Hi, there! Joe White here from Grow Property Management, your trusted property management company in Philadelphia.
As a property management company owner in Philadelphia, we’ve seen firsthand the complexities that can arise when dealing with large Homeowners Associations (HOAs). Some of these HOAs have established their own maintenance companies, which can serve as a profit center for them. From an owner’s perspective, this may seem like a convenience—having maintenance services readily available and familiar with the building and units. However, this arrangement doesn't always work out as well as it might appear.
One notable example in Philadelphia is a large gated community called Naval Square. A few years ago, they launched their own maintenance division, and simultaneously made it much harder for outside contractors to work on the grounds. While requiring proof of insurance for contractors is fair, the underlying motive was clearly to limit access and encourage homeowners to use the HOA's own maintenance services. The goal seemed to be steering homeowners away from their preferred contractors and toward the HOA’s services instead.
From our experience, dealing with HOAs like this can create several challenges for property owners. For instance, the property management company we run has a network of vetted contractors who carry insurance and are ready to provide it at the gate when required. Fortunately, in the case of Naval Square, the staff at the front gate tend to be more lenient than the HOA management probably wants, which makes it easier for outside contractors to gain access.
However, there are still significant issues that arise. Recently, we had a situation involving two units, one of which we manage. There was water damage in a closet, and the HOA's maintenance team was called in to handle the repairs. We allowed them to proceed instead of sending in our own contractors, but this decision led to a loss of control over the situation. After completing the work, the HOA contractors noticed that the unit’s hot water heater was past its expiration date, even though it was functioning perfectly with no signs of leakage or other issues. Despite this, they reported it to the HOA, which then tried to pressure the owner into replacing the hot water heater.
This situation illustrates the potential pitfalls of using an HOA’s in-house contractors. While it may be convenient, homeowners lose a certain degree of control, and in some cases, can be pushed into unnecessary expenses. It’s important to understand that large HOAs often create additional hurdles when it comes to completing work on your unit, whether you're doing it yourself or hiring outside contractors. They may not always have your best interests in mind, as their primary goal is to maximize their own profit.
Another major concern is the quality of the contractors employed by these HOAs. In many cases, the contractors they hire aren’t necessarily the best available, simply because the HOA is limited to using individuals willing to work within their specific framework. By contrast, as a property management company, we have the flexibility to source the best contractors across the entire city of Philadelphia. We’re constantly vetting contractors, and if someone’s performance slips, we can easily switch to another. This allows us to consistently deliver high-quality work to our clients, ensuring that they’re getting the best value for their money.
HOAs, on the other hand, don’t operate with this same level of flexibility. They typically employ contractors directly, and if these workers underperform, it can be difficult for the HOA to make changes. Most contractors prefer to work for themselves and get paid in full, rather than splitting their fees with an HOA. As a result, the contractors working for HOAs may not be as skilled or motivated as those hired independently, and the work might end up being more expensive as well.
While there are some advantages to using an HOA's maintenance services—such as the contractors being familiar with the units and the building—it’s important to weigh these against the potential drawbacks. One major issue is that the HOA is often more concerned with protecting the building as a whole than with what’s best for individual owners. For instance, in the case of the hot water heater, the HOA tried to force the replacement of a unit that still had several years of life left in it, all in the name of preventing potential damage to the building.
Whilst investing in a property managed by an HOA with its own maintenance team can have its benefits, it’s essential to remain cautious. Be aware of the restrictions and hurdles they may put in place, and don’t hesitate to use your own trusted contractors when necessary. As a property management company, we always strive to find the best contractor solutions for our clients, ensuring that they get the best quality work at a fair price.
