Understanding the risks of self-property management

The pressures of self-managed communities

Self-managed communities have long valued independence, local control, and take pride in stewardship. Many HOA boards have carried that responsibility successfully for years, balancing budgets, caring for common areas, and responding to residents' needs, often with little outside support.

But the reality today looks very different from what it did even a few years ago. What once felt manageable has become far more complex. Expectations are higher, regulations are tighter, and the potential liability facing volunteer board members continues to grow.

The regulatory landscape is constantly evolving, with new legislation, stricter enforcement, and increased scrutiny around governance, employment practices, and financial oversight. At the same time, residents are more engaged and more vocal than ever before. Social media, online forums, and instant communication have changed how communities interact, often amplifying concerns and escalating issues faster than boards can realistically address them.

According to Michael Mendillo, President, East Region, FirstService Residential, these pressures are especially challenging for self-managed communities:

"Across the HOA industry, boards are under more pressure than ever to manage complex responsibilities with limited resources. In self-managed communities, that can leave boards exposed to legal, financial, and reputational risk if they do not have the right support."

 

The growing weight of compliance and employment responsibility

One of the biggest challenges facing self-managed boards today is compliance, particularly with employment-related responsibilities.

Many boards do not think of themselves as employers, yet they are often responsible for hiring, supervision, discipline, documentation, and sometimes terminating staff. They may also oversee vendors who work closely within the community, adding another layer of responsibility.

Jesse DiGiovanni, regional vice president of human resources, says this is one of the most overlooked areas in self-managed communities:

"Many self-managed boards do not realize how much employment requirements have changed. Even with the best intentions, inconsistent policies, documentation, and training can create real exposure."

These responsibilities often fall to volunteer board members who may not have formal HR training. While informal processes may have worked in the past, they can now leave associations vulnerable to complaints, legal action, or insurance challenges.

Donna Fiore, senior vice president, adds:

"Many boards do not realize how quickly employment-related decisions can become compliance issues. When policies are enforced inconsistently or documentation is incomplete, risk increases fast."

When volunteer leadership starts to strain under professional property management expectations

As compliance and employment responsibilities grow, governance strain often follows.

Self-managed boards are increasingly expected to operate with the same consistency, responsiveness, and institutional knowledge as professional property management organizations, without the same infrastructure. Over time, board service can begin to feel less like volunteer leadership and more like a second full-time job.

Board meetings run longer, decisions take more time, and documentation requirements increase. When challenges arise, boards may revisit past decisions due to incomplete records or informal processes.

This strain can impact continuity. Burnout becomes more common, experienced board members step down, and new volunteers may hesitate to step into roles that feel high-risk or overwhelming. As turnover increases, communities can lose valuable institutional knowledge just as operational complexity rises.
 

Post-pandemic expectations are reshaping communities

The way residents experience their homes has changed significantly. Communities now serve as workplaces, social hubs, and personal spaces.

As a result, expectations around communication, responsiveness, transparency, and service have increased. Residents want faster answers, clearer financial reporting, and better use of technology. They expect boards to be proactive rather than reactive.

In self-managed communities, meeting these expectations often requires significant time and effort from board members who already have full-time careers and personal responsibilities.

Ted Gammon, senior vice president, explains:

"In self-managed communities, volunteers are often being asked to perform at a professional level, and the reality is that kind of responsibility can demand 40 hours a week or more.

Over time, that pressure can affect decision making, continuity, and the overall resident experience. It also makes you wonder how sustainable the model is in the long run, especially when there is little or no succession planning in place."

When independence starts to feel like exposure

For many boards today, the question is no longer whether self-property management is possible, but whether it is sustainable. Rising insurance costs, increased scrutiny, and growing operational complexity have shifted the risk equation.

This does not mean self-managed communities lack strength or capability. However, the current environment often requires a level of specialization, training, and consistency that can be difficult to maintain without structured support.

The most successful boards are those willing to reassess their approach, ask hard questions, and protect their community and themselves by selecting a property management partner that preserves board authority. In the next article, we will explore what self-managed boards often overlook until a challenge becomes a crisis, and how strategic support can reduce risk while reinforcing board-led governance.
 
Contact us today to learn more.

This information is provided for general informational purposes only and is not intended to constitute, and should not be relied upon as, legal, regulatory, financial, or operational advice, or as a representation or guarantee of any specific services, capabilities, or outcomes. Property management needs, regulatory requirements, market conditions, and available services vary by jurisdiction, property type, and community. FirstService Residential provides services through locally based affiliates and associates, and services and results may vary by community, region, contractual terms, and applicable law.