To say that condominium and homeowner association living is a big part of the Florida lifestyle would be a massive understatement. Condo living offers the freedom that not only retirees are looking for but also couples who travel a great deal and may also have second homes.
Most of the time it requires nothing more than to pay your association fees, lock your door and move on. However, these associations must be managed by someone, and the question becomes should they be managed by a professional management company or should they be self-managed?
If you’re thinking about making a purchase of a condo or homeowner association property, one of the first questions you should ask is who is the manager. By Florida Statute, the Community Association Management Act, professional association managers must be licensed. A community association is defined as an association that has 10 or more units or has an annual budget greater than $100,000.
Management companies work under the direction of the board of directors of the association and assess a fee based on services they are performing for the association. Typically, these services include recommending, hiring and reviewing contracts for outside vendors to perform maintenance work, landscaping and special projects for the association. Through a bank or other financial institution, they collect association fees and prepare monthly and annual financial statements and budgets in conjunction with the board of directors. They also can review applications from potential owners and tenants and advise on insurance.
But perhaps the most important thing that professional managers do is to explain the Florida condominium laws related to reserves, building codes and other obscure financial and building issues. All of this relieves the board of directors and other residents from the time necessary to perform these duties.
That said, many homeowner associations still want to self-manage and there are pros and cons for doing this. The obvious pro is financial savings, both for management fees and also for resident managers keeping a tighter control of the purse strings. Also, by having in-house control and avoiding a middleman, it is possible to make decisions more expeditiously.
However, these savings in money and time come with a price. Being a board member without a management company to assist you is a very time-consuming job. Even resident board members who have the best interest of the association at heart may lack the experience and industry contacts to do the job. In addition, the association has to deal with board turnover, part-time residents and illness, which can interrupt a project and daily decision-making.
If self-management is still the association’s decision, it will require at least two dedicated and available board members and could require as much as 30 hours a week. These board members should have accounting experience and, if possible, some building experience. Also, whether you are self-managed or hire a professional manager, all associations will need an attorney experienced in Florida condominium law. Finally, there are all kinds of personalities out there and a homeowner who is in charge of an association must have good written and verbal communication skills and a non-abrasive personality.
I’ve personally lived in a condominium association for 20 years and have been fortunate to have a very competent and knowledgeable management company overseeing an equally competent and knowledgeable board for most of those years. But it’s easy for an association to come off the rails because of poor management and homeowner interference. Whatever your association’s decision is about self-management or professional management, stay involved and voice your opinion. It’s the only way to keep your freedom.
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