Category Archives: Self-Management

The Benefits of a Condominium Association Website

Posted on July 30, 2013 | 5 Comments

If your condominium association doesn’t have a website, I strongly recommend you get one. They can provide a plethora of services at a relatively reasonable cost and can be a self-managed association’s best friend when trying to provide large quantities of information to residents in an efficient manner. Further, they are a great way to publicize your property as most prospective buyers and renters begin their condominium search online.  Not sure that a website would be of that much use? This post is dedicated the many ways that self-managed condominium association Boards can use a website to their advantage.

Don’t have a tech savvy Board? No problem! Services like AtHomeNet provide websites exclusively for community associations that can be customized to meet the needs of your property for as little as $35/ month. All of the website perks I discuss below are available through this service.

Community Photographs

A gallery of quality photos can make your property appealing to potential buyers. If you make them available on your website, you will find that realtors will begin to actively use these pictures in their property listings.

General Communication

Associations have an unending list of things to communicate to their residents. Your website can be used to post and send email notices about association projects, policy updates, cable and internet options, homeowner maintenance reminders such as air conditioning service, Board meeting agendas and minutes, social events, and much more.

Board Member Contact Information

One way Board members can make themselves more accessible to homeowners, which in turn tends to make homeowners more confident about the Board’s ability to management of the property, is to make their contact information available to homeowners. I recommend that each Board member establish a unique email address used exclusively for association business.

 Events Calendar

A website events calendar is a great way to community upcoming events to residents. This can be used for association-sponsored social events, area events, board meetings, proxy/ voting deadlines and timelines for major association projects, just to name a few.

 Classified and Condos for Sale/ Rent

Most association websites offer homeowners a place to list personal items for sale, condos for sale or condos for rent.

 Community Policies and Forms

It’s smart to keep all frequently requested policies and forms on your website. Good examples of this would be the property’s rental policy, the association’s bylaws and declaration, insurance certificates, maintenance fee schedules, or a frequently asked questions sheet.

Credit Card Maintenance Fee Payments

Many association website companies offer homeowners the ability to pay their maintenance fees by credit card on the website. Usually there is a several dollar convenience fee but for residents that need to make a payment immediately, this can be a good option.

Official Record Storage

As discussed in our post about the Official Records section of Florida Statute 718, condominium associations have a responsibility to maintain certain Association records and make them available to homeowners upon request. What would be easier than to direct homeowners to the property’s website to review specific records? It probably isn’t feasible to store all of the Association’s records on the website; however, the most commonly requested documents certainly can be. These documents include recent meeting agendas and minutes, monthly financial statements, the Association’s budget and maintenance fee schedule, and any property rules and policies. The website also serves as a web-based backup system for your key official records.

Area Information

Though not a necessity, providing information about your property’s surrounding area can be a nice addition to your website. You can include emergency contact information (e.g. the local fire and police departments, emergency hotlines), evacuation information if you are in a flood zone (e.g. shelter locations), additional parking options if parking on your property is limited, local restaurants and sites, local government website and information on recycling programs. Further, your website can be a great way to communicate with residents before or after a hurricane (learn more about hurricane preparedness for your association here).

In all, a website can be a tremendous tool for condo association Boards and is definitely worth the reasonable annual fee. As always, if you have any questions, feel free to contact us.
Emily

Emily Shaw is a condominium homeowner in Tampa, Florida and a Director of VERA Property Management, a firm providing full-service community association management in the Tampa Bay Area as well as consulting, financial and legal services to all Florida community associations. 

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Finding the Middle Ground between a Professional Management Company and Self-Management

Posted on June 24, 2013 | 6 Comments

Many condominium association Board members find themselves in what seems like a no-win situation: unhappy with professional management companies but unsure if they have the experience or available time to completely self-manage their communities. What options does the Board have in between these two extremes?

In fact, there are innumerable ways that a Board can manage a condominium association. Boards should not be afraid to think outside the box and create a management structure tailored to both the needs of the property, and the availability and knowhow of the members. In this post, we will look at three commonly used structures that Boards can consider.

