What is the Difference between a Homeowners Association Board of Directors and a Property Management Group?
Property management and association by-laws are important aspects of community associations. The care provided through general management, maintenance, and conflict resolution ensures that property values within a community increase. In a condo association, there are different people that might be involved in the maintenance of the association. As such, it’s easy for property owners to confuse the duties of a board member with that of an association manager. Here’s what makes a condominium board different from a property management company.
Understanding the Community Association
All condominium owners automatically become members of the association when they purchase a unit. The purpose of a condo association or a homeowners association is to harmoniously distribute the responsibility of common elements shared by the entire community, including neighborhood playgrounds, clubhouses, walkways, pools, gyms, and landscaping. Condo associations have additional responsibilities because owners also share hallways, walls, parking lots, and roofs. The association is headed by a board of directors whose members are volunteers who may live in the community and pay assessments just like every other owner in the association.
The board is democratically elected to represent the interests of the unit owners and maintain the common areas as well as handle administrative tasks. Board members meet routinely to discuss and vote on an array of topics affecting the community.
Typical responsibilities of the Board of Directors include:
- developing and enforcing rules and regulations
- hiring and working with a property management company
- preparing a community budget for monthly dues
- obtaining insurance coverage for the common areas
- maintaining common areas such as swimming pools and playgrounds
- collecting and managing association fees
- handling legal affairs
- choosing and hiring contractors and other service people
The Board members do not physically perform all this work. They hire maintenance crews, a janitorial staff, and/or security personnel. In most cases, they also work with property managers to help them oversee all of the work.
The Role of a Property Management Company in an Association
Running a condo association can be quite a lot of work, especially in a condo association with hundreds of units. Since board members are volunteers with other professional and familial obligations, they may not be able to handle all the management tasks for the property. For this reason, many boards delegate some of their duties to the property management company they hire. In essence, property management companies work for condo and homeowners associations and their members and help with administrative tasks. The major roles of the management company are to collect association payments, process vendor payments, prepare the monthly financial report, direct the activities involving the maintenance of common areas, and act as a liaison between individual owners and the board of directors. Other responsibilities include:
- overseeing work done by contractors and service people
- communicating with tenants and homeowners about fees, regulations, and other important community matters and changes
- enforcing the association’s rules and regulations
- sending out violation and collection letters
- handling emergency situations presented by tenants and homeowners
Every administrative task handled by the property management company is merely on behalf of the board of directors of the condo association or homeowners association. Homeowners may mistakenly think property managers create the rules or fine schedules. In fact, their work is simply enforcing the rules set by the association’s governing documents. Property managers also act as advisors to associations, especially when it comes to budgeting. Though the board of directors may ask for the property managers’ opinion or feedback when creating policies, the company cannot create rules or determine the consequences if rules are violated. Additionally, property managers can assist condo associations in maintaining the common areas by ensuring all recommended maintenance vendors are bonded and insured. They are a great asset for any condo association, but they cannot assume the responsibility for the board’s job.
As you can see, the function and scope of the board of directors and property management companies are quite different, despite the fact that they work closely together to manage a community or property. Understanding this difference can help you determine what kind of management situation would be the best fit for your needs.