Serving on the board of a condo association is a great way to become involved with your condo community. Your election by fellow association members means you've received their vote of trust to oversee association matters in a responsible manner. Let's look at several roles and responsibilities of a board that accompany a board position:
Complete Management Responsibility
Condo associations may hire outside management companies for some duties. The primary management of the association, however, falls to the association board. This is why is it essential that all board members be well-versed in the association's bylaws. Often referred to as "condo docs," the bylaws serve as a guiding document regarding condo association management. Board members must also become familiar with state laws and their application to the association's bylaws.
Money issues present the biggest opportunity for conflict in any business. Effective budget management of a condo association's operating expenses is critical. It is highly recommended that boards without financial professionals as members hire an outside CPA for assistance. By implementing smart financial planning, budgets include estimated potential costs and boards then set condo fees accordingly. In addition to estimating operating expenses each year, the board must establish a reserve plan for maintenance and repairs.
Maintenance & Repair
A condo association board is responsible for maintenance and repair of common areas and building exteriors. Condo common areas are defined as areas where all parts of the property are available for use to all association residents. Examples of common areas are parking lots, playgrounds, and walking trails. Budgeting for maintenance and repair, along with possible increases in insurance fees, is critical. Too often condo association boards fail to plan ahead, only to encounter an emergency situation and no available funds.
Building exteriors, such as roofing and siding, also require preplanning during the budget planning process. Extreme weather or simply age and wear take a toll on the exterior of buildings. Condo association boards must remember that not planning ahead for maintenance and repairs results in losing current members and hurts resale values.
It is the responsibility of condo association boards to collect monthly condo fees. Serving on the condo association board means interacting with neighbors and friends and while sometimes difficult, collecting fees is essential to maintaining the budget. An established collection policy is important for boards to implement in order to ensure compliance and as few problems as possible.
Fiduciary duty is defined as a legal obligation of one party to act in the best interest of another. A condo association board member is a fiduciary on behalf of condo association members. This means the board member is entrusted with the care of the association money and property. Serving with fiduciary duty basically means taking off your personal interest hat and exchanging it for an association hat. It's the process of acting on behalf of the good, in this case, the condo association.
Board Member Investment
Board positions are volunteer positions and an investment of your precious time. Monthly meetings and communication among fellow board members and the community are part of the package. Condo associations are home to members with a variety of backgrounds and talents. Dedicated members willing to commit to serving on the board do so for their commitment to having a thriving and successful condo community. A happy place to live, great resale values, and attracting new members are results of great condo association board management.
While serving as a condo association board member may appear overwhelming, the reward of making your own community thrive is invaluable. For more information regarding the roles and responsibilities of condo association boards, contact us today.