2023 HOA Management Challenges

The set of challenges that homeowner association boards and management staff contend with every year does change.

Economies change, regulations and technology change, and new associations form. These changes really reflect what’s going on in the property management industry.

We all get caught up in the clutter of work responsibilities, forgetting that our environment is mutating into something new.  If we don’t stay up to date up on trends in regulations, market demand, and technology solutions, the HOA can suffer.  This is why being current on trends, risks and challenges should be a priority for any HOA board as well as the HOA management team. These issues may affect everyone’s job.

ManageCasa’s Digging into Trends and Challenges

A vital resource: Here on the ManageCasa blog, we try to build awareness of changes, progress, threats, new business models, strategies, and opportunities to improve your HOA’s performance.

HOA’s are evolving. The growth of built for rent communities is just one example.  And new SaaS cloud-based HOA software is helping with legal compliance, communications, and fee collection, along with increased business intelligence from analytics.

For property managers and HOA and community association managers, 2023 could be a year of doing more with less. And with some good management techniques, your 2023 could be eventful and fun.

While HOA software solutions such as ManageCasa™ help simplify these challenges and expenses, there are some potential issues for homeowner and association managers to keep a close eye on.

HOA in the News

The words laws, collections, disputes, regulations, courts, law suit, taxes, battles, legal fees, rights, government bills are appearing more in HOA related news stories on Google. These stories get big attention by the media.  It’s incredible that some law suits go forward, yet they do.

HOA legal risks and costs. Screenshot courtesy of the Bendbulletin

Photo courtesy of Christina @ wocintechchat.com photo gallery & Unsplash.

 

Robert Norlund, a registered professional engineer and founder and CEO of Association Reserves, stated that approximately 30% of associations fall short in their reserve funds when having to finance a large projects — from Goodmanwalace.com article.

 

Current Issues in HOA Management

1. Rising Costs – Inflation remains at its highest level in almost 4 decades. Although the pain of the 80’s is long forgotten, and the economy remains strong, inflation may not ease for years.  Good financial planning tools manage precious budgets and help to ease increasing tax loads.
2. Accounting and Financial Management – Managing the finances of an HOA can be a complex and challenging task. HOA boards must ensure that funds are allocated properly and that expenses are monitored and managed effectively.
3. Higher Expectations – Costs aren’t the only things that will rise in 2023. Board members and homeowners will expect HOA’s to keep service optimal despite the challenges listed below. New rules and homeowner financial woes could make for resentful owners who feel they can’t afford membership dues. This is where the communication power of your HOA software provides substantial value.
4. Materials and Equipment Shortages – HOA service companies will under pressure to maintain service levels with high rising inflation along with materials, labor and equipment shortages. Some believe these issues are not temporary and will continue throughout 2023. Lower budgets and operating capital means curb appeal and property values could decline.
5. Staff Shortages and Vendor Retention – Labor shortages and vendor/contractor losses could dig in deep for HOA’s too. Boards themselves might find it hard to retain board members thus pushing more work on remaining board members making recruiting new, competent board members challenging.
6. Vendor Management – HOAs may face challenge in dealing with vendors, including landscaping companies, maintenance contractors, and security providers whose prices will be rising and who have their own business priorities and may not be reliable.
7. Insufficient Reserve Funds – Reserve funds good for previous years may be exhausted early in the year putting HOA’s into legal trouble since needed repairs and emergencies can’t be dealt with. Natural weather events such as fires, storms, and droughts are eating budgets fast.
8. Loss of Future Enhancement Projects due to Insufficient Funding  – Inflation and changing priorities and operations challenges will mean improvement projects will likely be put on hold.
9. Rising Crime and Security Related Costs – Greater security including cybersecurity is needed to stem the flow of rising criminal activity in communities. Surveillance systems and services will require more investment. Less time to enforce community violations could add to community decay thus reducing future revenue.
10. Delays in Service – Overworked staff, materials shortages, and cost restraints will delay many repairs and perhaps hurt regular HOA maintenance work as well.
11. Hybrid Meetings – New legislation proposed in Senate will allow virtual meetings instead of in person, which changes the dynamics of how members and homeowners participate in management of the HOA.
12. Dues Collection – Rising costs and taxes, will pressure homeowners and result in dues default and more time and effort will be needed to collect them. Better communication via your HOA software platform might help to collect HOA fees online and apply late fees to encourage homeowners to pay on time in future.
13. HOA Laws – regulations on data privacy, physical meetings, commingling funds, HOA fund management, and electronic communications are coming into effect in some jurisdictions. The selling of information to third parties done by some may not be permitted any longer. Covenants, conditions & restrictions (CC&Rs) documents need to be kept up to date and your HOA software will help you keep them current.
14. HOA bylaw enforcement tasks – Managing complaints, responding, investigating, collecting information takes a lot of time. Tracking violations becomes more important due to the legal implications. HOA managers will need to track violations quickly and collect data on overall trends in violations in their communities and active proactively to cool down the sources.
15. Board Member Fatigue – increasing expectations, more friction and rules, and less compliance along with Covid and financial fatigue will likely increase board member turnover especially since most are unpaid volunteers. Board members will demand online community management solutions that respect their precious time.
16. Enforcement of Rules and Regulations – regulations are on the rise making operations/repairs more complicated and costly while homeowners may not care at all, or may even resist. Communicating the need well, repeatedly may ease the friction caused by building costs and rising fees for homeowners.
17. Homeowner Disputes – homeowners and community members are tired too and may resist rising fees, demands, or not want to comply with regulations. Owners may find more reasons to resist board changes or force them overturn regulations in the courts. Legal costs and trouble may be a threat in 2023.
18. Younger Board Members – new, younger board members will have new ideas on how boards should be run and will vote to change things. They will push for digital HOA solutions.
19. Maintenance Aesthetics and Repairs – HOAs are responsible for the maintenance and repair of common areas, including buildings, roads, and landscaping. For some managers, more significant investment in time, resources, and expertise might be necessary.
20. Resident Relations – HOA board members must maintain positive relationships with residents to ensure that their needs are met and that the community remains cohesive.
21. Disaster Management – HOAs must prepare for and manage disasters, including natural disasters and emergencies.
22. Insurance Costs and Coverage – HOAs must maintain appropriate insurance coverage to protect against liability and property damage. Insurance premium increases may require cutting coverage and withdrawing community services.

Modernizing with HOA and COA Management Platforms

HOA’s who modernize help themselves maintain revenues from fees, minimize expenses, and stay compliant with changing HOA laws and regulations.

With the help of a capable HOA software platform, such as ManageCasa, HOA boards and property management providers can keep things running smoothly.  You HOA can be pivotal in helping you deliver services well, avoid legal conflicts, and plan for operational expenses.

Getting Community Association Work Done Better

• automation the collection of homeowner/community member’s dues online
• manage member information securely
• share documents with appropriate stakeholders easily and securely
• track and manage HOA violations quickly for resolution
• generate real time up to date financial reports
• create HOA budgets and track actuals
• communicate with members and homeowners quickly and easily (no more email or telephone tag)

If you haven’t yet adopted a digital HOA management or community association solution, check out ManageCasa. 

See more on ManageCasa’s HOA/Community Management Solution.

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