Community association management — a lot of people come across this term but don’t quite understand what it means and what it entails. If you want to find out, keep on reading.
What Is Community Association Management?
Community association management is the process of overseeing and governing a community association and its operations. Community associations can come in many forms, including homeowners associations and condo associations. Typically, a set of governing documents dictates how a community must be managed. This includes stipulations on how much to charge in association dues, what obligations homeowners have, and what authorities the community association possesses.
Additionally, many states have enacted their own laws that govern community associations. North Carolina, for instance, has the North Carolina Planned Community Act as well as the North Carolina Condominium Act. California, on the other hand, has the Davis-Stirling Common Interest Development Act.
Aside from community association-specific laws, there are also corporation laws that broadly apply to these organizations. In a lot of states, community associations are formed and recognized as corporations and must, therefore, abide by the corporation acts that govern them. To use the two states above as examples, these include the North Carolina Nonprofit Corporation Act and the California Corporations Code.
Frequently Asked Questions About Community Association Management
What Does Community Association Management Involve?
Managing a community involves performing numerous tasks that facilitate the smooth operations of the association. These tasks include but are not necessarily limited to:
- Preparing the annual budget
- Calculating and collecting association dues
- Maintaining the association’s reserve fund (if applicable)
- Preparing and presenting financial reports to the membership
- Enforcing the covenants and rules of the association
- Reviewing and amending the governing documents
- Holding board meetings and annual membership meetings
- Signing off on projects and initiatives
- Soliciting bids as well as hiring vendors and contractors to complete various jobs
- Managing payables
- Conduct frequent inspections of the community’s common areas and elements
- Maintaining the common areas of the community
- Ensuring repairs for any damaged common areas
- Communicate with homeowners, including sending out notices and making announcements
- Tracking maintenance requests
- Purchasing and updating insurance policies for the association
- Planning and executing community events
- Ensuring the association remains in compliance with changing laws
Tasks generally depend on a few factors, including the type of community association, the extent and nature of its common areas or amenities, and the size of its membership. Smaller communities with only a handful of common spaces to maintain typically don’t require as much work as larger ones with more comprehensive facilities.
Who Is Responsible for Community Association Management?
Community associations are generally managed by a set of board members collectively known as an HOA or condo board. Typically, board members fulfill different roles, such as a president, vice president, secretary, and treasurer. These board members are responsible for maintaining the community, i.e. fulfilling all of the duties listed above. More often than not, board members receive their designation by running for open seats and getting elected into office. Board members are volunteers, which means they are not paid and must still pay association dues like everyone else.
Because there are only a select number of board members and countless responsibilities to juggle, associations also typically set up committees. Committees are formed either perpetually or on an ad hoc basis. Each committee performs a specific function. For example, an Architectural Control Committee reviews requests for architectural changes and enforces the community’s architectural standards. A social committee, on the other hand, is tasked with planning events and functions as well as welcoming new homeowners into the community.
Many community associations also seek professional help in the form of a community association manager or management company. Professional managers essentially assume most of the responsibilities of board members. These include dues collection, homeowner communication, service request tracking, vendor management, and other duties listed above. Managers or management companies can also provide assistance with tax filings and legal matters as well as advise the board on decisions.
Do Community Association Managers Need a License?
It depends on the state you live in. Currently, eight states and the District of Columbia require managers to carry a community association management license. These are Alaska, California, Connecticut, Florida, Georgia, Illinois, Nevada, and Virginia. There are different certifications as well, such as Professional Community Association Manager (PCAM) and Accredited Association Management Company (AAMC).
How Much Do Professional Community Association Management Services Cost?
The cost of hiring a community association management company can vary depending on a few factors. These include the size of the community, the location of the community, the cost of living in the area, and the nature of a community’s amenities. The company you ultimately choose can also have an effect, as companies can charge different rates. On average, though, associations can expect to pay somewhere between $10 to $20 per unit every month.
Are Community Association Managers on the Board of an HOA?
No, community association managers are generally not part of the HOA or condo board. They are a separate entity whose role is to make the job of board members easier by shouldering most of the burden of community management. Managers should not make important decisions for the community. They can merely advise board members, who reserve the ability to make a final decision.
Do All Communities Need a Manager?
Community associations come in different shapes and forms. Whether or not an association needs the help of a professional manager will depend on its unique situation. There are many communities that get by just fine with self-management. But then, there are also many that require expert assistance.
Generally, hiring a manager is the best option if the HOA or condo board is inexperienced. Community management demands a certain level of skill and expertise, particularly when it comes to accounting and financial management. As such, if there is no one on the board who is well-versed in this field, it is a good idea to hire a manager. Many boards also lack sufficient time to manage the community. After all, board members are just volunteers who have their own personal responsibilities to deal with.
Community Association Management Made Easy
As you can see, community association management is not something all boards can accomplish alone. If hiring a professional manager or company is not in the cards, consider investing in management software instead. A community management software can automate many tasks and generally make the job easier. The software also comes with built-in tracking capabilities, allowing for more seamless and accurate reporting.
If you need reliable management software, look to Condo Manager. Call us today at 800-626-1267 or contact us online for a free demo.
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