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
- 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
- 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
- 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.