Self-Management + Accounting Firm and Legal Counsel

Condo association accounting (includes bookkeeping, issuing checks, processing maintenance fee payments, producing routine financial statements, maintaining financial records etc.) is one of the most time-consuming and detailed aspects of condominium association management. Chapter 718.111(13) of the Florida Statutes has specific guidelines on how association financials should be maintained and I think it goes without saying that erroneous accounting can create many problems for association Boards. Unless the Board has a member with material accounting experience that is willing to dedicate between 5 and 20 hours per week (depending on property size) completing the duties mentioned above, it is wise to consider hiring an accounting firm familiar with condominium association accounting to handle this aspect of management.

When an association is self-managed, the Board members are left to handle the collection efforts related to delinquent maintenance fees. For smaller, close knit communities, this can create difficulties when Board members have to collect from friends. Further, it is very important that an aggressive and consistently implemented collections policy be established as increases in delinquencies (and subsequent reductions in maintenance fee revenue for the association) can make properly managing the condominium very difficult for the Board. As such, a self-managed association may consider contracting with a condominium association attorney to handle all collection efforts from delinquency letters (can also be handled by an accountant), to lien placement, to foreclosure, to rent garnishment, to eviction. The attorney and accountant will likely work together in handling collection efforts as the attorney will need homeowner financial ledgers from the accountant to prove delinquency. Both vendors should provide routine reports (at least monthly) to the Board outlining the status of collection efforts and the association’s financial position. If a well-formed process is implemented, these two vendors can take a significant burden off of the Board members’ shoulders and allow them to focus their efforts on the many other aspects of condo management.

Self-Management + In-House Administrator

The Board of a self-managed condominium association may feel comfortable handling all of the major aspects of managing their property but may not be able to commit the time necessary to address the daily needs of residents, vendors, prospective buyers, etc. In this case, it may be wise to hire an administrator as an employee of the Association. This administrator could work from an office on the property, if available, or even from their home. The number of hours worked per week and the administrator’s job description can be customized by the Board. Responsibilities would likely include responding to association phone calls and emails, maintaining the association’s records, sending all resident communications on behalf of the Board, coordinating property projects, updating the association’s website, etc. A sample of a job description for condominium association management personnel is provided below.

While a property administrator can be a huge benefit to self-managed condominium Boards, there are many things that need consideration prior to an association hiring an employee for the first time. Here are some of the highlights:

  • Will the employee be salaried or paid hourly?
  • How with the association handle payroll? Will it be completed internally or will a payroll service be utilized?
  • Will the association offer benefits such as health and disability insurance?
  • Is the association obligated to have worker’s compensation insurance and what will it cost?
  • If salaried, how many sick days and paid vacation days will the employee have?
  • During days that the employee is not working, who will handle management of the association? A Board member or perhaps a temp?
  • Which Board member will the employee report to? How frequently will performance reviews occur?
  • Will there be a severance package if the Board terminates the employee?

 In-House Community Association Manager (CAM)

Many condominium association Boards would prefer more control over the daily management of their property than they would have with a professional management company. However, due to a variety of reasons, true self-management is not an option. These Boards may consider hiring a licensed community association manager (CAM) directly as an employee. All of the issues related to hiring an employee discussed above (payroll servicing, employment taxes, benefits, time off/ sick days, etc.) are relevant in this scenario as well. If the Board feels capable of handing these items, an in-house CAM can be the best of both worlds, allowing the Board to directly oversee the management of the community while having a knowledgeable professional dedicated full-time to property.

 

Before hiring an administrator or CAM, it is important to develop a job description to ensure that whoever the Board hires will be able to adequately fill the role. To assist in this effort, I have created a sample job description for a CAM that would handle essentially ALL aspects of managing a condominium including all administrative duties. This should serve as a starting point and should be tailored to your community and the Board’s specific needs.

