Q: Our Board is starting to review next year’s budget and issue of management is being debated. The Board would like to cut the costs and fees associated with the professional management and is considering a part-time “on site” manager or even “self management”. Do you see any legal issues involved with this decision?
A: This is more of a business decision, and not legal, but there a few things to consider. We are in favor of hiring a professional management company because most associations significantly benefit from the services, technology and infrastructure these companies can provide. The right management company will provide the Board members with the resources, vendors and information they need to make the best decisions for its members. However, the hiring of a professional management firm is not legally “required” and may not be the best fit for some associations. Many associations are “self managed”, which can mean several things. Many associations, including HOA’s and condominiums, hire a full-time licensed manager and other staff members who are association employees. Your association is the sole focus of these employees, which can be great thing if this overhead is in the budget. Other “self managed” associations are literally managed by the Board members themselves. This is the least preferred alternative and often results in greater personal exposure for the Board members. Managing a community association is a full-time job and should be done by a licensed professional if at all possible. You will need certain expertise that a licensed manager can provide. Before the Board considers taking on this responsibility without a professional manager, the Board should consider making sacrifices in other portions of the budget and make a good faith effort to raise funds to hire a qualified manager.