Part of what makes condo living so attractive is the fact that you’re moving into a well-managed and connected community. But, this doesn’t happen by accident. Successful condo buildings and complexes are managed by an organized body known as the condo association.
What is the condo association?
This association is an organization with a responsibility to ensure that the community operates according to the agreed-upon rules and regulations. These are usually contained in the association’s bylaws and C&R documents. It’s important to note that these documents outline the duties and obligations of the association board, and the onus is on each board member to familiarize themselves with this document.
The condo association board may decide to hire a condo management company to handle the property’s day-to-day operations. This includes things like managing administrative functions, interviewing prospective tenants or owners and taking care of security concerns. Alternatively, the board might decide to use condo management software that saves time and money. A good example of this would be a service like Condo Control Central. This software allows you to streamline and manage all the different aspects of a condo community from a central, digitized platform.
Even with these convenient solutions, the buck stops with the association board, and they must ensure that the property is being managed in a way that promotes harmony, sustainability, and growth.
Condo association guides
Guides to help you manage all aspects of your condo successfully:
- Guide 1: Differences between a Condo & Homeowners Association
- Guide 2: Condo association reserve fund guidelines
- Guide 3: Condo fees and how to reduce it
- Guide 4: Condo association rules and regulations
- Guide 5: What you need to know about condo association insurance
- Guide 6: Benefits of using a condo management software
- Guide 7: How to get quorum on the first attempt with online proxy voting
- Guide 8: Creating a condo website and how to properly market it
- Guide 9: How to reduce Condo/HOA management costs
Condo association board structure
Once the condo association has elected a board, its structure should be as follows:
- Vice president
- General member
President: The president is in charge of contract signing, handling daily operations and presiding over meetings. They must follow up on board resolutions to make sure they’re well-executed.
Vice president: The vice president is there to step into the President’s role whenever the former is unavailable to fulfill his/her duties.
Secretary: Besides recording votes and keeping minutes, the secretary must notify homeowners and tenants about upcoming meetings. He/she must also ensure that the association’s documents are accurate and up to date.
Treasury: This board member manages the monetary side of things. This involves disbursing and receiving funds on behalf of the condo association. Although the Treasury is the main signatory for signing checks, he cannot make decisions alone. The President will be a co-signor with him. The treasurer has the added responsibility of preparing the annual income and expenditure statement as well as the association’s annual budget.
Responsibilities of the board
In order to truly understand how your condo association works, you must understand the responsibilities of the board. That’s because the board is the one managing and governing the property at large. Depending on state and provincial regulations, the condo association board has the following responsibilities:
- Hiring and firing personnel
- Maintenance of the common areas
- Buying insurance cover
- Appoint committees
- Attend board meetings
- Keep updated corporate records
- Apply violation penalties
- Liaise with residents regularly
- Establish reliable fiscal policies
- Make litigation-related decisions
As with any organization that wants to achieve long-term success, the condo association must plan for the future. This helps to prepare the condo community for inevitable changes that will affect the value of the assets within; like planning for building repairs. Most condo association boards set long term and short-term goals. Short-term goals typically last for about one year, while long-term goals could take into account a 5 to 10-year time frame.
The association board has the added responsibility to set performance goals related to the community’s financial and fiduciary prospects.
The board must establish and enforce the condo association bylaws. These bylaws serve as guidelines that the board should use to manage the property. It’s important for all board members and unit owners to fully understand what’s contained within the association bylaws. That way, both parties can hold each other accountable to them.
The association board is there to create and manage the association budget. Most associations have an in-house accountant within the board. Those without an internal accountant usually seek outside help.
Here are some of the most important aspects of a condo association budget:
- Insurance costs
- Expense estimates
- Landscaping costs
- Maintenance costs
- Garbage removal costs
The association’s accountant must also plan for monthly homeowner’s assessments or condo fees. However, it’s the entire association board’s responsibility to ensure that the association has enough funds reserved for a rainy day. This amount will come in handy in times of emergencies, such as unexpected repair costs or massive damage caused by extreme weather conditions. Maintaining a healthy reserve account will also save homeowners the trouble of paying special assessments.
The condo association’s CC&R document gives the board a responsibility to repair and maintain common areas. These areas are open and available to all homeowners and include things like:
- Parking facilities
- Tennis courts
- Swimming pool
- Open land/ recreational park
- Building exteriors
Condo fee collections
A condo community cannot survive without collecting monthly condo fees, which are also referred to as homeowner assessments. It’s not enough to inform unit owners of their responsibility to pay assessments. The board must devise a strategy to ensure that tenants and unit owners pay the amount on time every month. That way, the board can maintain consistent cash flow to pay for operational expenses, maintenance costs, insurance, etc.
Professionalism is by far the most important quality for any condo association board. All members of the board should hold themselves accountable to a high standard of professional decorum. This includes ensuring adequate planning for the future, maintaining healthy reserves, taking care of maintenance tasks on time and keeping unit owners happy through the smooth resolution of any conflicts.
All of this requires an organized board with proper systems in place. If just one of these aspects is out of place, the board could easily find itself in an adverse condition.
Covenants, conditions, and restrictions
One of the first documents you’ll receive when you purchase a condo is a copy of the association’s CC&R’s. But it’s advisable that you ask for this document before you sign on the dotted line. This is to make sure you’re comfortable with the rules contained within.
For instance, it’s not a good idea for an animal lover to move into a community that doesn’t allow you to keep pets, or is otherwise restrictive with the type of species you’re allowed to keep. Remember that some rules in this document are determined by state and local laws so it’s practically impossible to challenge them.
The condominium association is managed by a board of directors, which is established by the property developer. Once all the units are sold, the developer hands over control of the association to the unit owners, who must elect a new board of directors. The association board is elected on an annual basis and all unit owners must be duly informed of the process so they can participate in the elections.
As a condo owner, you have a right to vote for your preferred candidate during board member elections. Make sure to put each candidate through a strict vetting process that includes accountability, responsibility, and a good track record. After all, you want someone who will represent your interests correctly instead of a friend and neighbor who may be enthusiastic about the community but burdened with other responsibilities to fully commit to the role. You also have the right to hold whoever is in office accountable at all times.
Every month, unit owners pay a fee to cover maintenance costs. The condo association board must put away a portion of this money into a “reserve account”. Some condo associations collect the reserve account fee separately annually. This is an emergency fund that covers unexpected costs such as liability lawsuits, accidents, storm damage and other forms of accidental damage.
Condo management companies
Managing a condo community is a lot of work and sometimes it can be too much for the volunteer members of the board. After all, they’re just regular people with their own lives and commitments. That’s why it’s so common for condo boards to hire condo management companies.
In such instances, it becomes the management company’s responsibility to hire maintenance service providers. The management company must attend board meetings because they report to the board.
Buying property in a condo complex or building means you must abide by certain rules and regulations. These rules are established and enforced by the condo association, an organization that’s responsible for managing the condo community. This is a huge responsibility; because it involves making sure that the value of the individual assets appreciates over time in tandem with the development of the surrounding community.
If you’re thinking of moving into a condo community, we hope this article has been helpful to you. At least now you know how a condo association works and what to expect from it.
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