What is the most common HOA management fee structure?

Per door, also called per unit: a flat monthly rate charged for each home in the community, regardless of how many services that home actually uses.

Why is a lower management fee sometimes more expensive overall?

A low base fee can leave common services, such as mailings, violation letters, and document fees, billed separately as extras. A higher base fee that includes those services can end up cheaper in total.

How should a board compare management fee proposals?

Write a statement of work first, then compare every proposal against that same list of services, instead of comparing base fees alone or each company's own boilerplate pitch.

Hiring and contractingLesson 10 of 24

Academy/Community Management Companies

Management fees

Five common structures, and why the lowest number on the page is not always the cheapest contract.

Management companies typically price using one of five structures: per door (a flat rate per unit, the most common model), a flat monthly fee regardless of unit count, a percentage of the annual budget, tiered service packages, or a low base fee plus a la carte charges for extras. The number on the proposal only tells part of the story; what counts as included versus extra varies by company.

The five pricing models

Most management proposals fall into one of five patterns. Per door, also called per unit, charges a flat monthly rate for each home in the community and is the model you will see most often. A flat monthly fee charges one price no matter how many units the association has. A percentage of budget calculates the fee as a share of total assessments collected. Tiered or packaged pricing bundles service levels from basic to full service. Base plus a la carte sets a low starting fee, then prices each additional service separately.

"Per door/per unit: A flat monthly rate for each home in the community (the most common model)."

Source: HOA Management Fees: Cost, Inclusions and Extra Charges, RowCal

The base fee is not the whole price

A low headline number can hide a long list of billable extras: printing and postage, certified mail, enforcement letters, resale certificates and estoppel letters, rush fees, capital project oversight, after hours calls and homeowner portal access. A board comparing two proposals on base fee alone, without pricing out the extras it will actually use, can end up choosing the more expensive contract. See Extra charges for the full list and how to price it out before signing.

Compare proposals against your own scope, not theirs

The fastest way to compare fee structures fairly is to stop reading vendor pitches and start writing your own. A board that drafts its own statement of work first can hold every proposal to the same yardstick, instead of comparing whichever services each company chose to advertise.

"Draft your own statement of work (SOW) and distribute it to your management candidates."

Source: Tips for Evaluating a Management Proposal, Keystone Property Management

Remember, too, that you are hiring the company, not only the individual manager assigned to your account today. Ask about that manager's account load and confirm the fit, but price the contract for the firm, since managers get reassigned and leave.

Check yourself

Answer before you read the explanation, recalling it is what makes it stick.

A company charges $18 per unit per month, the same rate whether a home used every service this year or none of them. Which pricing model is this?

Company A quotes $15 per unit but bills separately for mailings, violation letters and rush documents. Company B quotes $19 per unit with those included. The board picks Company A on price alone. What mistake did it make?

A board wants to compare three management proposals on equal footing instead of grading each company's own pitch. What should it do first?

Sources

HOA Management Fees: Cost, Inclusions and Extra Charges, RowCal
Tips for Evaluating a Management Proposal, Keystone Property Management

Community Management Companies

Once you know how the fee is structured, the next question is what it actually includes: read Extra charges.

Which fee structures a company offers, what it treats as an extra, and typical dollar amounts all vary by market and by management company. Compare actual local proposals against your own statement of work rather than assuming a standard price.

Not legal advice

totalHOA Academy is intended to provide general educational information and a practical starting point for understanding community association governance and operations. While we aim to provide useful and accurate information, we do not guarantee that every article is complete, current, or applicable to your specific association or situation.

Nothing in the Academy should be considered legal, financial, tax, accounting, or other professional advice. Laws vary by state, and your association's declaration, CC&Rs, bylaws, rules, policies, and other governing documents may impose different requirements.

Use the information in the Academy at your own discretion. Before making decisions that affect your association, its owners, finances, legal rights, or obligations, review your governing documents and consult an attorney, accountant, or other qualified professional when appropriate.