Condo boards hold complete responsibilities for managing their community. The board is responsible for managing all fiduciary and financial aspects of all the projects. You can outsource several aspects of your functions to a condo management company,but it is still the board that retains all the responsibilities. Besides, you should seek the guidance of experienced accountants and legal counsel who can work as valuable sources of information. However, if you have hired a condo management service, it can provide these additional services depending on how large a company it is.
It is the association bylaws that govern the management of a condo. All board members should know about their association bylaws. You should fully understand all the aspects within the bylaws. At the same time you should also have knowledge of the laws governing the bylaw subjects. This is important in preventing legal issues.
The board is also responsible for creating the association budget and managing it. If you don’t have a dedicated accountant who is a member, you should seek help outside. Hiring a condo management company can however help in ensuring that there is no misuse or mismanagement of the budget.
Some of the key aspects to cover in a condo’s budget include:
• Estimates of expenses
• Insurance costs
• Cost of landscaping
• Cost of maintenance of common premises
• Cost of trash removal
Other operational costs will also be estimated for the next year. You will also have to determine the condo fees or the homeowner’s assessment every month.
The board should also determine the reserves within the budget for managing repair and maintenance costs. It is important that reasonable reserves are maintained to meet any potential repairs. This should depend on the age and condition of the property. If you do not maintain adequate reserves, it can increase the chances of having special assessments.
It is also the duty of the board to maintain and repair all the common areas and exteriors. The common premises are meant to be used by all the unit owners and can include the following:
• Tennis courts
• Open land
The building exteriors also require repair and maintenance and it is the board that should manage it.
Condo boards should also collect monthly homeowner assessments. Depending on your condo bylaws you may also charge liens on units if they don’t pay these fees. It is important that boards create an effective policy for collecting fees so that they can generate consistent cash flow. This is important for meeting the operational expenses of the association.
Overall, it is important that a condo association fulfill its responsibilities and manage the condo in a professional manner. If you fail to make essential repairs and maintenance, collect monthly assessments, or fail to maintain adequate reserves, it can affect the management of your association and increase your risks and exposure. Delayed fee collection can have an adverse effect on your condo’s overall management.