+ What is the role of a Property Management Company?

Our position and authority is often misunderstood which can often lead to confusion and frustration for homeowners. Your association is governed by its own set of documents known as Covenants and Bylaws. These documents create the rules; however, your community also has a board of directors. These volunteers are homeowners, just like you, and are elected by the community to represent the total population of your neighborhood.

Many people do not understand that all the important decisions are made by the board of directors, not the management company. The board of directors in turn is guided by the governing documents. To fully understand what we do, along with the responsibilities your board is obligated to fulfill when they agree to hold a particular position, we have prepared a list of frequently asked questions.

+ What is an association?

Condominiums, townhomes, and many single family home neighborhoods are associations. This means that there are common elements to the property enjoyed by all residents. The number and type of common elements vary. For some neighborhoods, it is simply an entrance sign and landscaping, for others it is a clubhouse, pool, and tennis courts. For townhomes and condominiums common elements can vary.

Condominiums often include some of the physical features of the building itself, such as the roof, walls, gutters etc. Because the community as a whole “owns” these elements, the community as a whole is responsible for the maintenance of those elements, as well as any necessary insurance. Townhomes can operate as a “condominium” where most of the structure is maintained by the association, or it can be “fee simple.” Fee Simple means that the building or structure is the responsibility of the individual owner.
To make matters even more confusing, some townhomes are partially “fee simple” meaning some of the elements are covered others our not. A homeowner might need to address a gutter issue, but the roof might be common. As you can imagine, all these variations across communities do not make understanding the rules very easy for the homeowners.

+ Is an association a business?

Yes. Associations actually operate as “not for profit” businesses. They must be registered with the Secretary of State and the officers (President, Vice President, Secretary, and Treasurer) are generally listed there as well. As such, they need to operate as a business. Responsibilities include analyzing the budget, pursuing accounts receivable that are delinquent, and generally carrying out the objectives of the covenants.

+ How do I know I have bought in to an association?

It is the responsibility of the buyer to discover whether the property they are about to purchase is inside an association and what the rules are in general. When you purchase your home the closing documents also reference the fact that the property is in an association and that you intend to abide by the governing documents.

+ What is a board of directors?

A board of directors is a group of homeowners, just like yourself, that decide they want to participate in the day-to-day activities of the association. In the same way our elected officials uphold the constitution, the BOD must uphold and enforce the governing documents. This is their fiduciary, legal and ethical obligation.

+ If the Board is making all the decisions, what is the management company doing?

The day-to-day activities of most associations, such as collection of dues and payment of bills, are so detailed and involved that they go far beyond the time and attention most volunteers can provide. In addition, most boards understand that their knowledge of property management is limited and seek an advisor with more expertise and experience. Finally, the introduction of the management company allows a third party to tend to the issues that would otherwise involve one neighbor confronting another on potentially contentious issues, reducing the ability for the well-intentioned board members to enjoy their homes.

Some associations select a financials-only package and other have full service contract with an on-site managers and management technicians. Every service level in between is also available so agreements do tend to be customized.

+ What is an Advisory Board?

During the construction phase, many developers allow an advisory board composed of homeowners to be in place. An advisory board lets the builder know the concerns of the community. Although they have no formal power, and the developers are under no obligation to create them, their existence allows the builder to be aware of the homeowners’ concerns and creates a smoother transition in the end.

+ What is the ultimate mission of the property management company?

Although our role does require us to send letters regarding violations and process files that are delinquent on board direction, the ultimate goal of our work is truly to protect and enhance the value of your investment!

We strive to be viewed as a partner not only with the board of directors, but with the homeowners as well. Strong management, grounded in transparency and best practices, normally results in a community that is financially sound and residents who enjoy a better quality of life with a well maintained and thriving property.

+ Why is living in an Association or owning a property in one beneficial to me?

Association living has many benefits, so many in fact that the vast majority of new construction all over the country seems to be leaning in this direction. For one thing, the standards outlined in the covenants preserve the look, feel and level of maintenance of the property.

Another reason is sharing the expense of common amenities allows for economies of scale, those that would otherwise not be able to afford a pool can swim all summer, just as an example.

Finally, there is often a sense of community and pride that is shared among the community. Quality of life and social activities are also normally enhanced for the members. All these factors preserve and enhance the value of your investment!

+ Who makes the rules of the Community?

Just as this country is based on the principles of our Constitution, your association is governed by documents known as Covenants and Bylaws.

