Letter to the editor in response to to the article “The wild west of homeowner associations in South Carolina,” published in the July 29 edition of the Greenville Journal.
“The wild west of homeowner associations in South Carolina” deflects the primary cause of poor HOA experiences in South Carolina: the fact that, unlike realtors, property management companies are not regulated and have no certification requirements.
I’ve been involved in HOA governance for more than 20 years, working with six different management companies, one of which was prominently quoted as an industry expert in the article.
The key to successful HOA administration and operations is a professional management company. A property manager blaming HOAs for problems in the industry is akin to an auto technician blaming [a] customer for the technician’s failure to fix the car.
HOA boards are homeowner volunteers who rely on their property managers’ expertise and diligence to oversee the HOA’s administrative operational affairs. The scope and complexity of HOA operations is vast — financial statement preparation, regime fee collections, architectural requests, vendor selection, payables, reserve studies, structural repairs, landscaping and a host of other daily duties (not to mention owner and residential relations).
Yet the companies and managers who are paid and entrusted to guide HOAs have no regulatory oversight, certification obligations or fiduciary accountability.
Rather than develop and adopt industry best practices, management companies (including one cited in the article) are adopting two practices that sacrifice their HOAs best interest to personal profit.
First, service quantifiably decreases in direct proportion to the number of HOAs a single manager handles, yet management companies have increased a manager’s average load from approximately nine HOAs to more than a dozen.
Second, management companies have shifted from personalized client services to a call center model. Before, an HOA had a specific manager as a centralized and direct point of contact. Recently, however, companies are requiring board members, owners and residents to call in a request, set up a ticket and wait for a response. The lack of personal interaction slows response times, insulates the HOA service providers from its clients and leaves HOAs to do the tasks they’ve contracted from their managers. Several management companies in the Upstate don’t even have a physical presence in this region.
It’s intuitive to regulate property managers considering (1) management fees are one of an HOA’s largest budget items; and (2) managers are handling enormous inflow of homeowner funds, often with no external oversight.
Regardless, an HOA board best serves its community by responsibly selecting a good property management company.
Here’s what I suggest:
- Do not engage a company with no permanent physical presence in the area
- Insist on a dedicated property manager as a central contact point
- Ask for, and contact, other HOAs as references
- Ask for managers’ credentials and certifications
- Request the HOA-to-manager ratio
- Ask for management turnover within the management company
- Get a detailed explanation of the management company’s financial processes, bookkeeping, reporting and accounting system
- Avoid any service provider who espouses regulating it clients rather than itself
Kevin Reese
kevinann@bellsouth.net
864-593-0611
https://www.linkedin.com/in/kevinreese1/