Community Association Manager Job Description

 Knowledge of the Law and Board Guidance:

  • Maintain strong knowledge of Florida’s Condominium Statutes and advise the Board of Directors (“BOD”) regarding them
  • Participate in all continuing education requested by the BOD
  • Have in depth knowledge of the condominium documents (Declaration, Bylaws, Rules and Regulations) and advise the BOD regarding them
  • Ensure that the Association is operating with the guidelines of the Florida Statutes and the condominium documents at all times

Performance Reviews:

  • Meet weekly with the Board President to discuss the week’s work and the next week’s priorities
  • Meet quarterly with the Board President to discuss performance and improvement opportunities
  • Meet annually with the Board President to discuss year-end performance and compensation increases

Record Maintenance:

  • Keep track and inform the BOD of relevant Association dates including contract expirations, insurance maturities, CD maturities, tax and annual report filing due dates and any other information deemed relevant by the BOD
  • Maintain a property maintenance log
  • Maintain a violations log
  • Maintain an owner and tenant database to include all relevant information including electronic communication consent forms. Consistently work to ensure all information is accurate and contact information is available for every owner/ resident
  • Maintain organized vendor and unit files
  • Ensure that all of the official records of the Association are maintained in accordance with Florida Statutes. Provide official records to unit owners upon request.
  • Maintain the Association’s website to include all relevant property information for owners and residents

Finances (my be handled by an accountant):

  • Complete all bookkeeping duties for the Association’s finances and backup all information appropriately
  • Provide the BOD monthly financial statements. Items to be included will be decided by the BOD.
  • Bring checks to the Association’s bank as necessary
  • Compile Association invoices weekly to be approved by the President of the BOD
  • Cut checks weekly to be signed by the manager and the Treasurer of the BOD
  • Maintain appropriate reserve balances in the Association’s accounts and make recommendations regarding reserve investments
  • Prepare the annual budget for the Association in accordance with Florida Statutes
  • Provide financial statements to the unit owners as required by Florida Statutes

Meetings:

  • Prepare agendas for each BOD meeting and post according to Florida Statutes.
  • Attend all meetings of the BOD and prepare the meeting location appropriately
  • Prepare packets for each BOD meeting. Items to be included will be decided by the BOD
  • Provide management report at each meeting to provide updates on projects, contracts coming up for renewal and any other pertinent information
  • Complete meeting minutes within 5 days of the meeting
  • Prepare all required communications and proxies for residents as required by Florida Statutes

Unit Owner Delinquencies (may be handled by an attorney):

  • Send out delinquency and pre-lien letters as necessary
  • Contact delinquent owners to discuss options including payment plans
  • Advise the BOD on next steps for delinquent units
  • Fulfill estoppels requests and provide accurate delinquent amounts to the Association’s attorney
  • Maintain a log of delinquent units including, but not limited to: owner name, amount owed, status of bank foreclosure case, recommendations on next steps
  • Provide updates to the BOD at monthly meetings

After-Hours Emergencies: Answer all after-hours emergency calls promptly

Property Issues/ Projects/ Contracts:

  • Conduct  daily property walks and address any noted issues
  • Complete thorough weekly property walks and maintain a list of items which need improvement
  • Ensure all contracts are being fulfilled
  • Collect bids for property vendor contracts and projects as directed by the BOD. Meet with each vendor in person and discuss all relevant aspects of the contract/project before providing bids to the BOD
  • Take the lead on all property projects and provide routine updates to the BOD
  • Effectively communicate key issues to the BOD and contact the appropriate Board member when issues arise

Owners & Residents:

  • Handle all resident issues within the guidelines of the various property policies, the condominium documents and the Florida Statutes
  • Ensure all owners are informed of key property events and ensure that communications are timely, thorough, proof read, and utilize a format approved by the Secretary.
  • Ensure all Association policies are being followed
  • Enforce fines for those residents in violation of Association rules
  • Send out property newsletters on a routine basis
  • Maintain working keys for entry into each unit

Association Office (relevant if the CAM will be working from an office on property)

  • Maintain consistent business hours at the Association Office (as decided  by the BOD)
  • Greet all visitors to the Association Office during business hours and address their concerns/ needs within the guidelines of the Association policies, the condominium documents and Florida Statutes
  • Maintain all areas of the Association Office in a neat and organized fashion
  • Ensure there are sufficient office supplies (paper, ink etc.) on hand at all times
  • Ensure Association Office is locked/ secured prior to leaving daily

Rentals (relevant if the Association has title to any units):

  • Address all needs of the Association’s tenants
  • Maintain security deposits in a separate, non-interest bearing account
  • Find new tenants when units are vacant
  • Complete background searches and credit checks on potential tenants
  • Execute leases within the guidelines of the property’s leasing policy

As always, I am available if you have any questions.

