Condo Association Management Blog

WIthout knowing what state you are in, I can only answer in general. Typically, documents require that the board of directors manage and administer the affairs of the community. 
 
Community documents usually have 3 or more parts. The first part is typically the Master Deed or the Conditions, Covenants and Restrictions. The second part is usually the by-laws, or the agreed "rules" that the Association (as a legal entity) will operate under. The third is typically your Articles of Incorporation or similarly named section that is the legal creation of the entity which is the Association. 
 
Typically, the bylaaws will state how the board is elected, what the responsibilities of the board are, if the organization may or has to hire a management agent, how the budget is created, how monies are assessed and collected and other such functions of the Association. 
 
Check your documents to see if those that are delinquent are allowed to vote and if that lowers your quorum requirement. The typical language is that the owner must be a member in good standing to vote and to be a member in good standing you must be current on your fees. Often, the number of delinquents will lower the quorum requirement. 
 
Teh best defense to your argument is your documents. If the documents state that the board "shall manage and administer the affairs of the association" then there is no choice; that is a a board responsibility. They can hire a management company to help. The role of the management company is to offer advice, perform day to day operations and functions as designated by the board and to carry out the directives of the board. However, the decisions should be made by the board and documented in board of director meeting minutes. 
 
Good luck!

The board is ALWAYS necessary to facilitate financial transactions and ensure that items such as reserve funds are maintained in a proper fashion. Using a property management service is a smart idea as they have the resources and are trained to handle the accounting and physical maintenance of your association. You still need a board of directors though that actually MAKES the decisions. An analogy would be that you hire an attorney who understands the law for a specific court case, but that attorney ultimately relies on you to make the decision. Good Luck, and encourage homeowners to take an interest in your association. It will only improve with homeowner participation.

Thanks for these answers. 
 
I live in Pennsylvania and I looked in our by-laws we are waiting for the president to give us another set of the by-laws (which could take days) as she is very slow at following thru with what she says she is going to do. I am believing the management company that I seeked out and also I cannot find in the former by-laws whether deliquent people can vote. My guess is they can't, but until I see in in OUR by-laws who knows what they can and cannot do. 
 
Please don't get me wrong I want a management service, I just don't feel comfortable with going with the one she chose and the one she wants everyone to vote for. Everything I have searched on says WE do need at least a President, Sec. and Treasurer to over see the management service, and to be forced to vote on something I do not want to go with is the biggest problem for I am sure the majority is going to go with her service she chose because the said they will handle everything and to the closet people that sounds good for I would say 10 out of the 15 do not like to get involved with anything around here. Again thank you and I do think I will be taking money from my own savings account and seeking out a lawyer before May 2. Thanks again

Following Joe Schuirmann's comments above your HOA is in all likelihood incorporated. The documents will bear this out. If so your association is a corporation and must be operated according to the bylaws. You probably received these, as well as the other governing documents when you purchased your home. Don't wait for the ex-president to get them for you; look in your files. Most owners file them away and never look at them again, until there is a problem like the one you are describing. 
 
 
 
As a corporation you must be organized according to your by laws which state that a board of directors needs to be elected from among the owners. The board must manage the affairs of the corporation. No one else can fill this role. It cannot be delegated. The board can choose to hire a management company to handle the day to day affairs such as collecting assessments and paying bills, fixing the roof, etc. The management company cannot take the place of the board, ever.  
 
 
 
Organize the owners and have an election. Get elected to the board and start organizing the affairs. It sounds like one of your first orders of business is to interview and hire a management company. Be aware that all of the association's service providers such as the gardener, the attorney or managment agent serve at the pleasure and under the direction of the board of directors. I hope this has been helpful.

My husband and I are renting a Condo. We have been for almost 10 months. Once we moved in, we were promised that the garage door would be replaced. The garage door is smashed in and is very hard to open and parts are continuing to fall off. I brought this to the attention of the owner and he suggested that we sign another lease. However, we are still in the lease until August. The big question is...Can the owner make us sign another lease to live here longer in order to replace the garage?

Dear Marc  
 
 
 
Yes I do have a copy of my own set of by-laws, It does not say in there that you don't need a board if you go with a management service. But the Pa. by-laws does. It has been 3 days since she told us she made copies of the by-laws and she left them on her desk at work (DUH!) I want to wait until I get them from her and see if it says in her copy about management. I received a very nice email from another source whom says exactly what you people are telling me which is YES we still need a board. I am taking all of my info to the meeting and I will ask this management Service whom she aquired to talk with us and I will ask them WHY they are telling her we do not need a board. May 2 is our meeting so I must wait until then. If they give me a good answer I will consider going with them, but I will want everything in writing. 
 
There are 2 people here that seem to think I ask to much and that just gets me upset when others just go along with the flow and then when it comes to getting caught with their pants down they are cry babies. I protect myself and my investment and they will not pull the wool over my eyes. 
 
I will be running for pres. and I am sure I can get 2 others to help me and if the majority of us do not like management then we will rebuild our association. I would much rather do that now and put the money we would pay management service in our own pockets, but I think right now management will get us back on track with our finances and go after the ones that are behind and get some of our money back from them. That is my plan and I am sure management will be good for that reason. I am going to wait and see what this next meeting un-folds. Thank you  
 
for being there with your answers. 
 
 
 
slr

My husband is president of our condo association and I am the secretary. I would LOVE to have your problem of only $3000 as your balance. 
 
