6 Steps to Building a Better HOA

As HOAs continue to increase in size, we must prepare our communities for successful growth. As a board of directors, you’re obligated to protect and preserve the value of your community. By doing this, we must consider what factors and steps are necessary to build a strong community. 

1. Financial stability

Financial management is one of the most critical steps in building a better HOA. Financial assessments are a large part of what makes up the financial position of an HOA. By evaluating your HOA’s expenditure, the HOA can identify opportunities that could potentially lead to decreasing costs and expenses. 

Suppliers and vendors - Review your HOAs list of suppliers and vendors for areas of opportunity that could help reduce costs and fees. In addition, your HOA should evaluate service contracts, and yearly renewals that play a large part in the HOAs budget  — contracts such as this are a great way to approach vendors about customer loyalty programs or special discounts.

• Review your vendor contract history.
• Review vendor performance.
• Review financial history and profits.
• Comparison shop. 

HOA yearly budget - The purpose of an HOAs budget is to financially maintain the community's value. Many line items included in an HOA budget are there to help operate the HOA, such as maintenance, the reserve fund, landscaping, common areas, vendors, property taxes, events, legal fees, and utilities. In addition, many communities are now including HOA software as a new line item in their yearly budget. As more HOAs enter into a digital way of living, boards are now noticing the need to enhance their current software and digital forms of communication. 

Financial records - Improving your HOA’s financial records is another way to help build a stronger community. Financial records can contribute toward helping the board in making educated decisions about future spending and expenses. They also help increase financial transparency and areas of opportunity that could potentially help lower costs. Thanks to the many advancements in HOA software, HOAs can now utilize financial software and applications specific to their needs. For example, TownSq offers communities the opportunity to process online payments, request and participate in open forums, organize critical financial records, and manage contracts through a secure online portal. 

2. Technology

As the world of HOA software continually rises, we expect to see a significant shift of enhanced advancements in 2023. HOA software has shown to increase communication and streamline many of the day-to-day responsibilities necessary to run a community. 

Software updates - One of the best ways to improve your community is by ensuring your HOAs software is up-to-date. Boards and managers are now finding it necessary to evaluate their HOAs software and lack thereof. A few examples may include:  

• Financial software - A financial committee may benefit from a software update by using more advanced forms of accounting software to help minimize day-to-day responsibilities such as: creating invoices, distributing financial notices, submitting electronic payments, and, most importantly, collecting dues.
• Community website -  A community website has been known to play a large part in increasing communication and visibility within their community. It also creates a high drive to increase efficiency and automation. 

3. Community engagement

One of the most talked about HOA topics going into 2023 is the desire to increase community engagement. Now that more members are ready to step outside their doors, HOAs should consider this a new opportunity to create innovative ways for their members to get involved.

Community involvement - Consider ways for newer members to get more involved by conducting new member meetings for those that may be more curious about getting involved. Other examples of community involvement include special committee groups, planning social mixers, or participating in community service events. 

Welcome committee - A welcome committee works as a great way to greet and invite potential members to the community. It also allows the community to present its HOA in a more positive spotlight.

• Host a new member community meeting each month. 
• Include an engaging activity such as a raffle, happy hour, or fun activity as a way to incentivize more people to attend. 
• Ask board and committee group members to attend the meeting to show support and engage in conversations with potential members.  

4. Communication  

Increasing communication is a critical step in building a better HOA. As a board member, it’s important to understand why communication helps members stay connected. 

• Increase transparency - Transparency is an essential part of communication. It allows people to feel present, heard, and trusted by other group members. 
• Set clear expectations - Setting clear expectations can help an HOA enhance relationships between board members, managers, and homeowners. It allows all parties involved to better understand what is expected of them and the group. 
• Forms of communications - How an HOA communicates is a key part of what helps members engage with one another. Forms of communication may include email, text notifications, online forums, and newsletters.  
• Proactive communication - When you exercise proactive communication, you create a persona of trust and accountability. It allows those communicating to be transparent and obligated to do their part in helping others reach their goals. Examples of proactive communication may include: being prepared to answer questions before they're asked, encouraging conversation and feedback, creating a judge-free culture, and, most importantly, being ready to respond to difficult questions and feedback.  

5. HOA rules and regulations

Your HOAs guidelines and governing documents are one of the most important parts of maintaining an HOA. They protect and provide structure for all members of the community.

• Governing documents - Conduct a yearly audit for any governing documents that may need to be updated from the prior year. 
• Legislation updates - Review your communities laws and ordinances for any changes or new updates.
• Insurance policies - Insurance policies are often the reason why an HOA may experience financial hardships in receiving financial assistance. To maintain proper coverage, your HOA should inspect its insurance policies yearly. 

6. Security

Security is known to be one of the most important factors in why members decide to live in an HOA. People want to feel safe and secure in their homes, especially when a family is involved. 

• Ensure security cameras are correctly installed. 
• Provide 24-hour in-person security. 
• Get involved with your local law enforcement. 
• Organize a neighborhood watch committee.
• Create a community auto-notification system that allows members to receive updates regarding recent crimes.

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