A cooperative, condominium or homeowner's association is more likely than not governed by a ragtag band of brave volunteers. Oftentimes, these folks have outside jobs that have little to do with maintaining a residential real estate property, and thus the day-to-day operation of a community can prove quite exhaustive. Fortunately, this is a job that can be, to some extent, outsourced to a trusty professional.
The property manager is a literal jack-of-all-trades, an ambassador trained and ready to represent the best interests of your ownership. Unfortunately, not all managers are created equal, and a board must do its diligence when selecting who shall be its champion. Fortunately, there are some cut and dry criteria by which a board can make this selection. Let The Cooperator help you separate the wheat from the chaff.
Stand Out from the Crowd
It's important that a board take ownership over the property manager hiring decision, rather than trust ownership with a property manager hiring decision.
"Oftentimes a board thinks that it should poll its owners, or poll owners of other associations, as to what they think they need in a property manager," says Beth Lloyd, president of the Chicago-based Association of Condominium, Townhouse and Homeowners Associations (ACTHA). "But, while you can talk to owners, I wouldn't recommend weighing their opinions heavily, as they have no idea what's in a contract between an association and a manager. Their priorities fall more along the lines of 'will the manager call me back? Will he or she trim my shrubs?' But maybe what they're looking for, in regard to their expectations, is not appropriate for the greater community. And you're likely to find some owners to be at cross-purposes. So if you're looking for references, talk to people who serve on the boards of other associations. Each board is going to have its own priorities and its own needs, and a good management company is going to be able to cater its services to a particular client, regardless of what another association may feel is important. And those needs should be spelled out in a contract."
But for what specifically should a board look in a property manager? What traits help the aces stand out from the deck? What does the job actually entail?
"An association manager is basically a worthy adviser to a board of directors," explains Vickie Gaskill, owner of Bell-Anderson & Associates LLC in Kent, WA, a former president of the National Association of Residential Property Management, and co-author of Community Associations: A Guide to Successful Management. "Because of their experience and education, managers assist a board in making good decisions on behalf of the association. That means that the manager must be very knowledgeable in governing documents, laws of the land and general operations of the association."
And Frank Rathbun, the former vice president of communications and marketing of the national Community Associations Institute (CAI), suggests that a board look for a manager with a good deal of experience in the business. "You want someone who knows the ropes, as it's a multi-faceted job. It involves communication, working with residents, understanding of financial and even legal issues, such that you know when to contact an attorney and when that's unnecessary."
Train (not) in Vain
The best managers are likely to be those committed enough to their vocations such that they're aware of their limitations, and that they'll never truly know everything there is to know. For these motivated sorts, several organizations provide opportunities for continued education, such that they can stay averse of what's happening in their industry.
"There are a number of good trade associations," says Gaskill. "CAI is the absolute best in addressing the needs of not only the board of directors, but also at providing education for the professional property manager. And the Institute of Real Estate Management (IREM) has many community association manager members."
Rathbun mentions a few specifics:
"CAI offers numerous certifications, the baseline of which is a Certified Manager of Community Associations, or CMCA. In order to acquire this, a manager must pass an exam that shows they have the knowledge necessary to perform this job. The test is also a demonstration of experience and commitment to this profession. And it tells boards something about them; that they're not fly-by-night, 'let's give this a try' types. A board can tell that these managers are serious about their responsibilities."
Once a manager earns a CMCA, they are eligible for an Association Management Specialist designation from CAI. Then, if they want to go even further, they can attempt a Professional Community Association Manager designation, a difficult process which Rathbun describes as "the pinnacle in community management."
"It's not an easy profession," Rathbun says. "So look for those who have dedicated their time and have already made a commitment."
So you've scrutinized the credentials of myriad candidates, narrowed down the field, consulted with the board, and have made the hire that you feel is right for your association. What's next? How do you ascertain if you've made the correct decision? How do you keep up with your property manager, encourage transparency, and ensure that the relationship is working?
"The board is ultimately responsible for all of the decision making in its community," explains Rathbun. "But they need not immerse themselves in every detail. That's precisely why they hire a manager. But there should be periodic reviews; whether they occur every three months, six months or year, or it's with an individual manager or several representatives of the management company."
An important thing to keep in mind, notes Rathbun, is that a board should not save any issue for one of the aforementioned reviews. "There should never be a surprise," he says. "If a board has a problem, it should raise it as soon as it becomes aware. Talk to the manager, address the problem and formulate a resolution. And a board should also make sure to let the manager know when she has done an exceptional job. But it especially should NOT wait a month or even a year for a review just to slam somebody."
Indeed, regardless of how periodic reviews are scheduled, Lloyd asserts that the relationship between board and management should involve ongoing review. "When the manager is doing things as expected, most boards aren't going to rely on a special assessment, because they're happy," she says. "It's similar to instances where ownership doesn't show up to board meetings. It means they're satisfied."
Specific criteria by which a manager can and should be evaluated, according to Gaskill, include her timeliness in returning emails and phone calls, accuracy of financial accounting and how well she works with vendors and oversees contracts. Should a manager prove lacking in any of these areas, it may be time to reassess the relationship.
While evaluations are necessary and should be expected, the relationship between board and management tends to best succeed wherein there's a culture of mutual trust. This is why the initial vetting process is very important, and boards are encouraged not to micromanage their representative once they've hired the best one for the job.
"Boards sometimes think that a manager should be responding to them every five minutes," says Lloyd. "But why have a manager if they think they can do everything themselves? This is one of the reasons I've seen problems between manager and board; expectations are skewed and there's no proper chain of command. Some boards feel that everyone should have access to the manager, which means said manager is dealing with umpteen people in an association every day. And when different members disagree on a problem or the solution thereof, the manager is going to get conflicting information. Thus the board should go through a chain of command that ends with the president, who should be following directions from the board and never making unilateral decisions. When there are problems, people often perceive that it's the fault of management, which it may be. But often it's because they're not following a chain of command and are dealing with issues in direct conflict with one another."
This is why Rathbun advocates so strongly for hiring a manager with continued education credentials. These are people who have put in the time, are invested in the business, and have the expertise to act in an association's best interests without constant supervision. "We're talking about professionals who are not always treated thusly," he says. "Many have earned professional designations; they're responsible for million-dollar budgets and for building better communities. And what's more important to the typical homeowner than taking care of the community in which they live? Maintaining and growing property values, cultivating the nature and character of the community and meeting the expectations of the residents is an important and difficult job. Both parties must be clear in their expectations lest they end up on different pages in terms of mutual responsibilities."
Mike Odenthal is a staff writer for The New Jersey Cooperator and other publications.