Community Association Management 101

Table of Contents

Learn the Basics of Community Association Management

Community association management is more than just the tasks a licensed Community Association Manager (CAM) carries out. Managing a community takes time, energy, and know-how that you might not have. Whether you’ve just been elected to your community’s board of directors, or you’re a new community association management professional, these basics are here to help guide you through the complexities of community management. These are a few areas where people in the industry tend to find the most difficulty, and some solutions and resources to get you going.

General Community Management

When it comes to community management, there’s a lot more than just the surface level. Managing a community obviously means your standard maintenance and upkeep, but there is a lot more to it than that: Generating community involvement, managing staff and vendor relationships, dealing with legal requirements and insurance needs, all of it can be a heavy burden, especially to the untrained volunteer or new community association professional.

One of the greatest struggles community associations face is homeowner apathy–low attendance rates for your Annual General Meeting (AGM), disinterest in decisions being made about the community, and resistance to increased assessment fees is disappointingly common. While you’re making every effort to enhance the experience of everyday living, homeowners are just trying to live their day to day. 

Community association managers have similar struggles. Not all boards are created equal. While a great many are diligent in their responsibilities and work tirelessly to support their community, there are a lot of boards who are just homeowners thrust into positions of responsibility, and they need a helping hand. So not only are managers working to find solutions for the community, handling violations notices and enforcement attempts, and using their expertise to make recommendations to the board, they’re often adding board education on top of that laundry list, and they do this for potentially dozens of communities at a time.

Maintaining a successful community can sometimes mean being the bad guy. A daily expectation of the board is that anyone caught breaking the rules is in some way held accountable. Board members should be prepared to have difficult conversations not only with the neighbors you hardly know, but your close friends as well should they violate community standards. No matter how small the violation, it’s important to be consistent with warnings or violation notices to avoid being accused of favoritism or discrimination. 

If your community’s governing documents do not already lay out a framework of which violations are given leniency and warning letters, and which need to be immediately cited as violations, your board should come to that agreement together to ensure uniformity.

Managers should work with their boards by closely monitoring the kinds of violations the community typically sees–maybe that’s mostly trash cans left out a day or two after pickup, or an RV that doesn’t belong showing up in someone’s driveway. Understanding the ways their community is struggling to adhere to the rules is the foundation for creating reasonable responses to violations, and setting up the board for conversations about correcting the behaviors.

In nearly every community, the board of directors is only one of many pillars supporting the association. They’re the decision making body, but they need others to help keep the community going. Vendors like landscapers or groundskeepers to keep curb appeal high, or maintenance crews to handle typical repairs and upkeep, are very common throughout most HOAs and condo associations. But there are plenty of other services your community may want to consider as well, such as pest control, part-time or full time security, or concierge services.

Then there are the staff members who support areas of business that the board either can’t handle on their own, or that they prefer to leave in the hands of trained professionals. Accounting services are arguably the most notable service provided to HOAs and condo associations because of how important it is that the community have accurate and healthy finances. Your community association manager and their management company (including all of their resources!) would also fall under the staffing category.

If you’re a new CAM, one of the best things you can do for yourself and for your future clients is start building a book of trusted professionals and vendors. Companies or individuals you’ve worked with in the past who not only understand the HOA and condo association industry, but who know how to work with boards, a variety of community types, and who can provide top-notch services. This contact list will be a massive resource for you to use as a selling point for future communities as you work to build your portfolio in the future.

While service providers are all technically vendors, it’s important to call out certain services in a different light because of the heavy impact they have on the community. Where your gardeners and courtesy officers are crucial to smooth daily operation, resources like a retained community association attorney or a technology provider contribute to the community on a bigger scale. Partly because of the high cost of their services, but also because they support that day to day success as well as long-term planning and monitoring of the community at large.

An attorney, for example, is the kind of service provider you truly hope you never need to utilize. But it’s important to consider keeping one on retainer regardless. On the other hand, a software partner is an expense from which you would ideally see daily value. Whether it’s a product that helps communicate with homeowners, track violations in real-time from anywhere, or bolsters your accounting efforts, or all of the above, association management software is an investment worth considering.

Accounting & Financial Integrity

One of the most important parts of community management is maintaining the community’s financial health. Board members are burdened with a fiduciary duty, or the expectation that they will act only in the community’s best financial interests. By extension, any CAMs and other decision-making staff hired by a community are also expected to do the same. Financial integrity is a necessity, especially for community association accountants.

While an accountant isn’t expected to make financial decisions for the community and isn’t held to the same fiduciary duty standard as decision makers, they are expected to ensure the decisions being made are being carried out correctly, and are responsible for catching and helping to rectify any discrepancies in the books.

Aside from a very small percentage of small, self-managed associations, a community association can only be functional if it is appropriately and consistently funded by its residents. Typically these funds are collected on a monthly basis, and are an equal percentage of the costs needed to keep the association running per person. Whether this fee covers just the standard requirements (like a healthy reserve fund and the costs of standard maintenance and community upkeep) or more elaborate plans (like growth opportunities and new construction) your community assessments are what make all of that possible.

That said, keeping these assessments “reasonable” will be one of the greatest struggles a board will face. “Reasonable” is completely subjective and is based on the personal needs of each homeowner rather than the greater good of the community at large. This puts the board and homeowners immediately at odds, and finding common ground between the two will be the key to supporting the good rapport you’re working so hard to build within your community.

As a CAM, your job will be helping the board keep the needs of the community in their sights when assessment negotiations inevitably break out. Homeowners will garner sympathy because they’re just trying to live their lives without going broke, and as homeowners themselves, board members are susceptible to empathizing too much and creating a culture of maintenance deferment that can pose a serious threat to the community and their well-being. Ensuring the board remembers the business side of their position is just as important as homeowner awareness in many situations.

