When we ask Boards of Directors at self-managed Community Associations about their reasons for making a switch to professional management there is a remarkable similarity to their replies. They fall into three basic categories:

The Board is tired. Since board members usually live on the property they are often stopped while coming and going with homeowner questions they cannot avoid. With no buffer, they feel they are always on call. Board members also find it awkward to enforce the association rules and policies with neighbors with which they are otherwise friendly.

In other instances, a key individual has been graciously carrying the burden of handling the association’s business for some time. When they leave the board due to relocation, illness, or death, a huge gap is left behind.

Unsure about legal and compliance issues. Board members are often unsure of how far their governing authority extends and what is permissible. This is even more challenging due to the constantly changing laws regarding closed meetings, document requests, and reporting standards.

Difficulty complying with budgeting and financial reporting requirements. Even if the Treasurer is a CPA, the Board is often unsure about the proper format for association financial statements, annual reporting requirements, the budget process, and required deadlines. Enforcing the collection of delinquencies with neighbors is also uncomfortable.

Once a Board is ready to lay down the burden of doing it all themselves, several things happen. They often find surprising cost savings on services, due to the multiple resources available through a professional manager. In one recent instance, we saved an association over $5000 a year by immediately bidding out their insurance policies to get a more favorable rate.  We have also found savings in phone service, utilities, and janitorial services, often negating the cost of management fees.

The challenge of recruiting board volunteers is simplified due to the reduced workload. When the officers no longer need to collect assessments, create monthly financial statements, prepare for meetings on their own, and address every request from homeowners, the workload is substantially lighter. They can often reduce the number of board meetings.

When homeowners get prompt answers to their questions, see professionally prepared financials, and observe consistent property maintenance, they develop confidence that the community is well-governed. This improves trust between the board and homeowners and results in a happier and better functioning community where people want to live.

Best of all, an increase in property values often follows, making the change a win for everyone.

Ken Bertolucci is President of NS Management, a community management company serving the North Shore and north/west suburbs of Chicago. For more information visit www.nsmanagement.net.

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