Ask an expert: Your HOA, Condo Questions

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By: Harris Katz
Special to the Boca and Delray newspaper

Q:  Is it possible for an association to do away with a property management company and just self-manage?

K.L., Boca Raton

A: Associations offer residents great benefits, but with those benefits come added expense to live in a community. One of the biggest expenses, as you point out is that the association needs be managed by someone. The question then becomes should a community pay to be managed by a professional management company or should they be self-managed? Property management companies, and there are hundreds of them, work under the direction of the board of directors of the association. These companies are paid a fee based upon services they contract to perform for the association. Such services can include recommending, hiring and reviewing contracts for outside vendors, monitoring maintenance work and landscaping, as well as working as a liaison with the residents to take care of issues that might normally fall on the board to deal with. They also function to collect association fees and prepare monthly and annual financial statements, as well as assist the board in preparing annual budgets. The larger management companies will often have relationships with outside vendors, allowing them to negotiate better pricing than an association might be able to get on their own.

That said, some associations still want to self-manage. As with anything, there are pros and cons related to self-managing. The biggest benefit is financial savings related to the cost of management fees. Another benefit is that a self-managed association may be able to streamline their decision-making, allowing them to operate more efficiently.

The flip side is that by not having a management company, much more pressure is going to be placed on a board, which can already be an extremely time-consuming, stressful job. To make matters worse, most board members generally lack the experience and industry contacts to do a proper job and abide by Florida law, not to mention the issues related to board turnover, which can impact ongoing projects and daily decision-making. Also, by taking on this role, there is more risk to board members should they make decisions that fall outside of Florida law.

Something else to keep in mind is that whether you have a full-time property management company or are self-managed, all associations need to have an attorney experienced in Florida condominium and homeowner’s association law. You should discuss your thoughts with your current association attorney to see what they recommend for your particular association and its needs.

Harris B. Katz, Esq., is Partner of the Law Firm Goede, Adamczyk, DeBoest & Cross, PLLC. Visit www.gadclaw.com or to ask questions about your issues for future columns, send your inquiry to: question@gadclaw.com. The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Goede, Adamczyk, DeBoest & Cross, PLLC. or any of our attorneys. Readers should not act or refrain from acting based upon the information contained in this article without first contacting an attorney, if you have questions about any of the issues raised herein. The hiring of an attorney is a decision that should not be based solely on advertisements or this column.