HOA Musings, Ramblings and Info

Community Management: Myths Dispelled



There are quite a few myths and misconceptions about community management that we must dispel. If your association is larger than a handful of units, there is a better than average chance that your community is managed by a community management company.  Some of the frustrations faced by owners and board members in associations are based on the lack of understanding of the role and functions of the management company.

The first thing to understand is that the management company serves the entire community.  Community managers do not work for you as an individual owner merely because you pay assessments that eventually “pay their salary.”  Their duty is owed to the community at large, not any particular owner and their actions are directed by the association’s board of directors or governing body.

The management company is hired by the board of directors to assist the volunteer board members in accomplishing most of the day-to-day tasks necessary to keep the association running.  Tasks include collecting assessments, paying bills, taking phone calls from residents, coordinating vendors, obtaining bids, taking minutes and a variety of other functions as outlined in the contract.  While the board of directors makes the major policy decisions for the association and directs the management company to carry out its decisions, the manager is essentially responsible for running most aspects of the association.  It behooves any board of directors to choose a management company it can trust and to establish a great working relationship with the individual manager working with their association.

Many owners are under the mistaken belief that the management company sets the amount of assessments and is responsible for all increases.  This is simply not true.  Most management companies will work with the board to create a budget for each year which includes the projected expenses for the upcoming year as well as the projected amount to be placed in the association’s reserve accounts (in conjunction with the association’s reserve study analyst).  These figures must be reviewed by the board of directors as well as any finance committee commissioned by the board to assist in this regard.  Once reviewed, the figures must be finalized by the board and the final budget and assessment amounts established for the upcoming year.  The final decision on the budget lies with the board, however, and not the management company or any committee.

This is also true for expenses.  Some expenses are paid in the ordinary course of business by the management company for the association.  These may include utility expenses, expenses which do not exceed a predetermined amount (e.g. $500), recurring bills, etc.  Other expenses must be approved by the board prior to a check being issued.  The management company will draw all checks for the board president and/or secretary to sign and may bring these checks (along with the backup statement or bill received) to a board meeting for review and approval by the board.  Once the appropriate check has been signed, the management company will pay the bill in a timely manner.

While management companies are responsible for most of the day-to-day financial aspects of the association, they also serve another equally important function.  Because most association boards of directors are volunteer owners who work full time, the management company serves as the point of contact between the board and the owners within the community.  If owners have concerns, complaints or questions or wish to report a violation, the management company is the entity with whom they deal directly.  The manager will take this information, compile it into a useable fashion and present it for consideration to the board at the next meeting.  It is important, therefore, that board members review their board packets and be prepared to make decisions at each board meeting.

The community manager may also take action on the information or communication received from owners.  For example, if a homeowner calls and informs the manager that there is an irrigation leak within the association, the manager will contact the association’s landscaper and request the appropriate repairs.  Similarly, if a water leak is found in the common area, the manager will contact the appropriate vendor to obtain emergency service to hopefully prevent additional damage to the association.

While these are some of the functions of the community manager, there are too many to mention here.  Ultimately, however, the manager is a conduit between the members and the association’s board of directors.  While the manager carries out the directives of the board of directors, the manager does not make the decisions with which you might disagree.  If you are upset with your board, take it up at a board meeting, don’t take it out on your community manager!  Your community manager is hired to help the community – let them!

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