One of the hardest questions for a condominium association board regards management: Is it better to do-it-yourself or should you hire a pro?

The number of units will usually drive the decision-making process. Most property management companies will not manage fewer than 20 units because it's not cost effective for them.

Cost is, of course, the first question all associations will consider. The second question is the one of time.

Does the president or any member of the board have the time to collect assessments? Who has time to manage and plan association repairs?

Typically, once you hit 30 units the work load is very large. How would you like to find a vendor to handle a pipe break at 3 AM? How about the electrician that charges $150 an hour on the weekends?

Property management companies have relationships with vendors. These relationships mean their vendors will make a special effort because they will get paid on time and get more business. A single condo association generally does not have that clout.

What is expected from the board of directors by the owners of the community? Dues collection, enforcement of rules and the preservation of the grounds and the property are the key responsibilities.

The implementation of these responsibilities is the challenge. Imagine you need liability and fire insurance to protect the property and the board of directors. You need to make sure the pool is serviced and that you comply with state regulations regarding the servicing of pools. Does the board have the time or expertise to complete these tasks?

The condition of the roof and the buildings is paramount as you plan out the annual budget. A resource study must be completed and reserves must be established so that in the future when you want to sell your condominium home you have enough reserves for roof repairs, gutter repairs, deck replacements and exterior painting. Again, can the board complete these task and complete them well?

Maintenance costs will increase monthly homeowner payments but will insure quality living and preservation of the property's value.

The most difficult thing to do is to make sure the property is properly budgeted. Most owners want to pay the least amount possible. This means they may not get the services needed to keep the property in good shape or even have enough money to pay for emergencies such as blown down trees, rotten bridges, rotten decks or broken pipes. Nature has a way of screwing up man' best laid plans.

Policy issues also need to be decided by the board, bylaws need to be clarified and policies regarding renters and satellite dishes, for example, have to be resolved. Additionally, the association needs to be involved in the transfers of all units and clarify for escrow the balance owed by outgoing homeowners. A management company can help do such tasks, but so can an attorney, and it helps to have membership in the Community Associations Institute (CAI).

A board of directors can handle many self-management tasks especially if it farms out accounting work, but as the association gets larger the benefits of competent outside management make greater sense. This is especially critical as the number of after-hours maintenance problems increase.

So which is it: Self-management or hire professionals? In general, if there are 20 units or less, self-management may be the only option. Between 20 and 30 units, either self-management or the use of an out service can work, depending on the property and board preferences. Over 30 units, professional management is likely required.

For more articles by Clifford Hockley, please press here.

---

Copyright 2001 Clifford Hockley. Posted by Realty Times with permission.

---

Published: February 28, 2001

Use of this article without permission is a violation of federal copyright laws.