The Bylaws generally outline how the association is organized and how it is to be governed. The covenants, on the other hand, dictate the actual “rules” of the community. For example if you were wondering how many board members your association needs, you would turn to your bylaws; however, if you were wondering if you can rent your home, what the architectural guidelines are, etc. you would find that information in your covenants.

+ Can my neighborhood governing documents be changed?

These documents were normally created prior to construction beginning on the property at the direction of the developer and by attorneys that specialize in this area of law. Similar to our own Constitution, your governing documents can be “amended” if a large enough portion of the community votes for the change. Normally, it requires a two-thirds vote of the homeowners. Although actually amendments normally cannot be added without a community vote, the board can pass resolutions and create some policies and procedures on their own within the parameters of the covenants.

+ What is a 'Turn over' meeting?

The developer has full responsibility and complete control over the association and what the covenants and bylaws say during the construction phase. Once the community is complete, or a certain number of years have passed, depending on what the covenants state, the developer releases his or her rights and decision making authority to the homeowners. At that point the community will have its first election per the bylaws. Interested homeowners will step up and run for a position.

Unlike our national or local government, many homeowners run uncontested as this is a volunteer position requiring a great deal of time. Often, there are too few homeowners willing to participate.

+ What is a board of directors?

A board of directors is a group of homeowners, just like yourself, that decide they want to participate in the day-to-day activities of the association. In the same way our elected officials uphold the constitution, the BOD must uphold and enforce the governing documents. This is their fiduciary, legal and ethical obligation.

+ What if I do not agree with a Board of Director's decision that affects me directly?

If you do not agree with the decision of the board of directors for a personal request you have made regarding issues such as architectural control, leasing, violations, fining, etc., many covenants allow you to appeal to the board for a reconsideration of your particular needs. Check your governing documents for more details.

+ What if I do not agree with the majority of the Board of Director's decisions?

You may wish to run for a position on the board at the next election.

+ Are all covenants and bylaws the same?

No. This is a big reason why many homeowners become frustrated. If they live in one association and move to another, they may mistakenly believe that they “know” what association rules are; however, this is not accurate. One association may allow leasing and another may not; one may allow you to have a trampoline in plain sight, another will not; one may allow signs, another will not and so on.

+ Are there any laws that need to be followed?

Communities that are Condominiums or Property Owners Associations have additional protection through the Condominium Act and/or the Property Owners Act. The differences between an HOA, POA and Condominium are, however, an article on its own.

+ What can I do as a homeowner to be sure I am not violating the covenants?

First and foremost, read them! Do not put in an addition, add or subtract landscaping, paint, rent, etc…without knowing your rules. Your management company should be able to answer any questions you may have. Most associations have a process to apply for an exterior modification, including paint, landscaping and many other changes. They may also have a process to receive approval for leasing if it is allowed.

+ What is a neighborhood assessment?

Assessments, commonly referred to as dues, are the fees collected from each homeowner that flow directly to the association’s bank account. Dues create the income needed to run the association, pay the insurance, the vendors, the maintenance and a small portion of it often goes towards a management company.

+ What is a special assessment?

A special assessment is a one-time charge to all the homeowners decided upon by the board of directors, usually due to the need for a capital improvement.

+ What is a specific assessment?

A specific assessment exists when there is a common expense to the association that is incurred due to a particular home and/or produces a benefit to a particular home(s) and does not benefit all the other homeowners equally.

+ Can the property management company raise my dues?

No. The management company has no authority to raise the dues. Only the board of directors can do that by a majority vote.

+ How much can the Board of Directors raise my dues?

That depends on the covenants of your association. All of them are different. Some give the board authority to raise the dues with no limits, and some state percentage restrictions.

+ Do homeowners pay the property management company?

The homeowners do not pay the management company directly, they pay their association. The association in turn has a monthly fee to the management company for the work they do to run the business of the association.

+ What can happen if I do not pay the assessment and/or follow the neighborhood rules?

Because rules preserve the value of your neighbor’s property as well your own, many covenants allow for strong penalties, including daily fines, if homeowners do not pay or do not comply with the rules. For non-payment, covenants can allow a late fee and interest to be charged and the account can be turned over to a collection agency and/or an attorney.

A lien can be placed along with a law suit. Voting rights and amenities access can be suspended. In some cases where utility payments are made by the association, the documents allow the association to shut off water.

In communities with private streets, the association can block gate access, tow cars, and so on. Not following the rules set forth by the governing documents can lead to fines which is some cases have added up to thousands! Non-payment can result in legal fees of thousands of dollars as well.