Three Letters Vital for Running a Self Managed HOA

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A self managed HOA puts power and responsibility in the community’s hands, allowing board members and officers to be responsive to their neighbors’ needs without consulting a third party.

That means solutions can be efficiently tailored to fit the community as a whole. If there’s a problem, it will be addressed by people you’ve met at the pool, at a Christmas party, or while walking around your neighborhood.

Because the leaders are so connected to the community, a self managed HOA generally has fewer rules than those run by property management companies.

However, no homeowners association can exist for long if it doesn’t enforce the rules it has on the books. With human nature being what it is, there’s always a potential for dues to go unpaid and violations to be committed.

It’s important to remember that issues should not be decided on a case-by-case basis. Your HOA’s founding documents, bylaws, and rules have been established to ensure that all compliance issues are handled in an uniform fashion.

By relying on legally-binding documents that all homeowners agreed to abide by, your self managed HOA can deal with whatever issues crop up without getting anybody’s emotions stirred up unnecessarily.

Everyone in the neighborhood should have easy access to all of the HOA’s founding documents. They can have paper copies, but the right HOA software can make digital copies available any time of the day.

Self managed HOA

Proper documentation is essential when dealing with compliance issues. Three forms are particularly important for a well-run HOA:

  • violation letter
  • lien letter
  • estoppel letter

Communities should be friendly places, but sometimes, homeowners need to be encouraged to fulfill their legal obligations. It falls to officers and board members to see that standards are upheld in a professional and respectful way.

PayHOA Letters for your self-managed HOA

Violation letters for a self managed HOA

When people move into an HOA community, they have expectations for how things should be done. Violations by one homeowner can affect everyone’s quality of life.

The most common violations involve

  • landscaping
  • vehicles and parking
  • renting out a home
  • trash pickup
  • exterior storage
  • pets
  • noise
  • holiday decorations
  • design changes   

Any of those problems could result in a violation letter. It’s important to remember that violation letters aren’t about starting an argument. Their purpose is to report problems and reach solutions.

With the potential for escalation, it would be wise to discuss potential violations with homeowners before the notification process. Friendly conversations are less likely to make people feel as though they’re being pushed into corners.

The next step in enforcing rules and covenants, conditions, and restrictions (CC&Rs) is to notify the homeowner of a violation.

Letters should include

  • name of violator
  • details of the violation
  • warning of possible consequences
  • request to correct the violation

Remember that the enforcement of the rules should be reasonable and non-discriminatory. The board can’t arbitrarily issue a letter. Violations must be based on the HOA’s CC&Rs, bylaws, and rules.    

Ideally, the notice corrects the problems. Homeowners also should have due process and chances to state their cases during a hearing.

Maintaining a record of notifications and hearings will serve the HOA board well if the matter escalates to involve arbitration, mediation, or the courts. Robust HOA management software can make it easy to keep a digital record of all correspondence.

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Lien letters

A self managed HOA has multiple financial obligations. If dues aren’t paid by homeowners, there’s a chance those obligations can’t be met. 

Dues are also a matter of fairness. A self managed HOA is a community of people who agree to make sacrifices for the common good. Everyone should bear the financial burden of maintaining the neighborhood. If people aren’t paying their fair share, a lien letter can be issued.

A lien letter should include

  • name of the debtor
  • details of the lien
  • amount owed
  • warning of possible consequences

If polite conversations and official notifications don’t convince homeowners to comply, then HOA boards may attach a lien on the delinquent property.

A lien is a legal claim on another’s property until a debt has been paid. It’s a way to guarantee an obligation, such as one established when a homeowner makes legally binding agreements with an HOA.

Once the lien has been recorded, it will show up during title searches. If the homeowner wants to sell or refinance the property, the lien must be paid first.

An HOA might have to enforce its lien by filing a lawsuit to request a court to foreclose on the property.

Estoppel letters

People retire, accept job offers, find their dream homes, and leave the comfort of your HOA to build their lives elsewhere.

But before they can sell their house, they need an estoppel letter. It’s a breakdown of the homeowner’s relationship and obligations to the HOA. The letter explains:

  • monthly dues
  • upcoming special assessments
  • the current owner’s payment history
  • consequences of nonpayment

The letter is part of the homeowner’s obligation to provide full disclosure. It’s a service to the buyer because it lays out the monthly (annual, quarterly, etc) costs of living in the neighborhood. Buyers are also alerted to upcoming special expenses, such as improvements to the pool or repainting the clubhouse.

An estoppel letter is a legal agreement between the HOA and the buyer. In the event of a dispute, the letter can be used to prove the new homeowners were made aware of their obligations before they moved into the neighborhood.

Self managed HOA software

When newly elected board members step into roles of responsibility, it can come with a filing cabinet full of documents. It might seem as though an avalanche of paperwork is ready to descend upon their shoulders.

But there’s another option for a self managed HOA. Homeowners association software makes it easy to organize and maintain a digital paper trail, which can

  • reduce the risk of mistakes
  • improve efficiency
  • save time

PayHOA’s software solution provides one-stop storage for a number of templates important to the smooth running of your homeowner’s association, including violation letters, lien letters, and estoppel letters.

With PayHOA, you can easily upload documents and make them available to homeowners in your neighborhood on a 24/7 basis. Our system allows you to store all messages in a single dashboard, so you have a searchable audit log of all homeowner communications.

Document management is a simple process. Everything can be organized in files and folders. Those files can be private, shared with everyone, or shared with specific people.

PayHOA’s software is particularly useful when it comes to tracking violations:

  • Violations can be created from your desktop, tablet, or phone.
  • Owners are automatically notified by email, and physical copies can be sent with the click of a button.
  • When a homeowner fixes an issue, the violation can be closed. 

In addition, dues payments can be automated with PayHOA. Homeowners can “set it and forget it,” making it less likely for your board to need to send out a lien letter. It helps to head off the problem before it happens.

Stepping up to take on responsibility in your self managed HOA means there’s always the possibility of uncomfortable conversations with your fellow homeowners. It’s important to keep your cool while also making sure all of your HOAs rules are applied equally and fairly. 

PayHOA offers an HOA management software solution for HOAs of any size or managerial priorities. To find out if PayHOA fits all your HOA management needs, try our software free for 30 days.

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