is irrelevant, since the needs of each community are different. What I'm looking for is what part of your monthly payment goes to the management company. Completely independent of all the services they provide, such as landscaping, lawn mowing, snow removal, pool maintenance, etc., etc.

But if you're looking for how big a slice is, the actual pie is also going to be very different in every community. Anyways, here's mine:

Our total annual budget (no pool, snow, but other maintenance, security, irrigation, park, reserves, all in) is $754k. The management company is $207k of that. We have just over 700 homes, and paid $1061 each for 2022, so ~27% of that is the management.

And of course, if we didn't have that company, some of those costs would still exist, on us: Accounting, legal, postage, website, remittance processing, etc. So, you'd be removing some of that if you're doing it now. We have an unpaid board of residents, and the company.

(ETA, not condo, SFH, but similar situation).

 

[MarieIG]

I do not live in a condo - but I recalled that shortly before I retired, I e-filed a motion on behalf of one of my clients which had a management agreement as one of the exhibits, so I hunted that down.

The management fee for 2022, is 72k per annum, and based upon the number of units (less one for the live in super) comes out to $600 per unit, per annum.

The management company collects all HOA fees, a large portion goes into the operating account, out of which they pay the super, porters, outside vendors, utilities, insurance, taxes, take their fee, etc. They receive approval from the board for expenses over a certain dollar amount - except in the event of an emergency.

 

[zinger1457]

I live in a small development of ~75 homes. No common areas so the only function of the HOA is to see that the CC&R's are followed and enforced. The management company doesn't do a whole lot, maybe drives around the neighborhood once a month for an inspection, holds quarterly meetings, and runs the architectural committee to approve changes. We pay only $150/year for our HOA dues, about $100 of that goes to the management company.

 

[Bamaman]

I lived in a swim/tennis community outside Atlanta. Our dues were about $450 a year, and we had a management company paying the bills, etc.

We had a clubhouse and pool complex that would cost about $1 million today to build. But our biggest expenses were the accrued costs of resurfacing 4 tennis courts every 2-3 years. Although relatively few residents played tennis, those courts ate the neighborhood's pocketbook alive.

 

[Carol1862]

Many communities find it challenging to recruit board members even when they have a management company. Even if you hire a management company you still need people to serve on the board. But a management company may take much of the load off the board.

We pay our management company about $85 per door per month, about 10% of our total budget. This includes:

Billing and collections
Paying bills (after board approval)
Accounting
Managing elections
Financial reporting
Guiding the budgeting process
Handling most contacts from residents
Storing HOA records
Taking and writing up meeting minutes
All mailings
Dealing with vendors (soliciting bids and overseeing the work, though the board makes the selections)
Handling most interactions with residents
Mailings, postage, making copies
Most interacting with our banks
Maintaining our community website
Interacting with our attorneys when necessary

I second the previous comment about interviewing a couple of management companies to see what they can do for you and how much they would charge.

Edited to add: In addition to the quoted monthly fee, ask about the administrative expenses they will charge you for each month (postage, copies, providing reports, writing checks, etc.) My numbers above include these costs.

Ours is $220 a household a year. We get same basic service as above. We do have a Board

 

[Freedom56]

At our condo hi-rise condo in Florida we used to use Atlantic Pacific Management and the overhead was 28% on all staff salaries plus a management fee. The management company did very little. We had issues with administration staff using owner units for their affairs with their mistresses. Our association took a different direction. In 2018, the billionaire bulk owner of the building decided to remove the management company. He also owns the majority of units in four other hi-rise condos in the area. So what he did was assign one property manager responsibility for four buildings and each association pays 25% of his salary versus having a full time property manager at each building. We have a full time property administrator in our building that reports to the property manager. Bids for maintenance such as landscaping and window cleaning are combined with all four condos. The monthly fees are $669. In 2011 it was $648. After we dropped the management company it dropped to $538 per month.

 

[SoClose]

Our Florida townhome 130 units mgmt fees are 5% of total budget

 

[OldShooter]

... If you have a professional management firm for your HOA, can you tell me about how much they cost per homeowner?

It will be some percentage of your monthly payment, and you may not have an exact budget breakdown that shows it, but a ballpark figure would be great.

For larger HOAs that are structured as nonprofits and required to file IRS Form 990, you can go to guidestar.org and download their tax returns The management fee will probably be broken out but even if not, you should be able to get closer than a "ballpark." Handball court maybe?

To access the 990s you have to sign up for a free registration. It's been years since I did that and I have never gotten any spam or any other annoyances as a result.

 

[Scuba]

Braumeister, perhaps I am misunderstanding your question, but I thought you were asking about the cost to hire a professional company to run the HOA Board because your HOA has insufficient volunteers to do it. I am not sure but I believe that is pretty costly, but the real problem is that an outside firm is not going to care as much as an owner would and therefore may make decisions that owners wouldn’t. It also makes units more difficult to sell because potential buyers may not react well to the Board having to call in an outside firm to run the HOA due to lack of homeowner interest.

I suggest getting some quotes in your area and also summarizing the other downsides of this approach. One of the HOA’s where we lived told residents we would have to do this if no one stepped up and how it could affect owners and all of the sudden, all Board positions were filled by owners. Good luck.

 

[Teacher Terry]

Braumeister, perhaps I am misunderstanding your question, but I thought you were asking about the cost to hire a professional company to run the HOA Board because your HOA has insufficient volunteers to do it. I am not sure but I believe that is pretty costly, but the real problem is that an outside firm is not going to care as much as an owner would and therefore may make decisions that owners wouldn’t. It also makes units more difficult to sell because potential buyers may not react well to the Board having to call in an outside firm to run the HOA due to lack of homeowner interest.

I suggest getting some quotes in your area and also summarizing the other downsides of this approach. One of the HOA’s where we lived told residents we would have to do this if no one stepped up and how it could affect owners and all of the sudden, all Board positions were filled by owners. Good luck.

In Nevada if you can’t fill board positions the state takes over and charges a fortune. Ours and most others locally have a board made up of homeowners who hire a management company to help with everything. We have 150 units and a full time maintenance worker. The company knows the laws and keeps us out of legal trouble. Plus when we need bids for items they know the best people to contact. Out of the 5 members 3 of us spend a fair amount of time on board duties but couldn’t do everything that the management company does.