Getting the Most from Your Management Relationship

Being on the board of directors for a common interest development can be as challenging as it is rewarding. Many bring their own unique set of skills to the position and quickly realize there is more to the job than they had ever expected. Continued on page 10

Running a real estate corporation that is responsible for most of its residents’ largest investment is a massive responsibility. This is a voluntary, unpaid, fiduciary position where most of the decisions that are made directly affect the property values and quality of life of the residents, who may also be close neighbors or friends.

It is for these reasons that many knowledgeable board members seek professional management to assist them in the day-to-day operations of the association. Availing themselves of a professional who specializes in community association management will give the board access to resources they may not have time to nurture independently. Common interest developments in California are subject to more than 600 laws; a professional community association manager receives ongoing education from the legal community and from other professionals who practice in these areas daily. An effective management company has a good relationship with a pool of vendors and can expose a board to many different choices so that they can receive the help they need with the projects they face.

The relationship between an HOA board of directors and a community association manager is the same as any board of directors in private enterprise. The board is elected by the homeowners. It then identifies, interviews, and contracts with the management firm or hires a general manager. Once hired, the board sets strategic direction and objectives. They establish projects and tasks and delegate most of these to the manager. The board is responsible for the generation of a budget, oversight of funds, the well-being of the community, and overall effectiveness of management including customer service. Management works for the board of directors pursuant to the terms and conditions in their agreement. Here are some key factors that contribute to a positive relationship when working with professional management.

Set the Stage

The best practice of all is to hold an organizational meeting of the board after each election. This allows the board to determine their philosophy and communicate it to the manager. If policies are needed, this is a great time to clarify process and procedure.

Continued on page 12

Running a real estate corporation that is responsible for most of its residents’ largest investment is a massive responsibility.

CID CONSORTIUM, LLC

Pulling from 45 years of business, CIDC has accumulated a wealth of experience and expertise through a relentless pursuit of perfection.

Since its inception, CID Consortium, LLC (CIDC) strives to provide excellent financial and operational guidance to communities, board members, managers, and owners of communities big and small in an everchanging environment.

We believe in building relationships by doing our business transparently and keeping our clients informed. Before sending a proposal, we take the time to uncover what success looks like for your community. Once we are aligned, we will propose a combination of Governance, Finance, and Organizational services specific to your unique needs.

Owners and operators Donald (“Don”) W. Haney, CPA, and Adam P. Haney, CPA, are well known for their role in developing homeowner association industry standards and technology. Don originally started in the industry in 1979 when he formed two corporations: CEO, Inc. and Haney Accountants, Inc. Both organizations laid the foundation for CIDC led by Adam P. Haney, CPA.

Today, CID Consortium, LLC has grown into a team armed with passion and expertise for improving the community living experience of its members. Pulling from 45 years of business, CIDC has accumulated a wealth of experience and expertise through a relentless pursuit of perfection. Fueled by technology and incessant process improvement, the team engages with members on a rich platform, ensuring the community living experience continues to be exceptional. For more information about the services we provide, please visit our website at cidcllc.us.

919 Reserve Drive Roseville, CA 95678 (888) 786-6000 cidcllc.us

Getting the Most from Your Management Relationship Continued from page 10

The manager can educate new board members on how the association functions and make the board aware of any new legislation that may affect the way they work.

Boards should review the new budget in line with the reserve study early on and plan out the most needed projects for the year. They should create a list of goals and schedule each major project so that everyone has a clear idea of what needs to be accomplished before the year’s end. This should be a living document that is updated and shifted around as new information is received. This process will allow the manager to solicit proposals and gather information proactively in preparation for the intended projects.

The association should look for positive ways to engage the membership and schedule these as well. As the United States gets closer and closer to a sense of normalcy, associations can consider forming a social committee to hold events and find ways to keep members in the loop about upcoming projects. They can celebrate things like exterior aesthetics, landscaping, or volunteer participation and highlight these in the association newsletter or on their website.

Knowledge is Power

A strong board and membership must educate themselves. The governing documents of a common interest development define the type, structure, voting rights, and maintenance responsibilities of the association. The primary documents are the Articles of Incorporation; the Covenants, Conditions and Restrictions (often referred to as the CC&Rs or Declarations); and the Bylaws. Other important documents are the rules and policies of the association, the budget package and policy statement, and the reserve study. Having a solid understanding of these documents will help with understanding the makeup of each unique community.

A strong management candidate will be certified with a reputable organization and receive ongoing education and experience in the field. They will also perform research and develop a good understanding of the governing documents for the communities they serve. In this industry, something new occurs almost every day and the opportunity to learn is neverending.

Time is Precious

There are typically two types of management services available to common interest developments: general management and portfolio management. General management offers a dedicated individual who often will work on the premises and focus on a single association. Portfolio management is more common and is a cost-effective solution for many communities that have active boards and residents. A portfolio manager is assigned several associations, and each client pays for a portion of that manager’s time. Boards should never be afraid to ask questions and clarify expectations. More time is usually available if needed, but it may come at a price.

