Part of what makes condo living so attractive is the convenience and the perks. But this doesn’t happen by accident. All condo buildings are managed by an organized body known as the condo association, and the association is largely responsible for the success of the community.
A condo 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 governing documents (bylaws and CC&Rs).
Members will elect a group of people, often 5 to 7 members, to govern and lead the association. The governing documents spell out the duties and obligations of the association’s board members, and the onus is on each board member to familiarize themselves with these document.
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The 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 platform like Condo Control. This software streamlines operations and makes it easier for teams to manage all the different aspects of a running a condo.
Even with these convenient solutions, board members still have to be diligent and ensure that the property is being managed in a way that promotes harmony, sustainability, and growth.
Use these guides to help you manage all aspects of your condo successfully:
Once the condo association has elected a board, its structure should be as follows:
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 their duties.
Secretary: Besides recording votes and keeping minutes, the secretary must notify owners and tenants about upcoming meetings. They must also ensure that the association’s documents are accurate and up to date.
Treasurer: This board member manages the monetary side of things. This involves disbursing and receiving funds on behalf of the condo association. Although the treasurer is the main signatory for signing checks, they cannot make decisions alone. The president will be a co-signor with them.
The treasurer has the added responsibility of preparing the annual income and expenditure statement as well as the association’s annual budget.
In order to truly understand how your condo association works, you must understand the responsibilities of the board. Generally speaking, the condo board will take on following responsibilities:
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. One example is planning for building repairs. Most condo boards set long-term and short-term goals. Short-term goals typically last for about one year, while long-term goals could spam 5 to 10 years.
The board has the added responsibility to set performance goals related to the community’s financial and fiduciary prospects.
The board must establish and enforce bylaws. These bylaws help all members understand how to use the property. It’s important for everyone to read and understand the bylaws. That way, parties can hold each other accountable to them.
The board is responsible for creating and managing the association budget. Most associations have an in-house accountant to help with this responsibility. Those without an internal accountant usually seek outside help from a professional.
Here are some of the most important aspects of a condo budget:
The association’s accountant must also plan for monthly assessments or condo fees. However, it’s the 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 owners the trouble of paying special assessments.
The condo association’s CC&Rs give the board a responsibility to repair and maintain common areas. These areas are shared between owners and include things like:
A condo community cannot survive without collecting monthly condo fees, which are also referred to as 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.
Every month, unit owners pay a fee to cover maintenance costs. The condo board must put away a portion of this money into a reserve fund. This is an emergency fund that covers unexpected costs such as liability lawsuits, accidents, storm damage and other forms of accidental damage. Some condo associations collect money for this account separately.
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.
One of the first documents you’ll receive when you purchase a condo is a copy of the association’s CC&Rs. 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 them.
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, and if that’s the case, it’s practically impossible to challenge them.
When a condominium is new, there will be a period of time where the developer is responsible for managing the community. But once a certain amount of units are sold, the developer hands over control of the association to the unit owners, who must elect a board of directors. Election are generally held on an annual basis and all unit owners must be informed of the process so they can participate in the voting process.
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 too many other responsibilities to fully commit to the role. You also have the right to hold whoever is in office accountable at all times.
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.