We were having problems getting dues from all the homeowners about 2 years ago so we turned over the management of the association to a property management company. We stayed on as the board to answer questions and make decisions. 
 
Now 2 years later we are taking BACK management ourselves and firing the property management company because the association is $5000 IN DEBT. The prop mgmt co said that they couldn't send anyone to collections because they needed money to set up a collection account. Then when we gathered that money they said, "Oh, nevermind, sorry we didn't see that we already charged you for a collection account a year ago. But, it takes more money to actually send someone to collections and you don't have it." 
 
Last summer they paid $1200 to have all the doors repainted on the units and lines painted in the dirt parking lot in the back (???!!!???). They never consulted us the board on this decision. So then I started talking with the company a few times a week trying to get a handle on our financial affairs and suddenly they are telling me we are broke.  
 
Well, if we're broke, why are we paying for painting lines in a dirt parking lot??? 
 
I tried to work with her to get money from all the homeowners for the last 6 months and just last week she informed me that our association is $5000 in debt so that even if we get the money from the homeowners who are past due, we will still be in debt. 
 
Why? Why did she spend money we didn't have? She hired a landscaping company that cost HALF of our monthly dues every month to pay. And the lawns look HORRIBLE. 
 
So, yeah, you need a board to oversee the association, even if you have a company handling it for you. 
 
Good luck to you in this!

In Illinois, a Board is required whether the association is incorporated or not. The filing of the governing documents (Declaration & By-Laws) establishes the association, not the incorporation, which may or may not be done. 
 
Owners often get into trouble when they allow a property management company to run their association without any Board oversight. Not only are you legally required to have a Board to direct the operation of the association, it's in the owners best interests to have owners with a financial investment in the property making the decisions. 
 
I've found many property managers come from real estate backgrounds and don't necessarily have extensive knowledge of condominium law. It is the Board's fiduciary duty, legally, to look out for the best interests of the association. This includes getting educated about their own governing documents as well as state condo law and overseeing any professionals they employ to help them manage the association.

You'd be absolutely insane to believe that any management company will handle everything. We've been through three in 5 yrs - each has done something that required hardcore oversight of them. Key is to clearly differentiate which duties the BOD will do and the Mang will do. But never ever given over total control of your monies without BOD oversight.

A HOA in most cases require a BOD to insure the interest of the community, fiduciary responsibities and over all interest and investment of the community is maintain to the highest standard. A PM company is there to faciliate, monitor, plan and maintain the day to day operation. We are engineer's and have solid background in construction and maintenance of a community and associate cost.  
 
Good Luck and e-mail us if you need additional help.

Thank you John 
 
 
 
I spoke with a manager today and rest assured we are going to go with them I am sure of that. Now I will know where my money goes and who is taking care of the problems. This should have been done 3 years ago. We have 1 more meeting to vote on and the manager will be there to speak in our be-half. I hope this solves our problems, we will let the professionals take care of it. thanks again everyone for your answers. The bottom line is YES you still need a BOD for your association so don't let anyone tell you different.

In response to owners not paying fees we the HOA place a lein on the properdy and offer them a payment plan.

I find this log very interesting. 
 
I have been on the Board of Directors of my large condo association (184 units) for 6 months. It has taken me this long to get up to speed on procedures and to be able to read the various documents such as financial statements, delinquency report, proposals from committees, contracts and other documents. This building has gone through several management companies over the years and I believe even a lawsuit. 
 
I can tell you from personal experience, while it might seem like an easy fix hand it all over to a management company they DO and WILL make mistakes. This is just one reason that it is imperative to have a BOD.  
 
The BOD guides Mgmt to act on their behalf and also speaks for the population of the building. 
 
The Mgmt company should prepare monthly BOD packets with the various reports mentioned above as well as help to prepare an annual budget. Part of the preparation for the budget is to get a reserve study that will tell you the condition of your building and what systems may need to be replaced, upgraded or repaired over the next 5 years. 
 
As for your condo fees, collection should never be ignored. I am sure in your bylaws the collection guidelines are outlined. For us 30 dates late = notice and late fee of $25, after 60 another late fee and a stronger notice, after 90 legal notice of peending foreclosure. The longer you wait to collect fees the harder it is to collect and harder for the owner to come up with the required funds. It is easier for someone to come up with $1,000 than it is pay off $10,000. The Mgmt should handle the collection of the monthly fees. 
 
Whenever we consider a contract whether it's landscaping, trash removal or maintenance we require 3 bids. I suggest you do the same with hiring a Mgmt co. Our first step it to prepare an RFP (request for proposal) this outlines our expectations of the service so when we receive bids we can compare apples to apples. 
 
Lastly, do not expect a Mgmt co to be the answer to your condo association's problems. An active BOD and members of the community are key.

I just happened onto this discussion. I am president of a unique condo association. We have eight units, all free standing houses. We are in the process of terminating a contract with a management company for some of the reasons cited. A management company doesn't do it all...at least the one we hired. In fact, they often don't do the things we ask, which means that someone on the Board has to follow along behind them doing "clean up". I have, however, another problem. Only two or three of the eight co-owners are willing to serve on the Board. I have taken on the job mostly because I care about my investment. I have two other Board members who do what they can to the best of their ability and as time from their full time employment permits. So, if you hire a management company, have a serious talk with them about their process for carrying out the instructions of the Board. And then, don't always believe that they'll do what they say they will.