A typical management fee for professional services is set using an estimation of the time needed for routine, day-to-day services that the association requires. This may or may not include financial services such as bookkeeping and reporting. Intermittent projects, such as participation in large reserve projects, litigation proceedings, insurance claims, governing document revisions, and additional meetings of the board, members, and/or committees, require more of the manager’s time and may be subject to additional fees, because these items cannot be easily predicted or defined. Many boards solicit volunteers from the community and form committees to assist in keeping management fees down, while also raising awareness within their membership as to how the association functions.

Communication is Key

Accessibility is desirable, but expectations must remain realistic. A general manager, for example, will have certain working hours when they are available and will expect privacy when they are enjoying their personal time. A portfolio manager may be away from their phone or computer while on a site visit for one of their clients or attending a board meeting or a vendor walk. A strong management company will return communication timely, even when they cannot be accessible in the moment. Most management companies will have after-hours emergency services. These services are typically billed to the association as additional work and should be limited to actual property-threatening emergencies that cannot wait until the next business day.

The board needs to be honest about how it wants its manager to communicate with its members. Some boards want the manager to deliver difficult messages and reinforce the board’s position in a positive way with supportive comments. Other boards prefer strong language and substantial fines to gain compliance. It is up to each board to determine the style they believe to be most effective and educate the manager as to their expectations for communication and process.

Questions are a good thing. Boards and residents who ask questions show an interest in their community, and this should be nurtured. Managers may not have the answers instantaneously, but they have many resources at their fingertips and can research

Continued on page 14

I HAVE I HAVE OUTSTANDING OUTSTANDING RATES RATES AND HOA AND HOA COVERAGES.COVERAGES.

Hi, my name is Kevin Boland and we have probably met at many ECHO panels over the years. I offer Guaranteed Replacement Coverage so smart boards can protect buildings from wild/urban fires no matter what the cost is to rebuild today! Hi, my name is Kevin Boland and we have probably met at many ECHO panels over the years. I offer Guaranteed Replacement Coverage so smart boards can protect buildings from wild/urban fires no matter what the cost is to rebuild today! Give me a call for a professional bid on your HOA insurance and save! Give me a call for a professional bid on your HOA insurance and save!

Kevin Boland, LUTCF, AIC, CIC Kevin Boland, LUTCF, AIC, CIC

CA License # 0C33871 1202 Grant Ave., Ste. E, Novato, CA 94945 CA License # 0C33871 1202 Grant Ave., Ste. E, Novato, CA 94945

Call 415.898.4370 today! kboland@farmersagent.com Call 415.898.4370 today! kboland@farmersagent.com

www.KevinBolandInsurance.com Restrictions apply. Discounts may vary. Not available in all states. See your agent for details. Insurance is underwritten by Farmers Insurance Exchange and otherwww.KevinBolandInsurance.com affiliated insurance companies. Visit farmers.com for a complete listing of companies. Not all insurers are authorized to provide insurance in all states. Coverage is not available in all states.Restrictions apply. Discounts may vary. Not available in all states. See your agent for details. Insurance is underwritten by Farmers Insurance Exchange and other affiliated insurance companies. Visit farmers.com for a complete listing of companies. Not all insurers are authorized to provide insurance in all states. Coverage is not available in all states.

Getting the Most from Your Management Relationship Continued from page 13

and respond effectively if given the time to do so. A board should never hesitate to ask questions in a professional and respectful manner, and if they receive resistance from the manager, it could be a hint that there is a larger problem.

The management company is a team of professionals who live, breathe, and dream common interest. A board of directors is a unique group of personalities with a vested interest in their community. Together, they work as a team to nurture and care for the residents they serve. Difficult personalities, disagreements, and

Private property towing professionals

THE REBELLO’S DIFFERENCE

debate are all part of working with large groups of people. Remaining professional at all times and respecting others’ points of view will allow both sides to focus on the issues that are important to making decisions in the best interests of the whole. The board should use the manager as a resource, and the manager should use the board as a conduit to the membership.

At the end of the day, the board and the manager are running what is, in many instances, a multimillion dollar real estate corporation. The primary purpose of the corporation is to maintain, preserve, and enhance the common area. However, a common interest development also presents a unique opportunity to utilize the personalities and experience of the residents who live there. A healthy balance between corporation and community is dependent on the relationship between the board and the management company. Handling rule enforcement is important, but it is the financial health of the association that should take priority. Remain proactive, communicate often, and never stop learning.

Ask Us How To Reduce Risk, Minimize Complaints and Eliminate Aggressive Towing

call: 408-292-8300 x2

696 Kings Row, San Jose, CA 95112

www.rebellos.net • service@rebellos.net

Jeff Farnsworth, CAMEx, CCAM-PM, is President/CEO of Steward Property Services. He graduated from Humboldt State University and began working for Steward Property Services in 2006. Jeff and his wife Jennifer purchased the company from its founder, Mrs. Helen M. Loorya, in January 2017 and strive to maintain the high level of service for which their company is known.

WE MAKE ASSOCIATION VOTING MANAGEMENT EASY.

Liberty HOA Election Services, LLC Inspectors Of Election