Many state condo laws exempt smaller associations from the requirement to employ management companies. Rieview yiour Florida law to check any such in your case. It is very practical for a smaller association such as yours to purchase on line financuial support to take care of your paroll, bill paying ,condo fee collections etc.
no, it says that we may use a management company. My HOA doesn't use one and never has, i basically run it. Its a real pain but most of the time its easy. Just getting everyone to follow the rules is hard because nobody reads their condo documents and doesn't know what they are; so i'm always the bad guy.
There are several Florida based attorneys that are actively involved in discussions on Linkedin. You may want to contact them if you are seeking a legal opinion.
From a purely business standpoint (I am not an attorney and cannot express a legal opinion on this matter), the property management company concept is a broken business model. Many PM companies do a fine job for their HOAs with regard to actual property management, but their model collapses when they insist upon maintaining your financial records. PMs are not accountants by either training or inclination. As a result, they use "canned" software packages to produce monthly financial reports which often fail to provide the board with the information they really need in order to make timely and accurate decisions regarding their HOA. I have encountered numerous challenges with PMs complying with the guidelines of our approved budget, i.e., they spend money for nonemergency matters that we have not included in the budget.
If you elect the self management route, you will need the services of a good bookkeeper to pay your bills and maintain basic accounting records. If you do not have a board member with financial expertise, you may need to engage someone who does to prepare your monthly reporting package and provide the board with feedback as to where there are issues that must be addressed.
Regardless of size, whenever a association chooses to pay a person or entity to manage their community, they must be licensed. There is no requirement to have professional managment if the association chooses to do it themselves on a volunteer basis.
Self-management was the way HOA's were originally intended to run. The outside management concept arose because running a property is not easy, and requires a lot of time and expertise.
Don't underestimate all the things that a management company does on your behalf, (the property). Having said that, I most certainly agree with L. David's comment that the management model is a broken one, but for reasons other than simply inept book keeping.
With a small project, it shouldn't be too difficult to manage yourselves. Just be sure to follow the rules meticulously, and you should be fine!
From my perspective, most PMs do a good job of managing the physical aspects of HOAs, but do a terrible job of accounting. This is understandable in that they have neither the training nor the inclinaion to be accountants. If they were smart, they would exit the bookkeeping business and focus on their core strengths.
The self management model that I like is when a board hires a company to manage and maintain their property, and then hires a professional bookkeeping service to pay bills and produce basic financial reports. I agree with previous points made here in that managing a property is complex, and you need someone knowledgeable in these matters to handle them for you.
In Florida 11 units do not require a pm. The Board can manage the property. I suggest you have a good cpa and you are good.
Teresa, I am a CPA, and a CPA is not necessarily the right person to manage your condo's finances. If you self manage, you need three accounting type services: 1) a good bookkeeper to pay your bills monthly, 2) a professional accountant who is knowledgeable about HOA finances to review your monthly financial results so that s/he can provide feedback to the board on financial trends, and 3) a competent tax professional, again knowledgeable in HOA tax laws, to prepare your federal and state income tax returns annually.
Here is a quick checklist of what the board should accomplish each month as their duties relate to HOA finances:
1. Ensure that money is disbursed from the correct account, i.e., don't pay operating expenses from the reserve account and vice versa
2. Review the bank reconciliations for both accounts. Investigate any items that have been outstanding for more than one month.
3. Compare actual results with your budget to determine if there are any unusual differences that should be investigated.
4. Avoid the use of "miscellaneous" accounts except for the smallest of expenses.
5. Review each owner's payment history, and follow up with any owner who is delinquent in payment of their fees.
6. Does your HOA generate income other than owners' fees, i.e., laundry room, rental of common area property, facilities usage, etc.? If so, have you collected the correct amount of money from these sources?
7. Did you remember to transfer from your operating account your approved monthly contribution to your reserve account?
a well qualified,licensed and insured management company, such as we employ in my large condo in Maryland, is able to provide every service their customers wish. Those customers are the Boards of Directors of the properties who hired them to provide these services.