Emily

emily@flcondoassociationadvisor.com

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Condominium Self-Management: The Pros and Cons

Posted on June 17, 2013 | 3 Comments

One of the primary goals of this blog is to provide Florida condominium association Boards with the information necessary to properly self-manage their condominium. However, before a Board can make the decision to become self-managed, it is necessary to consider the pros and cons of self-management. As such, I feel it is important to briefly address this topic before providing any additional advice. If you are considering becoming a self-managed condominium association, I also recommend you read my blog post “What does condominium association self-management require?”.

 

Condominium Self-Management Pros:

1.    Financial Savings

Probably the most appealing reason for Boards to self-manage their association is the potential savings created by not having to pay a management company. Depending on the size of your community and the breadth of services offered, a professional management company may cost anywhere from $30,000 – $70,000 per year. This reduction in operating expenses can be put towards needed property repairs, community improvements, reserves, or reduction in maintenance fees, just to name a few.

 2.    Alignment of Interests

With community owners managing the association, the interests of residents and management are completely aligned. When managers have a vested interest (through homeownership) in the property they manage, they are likely to be more committed to the success of the community, be more prudent when spending funds, and take resident comments/ concerns more seriously.

 3.    Elimination of Middleman

With the elimination of a professional management company serving as a middleman between the community’s residents and the association’s Board, there is often more rapid response to, and resolution of, resident concerns. And, as I have mentioned in other posts, timely and detailed communication with residents is the key to a successful association!

4.    Complete Control

This factor needs very little qualification. Professional management companies tend to have control over all aspects of association management including Board meeting agendas, timing of property projects, operating and reserve expenditures, annual budget drafting, etc. Being self-managed allows the Board to have complete control over every aspect of management and, if the Board has specific goals they aim to achieve, the likelihood of doing so increases when self-managed.

 

Condominium Self-Management Cons:

1.    Board Time Commitment

Self-management of a condominium is a very timely venture. The President of the Board should expect this to be a full-time job. On top of handling routine resident issues and meeting with vendors during the day, at least one member of the Board will need to be on call at all times to handle emergencies. The novelty of handling 2am water leaks can wear off fast and many Board members burn out rapidly.

2.    Board Turnover

Condominium association Boards typically see some member turnover annually. This lack of consistent leadership can be very detrimental to the health and functioning of the Association, particularly when a veteran Board member leaves or when new Board members do not work together well. Professional management eliminates this issue as experienced managers can provide advice and guidance to new Board members while keeping the association running smoothly. To help mitigate these issues, the Board members of self-managed associations should be willing to commit to at least one year of service, and a training process for new Board members should be established.

 3.    Lack of Experience

Lack of experience in property management can get many self-managed associations into trouble. Managing a condominium requires not only an understanding of accounting and legal issues, but knowledge of landscaping, building maintenance, annual corporate filings, permits for amenities such as pools or elevators, and much more. Failure to comply with local, state and federal laws, as well as the communities governing documents, can land Board members in hot water and be costly for the association. Board members must dedicate themselves to learning about all of these different topics and should enlist the help of a professional accountant and experienced condominium attorney to provide routine guidance.

 

Lack of Industry Contacts: a Pro and a Con

One factor that you will frequently see on self-management “con” lists is that Board members lack professional contacts. The argument typically goes like this. Unlike professional management companies, which have lists of plumbers, contractors, pool repairmen, etc. that they can use to obtain bids for maintenance projects, Board members usually have to start from scratch in developing a list of vendors that they can rely on. Further, as management companies tend to be involved with numerous properties, they have leverage with their vendors (helping to ensure reasonable pricing and quality work) as the vendors would not want to risk falling out of favor with management companies and losing significant business. While I think there is some merit to this argument, I have a different perspective and, as such, did not want to include this in my list of “cons”.

In my experience, management companies tend to work very closely with a small subset of vendors and though they could use their relationship with these vendors to push for more competitive pricing and guarantees for the condominiums they manage, they tend not to in practice. I believe this is due to a combination of complacency and being overworked. Given this, many vendors learn that they can charge higher prices and their bids will still land in front of condominium Boards for approval. Further, without proper management oversight of each project (which is again a product of managers being stretched too thin), vendors learn that they can get away with mediocre work. I’m certainly not suggesting that all vendors do this, or that those that do have bad intentions. It is very common for vendors who initially did stellar work to slowly (and perhaps unintentionally) let their work product deteriorate somewhat overtime as they become more confident that the Board will continue to use them.

