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LIVING & CONTRIBUTING IN AN ASSOCIATION
January 1, 2002
Living in a community association can be the most rewarding
or the most frustrating experience of your life! In any
form of community association, you, the owner, must stay
involved in the workings of the association. The
association always needs owner volunteers for the Board of
Directors and Committees. In addition, the Board of
Directors needs unit owner participation at meetings for
input and guidance. The association does not operate on
its own without the owner's involvement. Even, if there is
a management company or management staff handling the
day-to-day operations and problems, it is the Board of
Directors (the owners) who has the ultimate responsibility
to manage and operate the association.
To fully protect your investment and your lifestyle, an
owner needs to be involved in the association and its
operations. If this is not possible, you must at least
attend Board of Directors, Committee, Workshop and/or
Membership Meetings in order to stay informed and be able
to benefit from the community association experience and
lifestyle. A person's home is usually the single most
important and costly investment that they will ever make.
To leave major operations and maintenance decisions to
others, without your input and participation, just does not
make very good business sense.
The major cause of unhappiness and misunderstanding for an
owner in a community association is usually the result of a
belief that the association takes care of all maintenance,
repair and replacement problems. This is a misnomer that
occurs daily in most communities. This misunderstanding is
usually a result of a lack of a working knowledge of the
documents and the state statutes, which govern your
association. In many cases, the owner believes that
because they are paying maintenance fees, everything that
ever needs maintenance, repairs or replacements should
automatically be handled by the association. In most
cases, the documents will provide the guidelines for any
repairs and replacements and will define who is
responsible. If the documents are silent or are in conflict
with state statutes, the state statutes would prevail.
It is the responsibility of the buyer of the unit to read
and understand the details of the documents and their
ultimate ramifications upon the unit owner's lifestyle and
budget. In addition to being knowledgeable about the
documents and the association's maintenance
responsibilities, an owner should be able to read and
interpret the association's budgets, balance sheets and
income statements for the last few years. This information
will be able to show a buyer of a unit if the association's
budget has risen over the last few years; is within budget;
whether or not the reserves have been funded; or if there
is a collection problem with delinquent unit owners. If
there is a problem with any of these categories, there may
be possible future increases in maintenance assessments in
order to make up for past deficits.
Another result of past deficits and poor budget controls
could be the possibility of future special assessments. If
asked, the seller should divulge how many special
assessments have been levied in the last few years and if
there are anticipated special assessments in the future.
There are some associations who annually under fund their
operating budget and then make up the difference with
special assessments throughout the remainder of the year.
The powers that be at this type of association feel they
can offer resale units with a low maintenance fee that will
make their community more attractive. Actually, that type
of association will begin to develop a negative reputation
for having an abundance of special assessments! Eventually
it will have the opposite effect and the association would
become a community where you do not want to buy. If a
community has a strong balance sheet, has plenty of money
set aside in reserves for major repairs and replacements
and is considered to be well maintained, isn't that the
type of community where you want to purchase or invest in?
In a well-managed association you can expect to live in a
community where you are respected as an individual, are
well informed about the workings and operations of the
community and are encouraged to be involved with your
association, either actively or as a member participant. A
well-run association will have an adequate budget to
operate the association. It will have adequate funds for
emergencies, long-term projects and funds set aside for
reserves for major repairs and replacements. There will be
adequate insurance to protect the association from casualty
and liability losses. Professionals are used throughout
the year by the association to help in the operations and
management of the association. The management of the
association will be responsive to the members of the
community. Telephone calls are returned to the owners
quickly and official correspondence is acknowledged. The
records of the association are well maintained and readily
available for unit owner inspections. A well run community
association, is not only a place where you want to live but
is also a place where you will be able to maximize your
initial purchase, in the form of a higher resale value.
Copyright 2007© Associated Property Management of the Palm Beaches, Inc.
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