A condominium owners association (COA) is a legally created group of condo owners that work together to oversee the maintenance of community common areas. The benefits of a COA can include well-maintained amenities and creating a sense of community and collaboration among condo owners. Here are four steps involved in condo association management:
1. Electing a Board of Directors
A condo owners association is governed by a board of directors, which association members elect. Homeowners have the opportunity to volunteer for the board of directors. If the community is currently under development, builder representatives may temporarily fulfill these roles. These are unpaid positions, and depending on the governing documents, terms may last between one to three years. Elections for these roles happen at the annual association meeting.
Board members are responsible for making decisions for the good of the community, including creating rules for the community to follow and handling community funds. Officer roles within the board of directors include president, vice president, treasurer, and secretary. The president acts as the association spokesperson and the community liaison. Qualified directors are proactive individuals with a good understanding of community management and the governing documents.
2. Following Governing Documents
Associations are responsible for following state and local laws and ordinances and adhering to governing documents. An association’s core governing documents are the articles of incorporation, declaration, and bylaws. The articles of incorporation establish your condo association as a corporation. File these forms with your state agency. The declaration is a legally binding document that establishes the condo owners’ and COA’s rights and responsibilities, detailing maintenance responsibilities. Bylaws include rules for running the association, including eligibility and terms for the board of directors.
Community associations establish and enforce community guidelines. Restrictive covenants are rules establishing what property owners are allowed and not allowed to do with their property. This can include:
- Pet policies
- Rental policies
- Noise restrictions and community quiet hours
- Parking regulations
- Maintenance standards, such as keeping the lawn mowed
- Permissible house colors
The condo association is responsible for enforcing the rules fairly and consistently. If community members violate community guidelines, the association addresses the violations. This may entail sending a letter for a first-time violation and charging fees for continued violations.
3. Establishing Committees
Create committees to help delegate responsibilities and encourage homeowners to be involved. These committees may be outlined in the governing documents. Landscaping, communication, and finance committees help associations maintain the appearance of common areas, keep community members informed about meetings and projects, and manage community finances. Your association can establish additional committees to handle community relations, rules, regulations, and covenants. Committees should be scheduled to meet regularly. These committees report to an executive board. The president is responsible for reporting committee actions to the entire Board.
4. Creating a Community Budget
Condo association management includes creating and following a community budget. The board of directors is responsible for budget creation. The budget should include funds for operating expenses, such as the maintenance of common areas, and reserve projects. A reserve project fund includes savings for more extensive repair or improvement projects that are determined by a reserve study. Your association can hire a community association management company to create a community budget and provide assistance with financial records.
Income comes from community assessments, which are homeowner fees. The budget includes information on the amount of assessments and the assessment rate. Investments, rental fees, or fines may generate additional income.
To create the annual budget, the board of directors reviews the previous year and estimates expenses for the upcoming year. A meeting is scheduled to ratify the budget, or the process is part of the annual association meeting. The board should provide condo owners copies of the budget summary and budget several days prior to the meeting.
Seek Condo Association Management Services
Board responsibilities also include assessment collection, project management, and community event organization. A full-time manager from a community association company can help through the process of starting a condo owner association and assist with condo association management, including administrative, financial, and management tasks. A community association company also offers training for your board members. Look for condo owners with leadership, management, and communication skills to serve as part of the association and board.