All of this leads to my feeling that Board members’ lack of industry contacts can actually also be a self-management “pro”. With Angie’s List and similar websites flourishing, Board members can easily identify vendors for all types of maintenance projects. With no historical biases, they can objectively assess vendors and begin to create their own preferred vendor list. Further, as most Board members live on the property, they can routinely monitor project progress to determine if they continue to be satisfied with a vendor or if they need to once again obtain competitive bids from other companies.

I hope this overview of self-management pros and cons was helpful. Please feel free to contact me if you have any questions or if you would like to discuss the pros and cons of self-managing your particular property.

Emily

Emily Shaw is a condominium homeowner in Tampa, Florida and a Director of VERA Property Management, a firm providing full-service community association management in the Tampa Bay Area as well as consulting, financial and legal services to all Florida community associations. 

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What does condominium association self-management require?

Posted on June 14, 2013 | 11 Comments

One thing is certain: self-management of a condominium association is no easy task. However, despite what professional management companies and other websites may lead you to believe, it is an achievable one for the right Board of Directors. I’m certainly not suggesting that the decision to shift from professional to self-management should be taken lightly. When considering this, the Board should take the time to discuss the realities of self-management and how Board members will divide responsibility to ensure that the association continues to function properly. Not sure what the realities of self-management are for your community? Feel free to email me and I will gladly discuss with you the specific challenges you are facing.

Each community is different and some are better suited for self-management than others. So, what do you need to successfully self-manage a condominium association? Here are my four absolute musts:

1. Dedicated Board Members

It is impossible to properly self-manage a condominium association without at least two dedicated Board members. Usually, these two Board members will fill the President and Vice-President (or Treasurer) roles. Depending on the size of the community, the President will likely have to be willing to dedicate 15-30 hours/ week handling association issues. The time commitment will likely be greater than that during the first few months of self-management as all of the kinks are worked through. The second dedicated Board member will need to assist the President in handling the daily ins and outs of the association and will also need to serve as back-up in the event the President is unavailable to fill his/ her daily duties. Ideally, these Board members will be retired or will have flexible work schedules in order to meet with vendors and residents during normal business hours.

2. Accounting Experience

One of the most important aspects of condo management is maintaining the financial records of the association. The Florida Condominium Statutes (Chapter 718) have very detailed requirements for record keeping and annual disclosures. The requirements become more sophisticated the larger the association becomes. Further, it will be the responsibility of the Board, among other things, to collect maintenance fees, issue delinquency letters, pay all of the association’s expenses, properly manage the association’s reserves and file the association’s taxes. Given this, it is extremely important that at least one Board member have sufficient accounting experience to maintain the association’s books. QuickBooks is a user friendly and moderately priced accounting system that the Board can use. There are many others available as well. If you do not have anyone on the Board with enough experience to feel comfortable handing the financial records of the association, another option would be to hire a 3rd party (a bookkeeper, accountant, CPA firm, etc.) to handle the financial aspects of the association.

3. An Experienced Lawyer

Without a professional property manager to look to for advice (though in my experience their advice is often incorrect), an experienced condominium lawyer will become the Board’s new best friend. A quality lawyer will be able to handle your collection efforts, answer any questions you have about the FL Statutes or your governing documents (bylaws, declaration, rules & regulations, etc.), review association policies prior to Board implementation, and provide guidance on many of the other issues that are certain to arise.

4. Communication Skills

Last, but certainly not least, there needs to be at least one Board member with solid written communication skills who will be willing to draft emails to the community, send out newsletters, answer resident complaints/ questions, etc. Do not underestimate the importance of this factor. One of the most common complaints I hear is that information is not well communicated to residents. Lack of communication on important issues can create frustration for residents and this often leads to threats of lawsuits or other action when residents are unhappy with a decision that the Board has made. Detailed and timely communication helps to keep residents satisfied which, in turn, makes running the association that much easier.

If your Board meets the above four criteria, then you are likely well poised to self-manage your condominium association. As always, I am available via email to discuss any questions or comments you have.

 

Emily

emily@flcondoassociationadvisor.com

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