As with any business, sound management principles are necessary to accomplish your community association’s inherent goals. Management embraces, without exception, planning, organizing, staffing, directing and controlling. The board of directors is charged with employing these principles, usually by delegating the requisite duties, but never the responsibilities. An effective board regulates policy; it does not micromanage. Several management options do exist. Only you can determine which method is the best for your association.
Self Management – this requires passionate commitment from the association’s volunteers. Benefits include building community spirit by participation and substantial cost savings, but are also dependent upon the skill level, experience and dedication of the volunteers. Professional assistance should always be considered, particularly when a task requires specific licensing or permits, is above skill levels, or contains elements of unacceptable risk (to either person or property). As volunteer effort and turnover can fluctuate tremendously, added costs may be incurred to “re-stabilize” the administration. A volunteer can easily become overwhelmed. The board must be ever vigilant in distributing tasks.
Employed Management – greater autonomy and control can be attained if the association engages its own staff. Intense scrutiny is warranted to ensure the hires are adequately skilled and certified, job descriptions are routinely followed, payroll expenses are justifiable, and the correct insurance coverage is in place (especially workers compensation and employee dishonesty).
Professional Management – many associations will opt for professional management, whether it be full service, part-time, on-site, or off-site. Having access to the full range of services, personnel, experience and knowledge of the professionals is often worth the increased costs. Fixed monthly fees usually cover the administration and routine maintenance, but additional costs are customary for completing tasks beyond the habitual. A schedule for these extra labor costs should appear in the management agreement. Advantages also include continuity in administration, governance and maintenance. It is important to ensure your management professionals are proficient, qualified, licensed, and appropriately insured.
Composite Management – essentially a hybrid of self and professional management. Routine tasks are completed by the association’s volunteers, and task-specific professionals or contractors are engaged for everything else. The level of self-management would depend upon the current knowledge, experience and enthusiasm of the volunteers. A specific example of a needed professional might be the contracting of a recorder of minutes for an association meeting. Composite management has the advantages of keeping costs down and ensuring more qualified and licensed personnel are more efficiently engaged. Regardless of which management method your association practices, competent oversight and internal controls are necessary for effective leadership. Appoint directors with knowledge and experience; require continuing education; organize committees of volunteers to spread the burden; utilize your contractors and professionals wisely, hold them accountable
A New Trend?
Association management DIY-style brings big savings
Article by: JIM BUCHTA , Star Tribune August 11, 2012
Long before the housing crash, Traci Lehman struck a deal with a homeowners association in Brooklyn Park to let it use a Web-based management system that she’d been using as the fee manager of the property.
For Lehman, president of Cities Management, giving the association the tools meant eliminating her role as property manager — and the fees that went with it. But the system led to big savings for the small, 144-member association, which proved helpful in the housing downturn.
The software includes templates, contracts and a record management system that eliminates paper records. It was developed several years ago by a Cities sister company called SenEarthCo, and is used across the country by property managers. It can also be accessed by members of homeowners associations to organize and access paperwork.
Five years after first handing over the software, Cities has offered it to all the associations it manages as part of a new product called DIY Management.
It worked at Stratford Crossing in Brooklyn Park, so why not elsewhere?
For many associations, the DIY approach replaces an inconvenient assortment of documents that get passed from person to person, said Daniel Greenstein, an attorney with Bernick Lifson. And at $150 a month, it’s a bargain for most associations.
Lehman said that launching the DIY version of the software didn’t require additional investment because the software already exists, including all the necessary templates and reports.
A big untapped market…