Residents pay a premium to live in an HOA-managed community and they expect certain returns on their investment. In addition to the obvious tasks such as keeping the community grass mowed, residents often demand capital improvement projects, such as installing a playground or constructing speed bumps. Besides keeping residents happy, these infrastructure enhancements have the added benefit of increasing community housing values and attracting new residents to your neighborhood.
As an HOA manager, you have the tough job of prioritizing the never-ending list of resident demands, coming up with the money, and ensuring the project is implemented correctly. Continue reading to learn tips about how to manage a successful HOA project.
Step #1: Decide on the Project
No HOA has enough money to invest in every capital improvement idea that is proposed by residents, so a prioritization needs to occur. First, solicit feedback from residents to come up with a Top 5 list of possible projects. This feedback can be gathered during formal meetings, informal gatherings, via email, or even a suggestion box.
Next, the list of projects should be reviewed by any experts available to the HOA; e.g. the HOA leadership, attorney, accountant, city government, etc. There is no use in entertaining digging a new pool if an expert can already tell you that a pool is forbidden by the city government and/or your insurance company.
Once a short-list has been developed, put the ideas up for a formal vote in an HOA meeting. Getting buy-in from HOA leadership and most of the residents is important for project success.
Step #2: Figure Out How to Pay for It
The question of how to pay for the project was probably well-discussed during Step #1, as there is no use entertaining projects that the HOA can’t possibly afford. And any well-run HOA should have an established capital improvement plan and fund already established.
Typical funding options for an HOA project includes:
- A separate capital improvement fund that your HOA has been regularly adding money to
- Your reserve fund
- Take out a loan to spread out payments over several years
- The dreaded special assessment: forcing residents to pay up for their share of the improvements (also happens to be the quickest way to get yourself voted off the HOA board).
Step #3: Write Down Exactly What Your HOA Wants
Also known as a request for proposal or project requirements, this document will detail exactly what the HOA is looking for: size, color, functionality, materials, timelines, budget, etc.
There are three reasons this step is critical:
- In the next step, you will send this document out to potential contractors to solicit bids.
- Later, you will provide this document to the residents to communicate what the project involves.
- If there is any disagreement on what exactly the HOA wants, you will want to have this debate (fight) now, and not when the contractor is in the middle of construction.
Step #4: Solicit Bids and Select the Contractor
The requirements document created in Step #3 should be sent to at least three potential contractors, who will then develop a bid or quote. HOA leadership should then hold formal meetings to review the quotes, debate options, and select a contractor.
Here are some legal tips to keep everyone out of trouble:
- Be on the lookout for potential conflicts of interest where an HOA leader is looking out for his or her own interests rather than the best interests of the community. The biggest example of this would be an HOA leader who pushes for the job to go to a family member “because they can cut us a great deal”.
- Ensure the contractor has active insurance and licenses before they step foot on your property
- Ask your insurance agent if the HOA is adequately protected during and after the project
- Have your lawyer draw up and/or review any contracts
Step #5: Appoint a Project Manager
Select someone on the HOA board, or an expert in your community, to be the single point-of-contact for the project. This doesn’t mean giving full authority to one person; the project manager must still report back to the HOA board. However, the project will flow much smoothly for both the contractor and the HOA, if there is only one person organizing and communicating the effort.
Step #6: Communicate to the Community
You should now broadly communicate the project details to the community. This can be done via a formal meeting, an email, or even posting a piece of paper on the bulletin board. If any resident should challenge a decision made, all of the above steps will help keep the project on track.
Obviously, the community will need to be made aware of temporary or permanent changes that may impact their day-to-day activities, such as road closures to install speed bumps or removal of an under-utilized tennis court to build a playground.
Continue to communicate necessary updates to the community before, during, and after the project.
Step #7: Handle Unexpected Changes
No project ever goes exactly as planned. Your project manager should be empowered to make rapid decisions on minor changes. Any major changes that impact the timeline, budget, and desired design as specified in the Step #3 proposal should go through a more thorough, formal review by HOA leadership.
Step #8: Celebrate Success!
When the project is finally complete, it is time to show off the result. Feel free to brag about what was accomplished, especially if the outcome was even better than expected.
Continue advertising the success of the project over a long-term period, so you can show the community where their capital investment money was spent. Months later, you can report back on how much the new playground is being used, or provide evidence that residents are happy with the result, or that property values increased, etc. Prove the money was spent wisely and maybe you’ll get voted in for another term.
Contact an HOA Professional
If you need help managing an HOA project, or any other aspect of running an HOA, companies such as Silvercreek Association Management can provide customized and turn-key HOA support, including:
- Homeowner Management Support: HOA meetings, member training, homeowner communications, policy enforcement
- Financial Management Support: budgeting, financial reporting, reserve studies
- Maintenance Management Support: Organizing or executing preventative maintenance, vendor management
- Capital Investment project management
- Emergency Support
- HOA Leadership consultation
The experts at Silvercreek Association Management have decades of HOA experience. If your HOA is struggling to get off the ground or struggling to survive, they can provide the support needed to take your HOA to the next level.