HOAs present a broad spectrum of challenges and issues that arise due to conflicts between members and board members. No matter how great your HOA is, there will always be situations that arise in which people disagree. For this reason, HOAs and other organizations must draw up contracts to get everyone on the same page. If conflict ensues (and it will), a contract reminds everyone of what was agreed upon between the board and everyone in the organization. Contracts are legally binding and give either side leverage in settling disagreements. Below is a summary of some of the reasons why you need clearly defined contracts in your HOA.
Contracts Don’t Undermine Your Reserve Study
A reserve study prepares you for expenses that could arise over a long period for as long as the HOA is in effect. An example of this would be building expenses, landscaping, code enforcement, natural disasters, and governmental regulations. If you have no contract in place, the members of an HOA could incur unforeseen expenses that wind up coming out of the budget, throwing your reserve study off. In essence, contracts are a financially responsible means for keeping your reserve study on track.
Contracts Help Property Management Companies
Property management companies like Gassen can perform their role more effectively when the rules are set in place. If your tenants or HOA members know what the regulations are, it allows us to enforce them as needed. We can better serve you, the client, without any ambiguity in the guidelines. Contracts give us the leverage we need when dealing with HOA members who don’t want to play by the rules. It allows us to protect property owners or board members because the contract protects us.
Fee Structures are Understood and Outlined
One of the most common issues that come up in an HOA is fees and expenses associated with living in the community. Although no one likes fees, they are a regular part of the contribution that all members make toward the organization. Without a contract, members can honestly claim that they didn’t know what the fee structure was or how much they were going to have to pay annually. Fee structures outline what the fees are and where the money is going. Again, it puts everybody on the same page.
Contracts Cover a Range of Issues
Any contract with an HOA management company should include the specifics on a range of issues that involve the members. Some possible topics might include:
● What the HOA management company (Gassen) is responsible for handling, and the HOAs involvement
● Services and benefits to the members
● How members will be screened and approved
● Responsibilities for rent collection
● Responsibilities regarding maintenance monitoring and approval
Property Management Services in Eden Prairie, Minnesota
Gassen offers premier property management services for HOAs and property managers in Eden Prairie, Minneapolis, and St. Paul, Minnesota. Our team of financial experts can provide accounting services, local management, and manage upcoming projects. To schedule an initial consultation, call us at 952-922-5575, or you can message us on our contact page.