Most large condo buildings are maintained by a management company, but it isn’t uncommon for smaller condominium associations to be self-managed. In fact, I have a current listing that is a historic condo that is part of a self-managed Home Owner’s Association (HOA) with 7 units. I helped both the sellers and their son buy into self-managed HOAs and both have expressed they are happy they aren’t managed by a large management company.
Just as with anything else, however, there are pluses and minuses. They may look like big bargains because dues are typically lower than with HOAs maintained by large management companies but know what you are getting into.
Self-managed HOAs may be cheaper, but they also may be a lot more work
Someone needs to manage and maintain the complex, so if an outside management company isn’t doing it that means the people living there have to figure out who is responsible for what. It takes a lot of time and effort to maintain a building… who cleans the common areas, rakes the leaves, clears the snow, maintains the heating system, manages the finances, etc?
My experience has been that the association elects a board who contracts for outside services like trash removal and snow plowing, etc, and figures out an annual budget to cover maintenance and operational costs. Many of these self-managed associations have been operating effectively for a long time so the ground work has already been done and as long as individual owners are willing to participate it works smoothly. But know that everyone shares in the responsibility, and it can help keep the building better maintained when everyone takes ownership of the task of keeping it in good condition.
You have more control over when/what projects get done
Since the individual owners have direct control over the building, maintenance and other things can get done more quickly… but the owners must come to a consensus without outside oversight.
Working together can build a sense of community
When everyone takes part in managing the property, maintaining common spaces, keeping the shared laundry room functioning, etc, you feel a part of the community.
Self-managed associations can raise red flags when it comes time to sell
Not everyone wants to be part of a self-managed community, however. Lenders can be more wary of self-managed associations. Be sure that the association files tax returns and keeps good financial records, which will be required for obtaining a mortgage.
Whether self-managed or managed by an outside management company, all properties that are part of a Homeowners Association (HOA) must provide documents for 10-day review before a purchase agreement becomes binding in Minnesota… including copies of the declaration, articles of incorporation, bylaws, rules and regulations of the association, any amendments or supplemental declarations, and current financials.