The unfortunate reality of having to collect fees is that there will inevitably come a time when someone in your community cannot pay them. COVID-19 showed us just how quickly homeowners can be thrust into financial uncertainty. Delinquency is a two-sided problem that takes compassion and delicacy to handle well, because even though debts owed hurt the community, the person who owes the money is often also hurting. Constructing a collections plan that accounts for the human element of unpaid assessments is incredibly important and can go a very long way in terms of community success.

CAMs should make themselves aware of the collection laws pertinent to their community’s state so they can keep their boards safe from legal trouble. Collections is a complicated business and the laws pertaining to collections endeavors will vary heavily by state. While there is federal legislation in the form of the Fair Debt Collection Practices Act (FDCPA), some states may have more stringent collections expectations, so it’s important to be a knowledgeable resource for your clients to keep them out of trouble.

Maintenance

Maintenance of your community is important, but can be complicated. It’s more than just the daily or weekly upkeep of your neighborhood, like landscaping, pool treatment, or pest control. Annual and long-term maintenances like park playground inspections, roof repairs, and water pipe replacements can all throw a wrench in the works.

Like we mentioned above, one of the best resources a CAM can bring to the table is their mountain of industry connections. Experts on maintaining a safe and sturdy community are invaluable when it comes to generating both short- and long-term maintenance plans. If you don’t have those connections just yet, it’s always a good time to start making them. Keeping an eye on which vendors and maintenance teams work well in your communities is a great way to start hand-picking which you’ll recommend to your future communities, and which you might want to consider making your own premier provider.

Determining an effective schedule for your community’s maintenance needs will be a constant battle for all of the same reasons we’ve touched on previously. Homeowner apathy and the discourse you’ll face when discussing “reasonable” association fees will once again come into play when it comes to planning out (and therefore budgeting for) your community’s maintenance. It’s important to stress the importance of a well-maintained community in terms of safety, return-on-investment (curb appeal), and general success.

If you’re in a condominium or co-op building, your maintenance needs are critical right now. After the condominium collapse in Surfside, FL in 2021, deferred maintenance has been one of the hottest topics to sweep the industry. Much like homeowner apathy, significant maintenance deferment has long been an accepted reality of managing a community building. Unfortunately, we’ve now definitively seen how deferred maintenance can lead to catastrophic damage and tragedy. 

In an effort to correct the deferred maintenance issue facing condo and co-op buildings, Fannie Mae has issued temporary guidance and restrictions that take effect Jan 1, 2022. Buildings determined to have “significant deferred maintenance” could lose eligibility to secure FNMA loans for their units until those maintenance needs are sufficiently resolved and documented. Condominium and co-op boards and CAMs should be discussing plans of action for maintenance schedules and resolving any maintenance needs they’ve been putting off.

Action Items & Resources for Board Members

Whether you’re a career board member who loves dedicating yourself to community involvement, or the new kid on the block who wants to do their part in their new home, there is always important work to be done when it comes to keeping your community association running.

Get Educated

The best thing you can be is educated, because understanding the nuances of your job is crucial, as is being able to pass on that education to your fellow neighbors. The ability to explain exactly what their monthly assessments are paying for, and teaching them all of the right ways to support a community association, won’t just help you while you serve on the board but can prepare potential future board members to join as well. These articles cover some additional topics you’ll want to brush up on:

Accounting Know-How

Much like general education for yourself and your homeowners, some level of financial clarity is something you can immediately offer to your residents. Like we mentioned above, homeowner apathy isn’t just about low attendance to annual or regular meetings. It’s also the resistance to rising assessment fees, costly maintenance and upgrades, and more. Understanding the relationship between healthy accounting practices and a thriving community will be an important step in your community management journey. Here are a few articles to help get started:

Industry Experts

Here at CINC, we strive to provide the support and knowledge you need and train our staff to be experts in this industry. However, we know that we don’t do it all. Our accounting platform is one of the highest ranked in the industry but for other needs such as collections, voting software, or certification courses, we partner with many successful experts in other fields. Here are just a few of CINC’s trusted partners who are ideal for anyone getting started in community management:

  • Axela Technologies – Collections agency for delinquent homeowners
  • Strongroom – Accounts payables for community vendors
  • SenEarthCo – Inspections and work order management
  • Homewise – Document delivery platform for community governing documents 
  • VIVE – Vendor Management Software
  • Letterstream – Online printing and mailing services

Things to put in your plan for the coming year

Education is the bedrock of a solid foundation in your community, but it isn’t the only thing that can make a difference. The phrase “it takes a village” comes to mind. A community needs more than just the board to succeed. It’s a collective effort from vendors, community association managers, and technology partners who make the whole thing work. Consider penciling in additional funds to bring on some extra layer of support in your next calendar year. Maybe that’s a new service provider for homeowners, or a community manager, or a new technology partner.

Action Items & Resources For CAMs

Similarly to what board members can do for themselves, educating your boards is one of the smartest things you can immediately do for your communities. Providing them with your wealth of knowledge and industry expertise will be the most beneficial gift you can give to them. Your support and your understanding will go miles in the way of ensuring long-term success.

But if you’re a new professional in the industry, you’ve probably got a little ways to go before you can use your experience to offer insight to your boards. This guide was designed for you as a resource to provide to your boards until you get the time under your belt to drive your future success.

We’ve shared several of our other guides throughout this article for that same reason as well. We also have a few more for you, plus additional management topics we’ve discussed in the past to continue your educational journey: