Board of Directors and Property Management Company Responsibilities: What's the Difference?
If you own property in a condominium, townhome or single-family home community, it’s likely that your community is governed by an association. And though there are many types of associations – homeowners, condominium or cooperative – the one thing they all have in common is that they are all led by a Board of Directors. The Board is generally comprised of homeowners who are elected by their peers to serve the residents of the community and make decisions that are in the best interest of the community.
Many associations will hire a professional property management company to not only carry out the decisions of the Board, but also run the day-to-day operations of the building or community. At their core, Boards and property management companies have the same goal – to do what is in the best interest of the association and the residents it serves – but their roles and responsibilities are quite different. Oftentimes, homeowners aren’t sure who is responsible for what. Below is a brief overview of each of their duties.
Board Member ResponsibilitiesThe Board’s primary role is to serve as stewards of your association. This means they are responsible for setting policy, overseeing the community’s common areas and making decisions on behalf of the association and its members. These decisions may include appointing committees to carry out special functions and selecting professionals who will work with the association, such as lawyers and insurance agents.
The Board is also responsible for handling the association’s business affairs, which comes with fiduciary duties such as developing and approving the annual budget, establishing fiscal policy, and making sound financial decisions on behalf of the association. As the governing body of the association, the Board must also ensure that the association’s governing documents are being enforced. Governing documents include rules and policies designed to protect the community’s property values, enhance the quality of life of its residents and make it a desirable place to live. The Board is authorized to take legal action against owners who do not comply.
Property Management Company ResponsibilitiesProperty management companies are typically hired to implement and execute the decisions of the Board, carry out and enforce its policies and rules and oversee the day-to-day functions of running the community. This can include the maintenance and repair of common areas, equipment and systems, and other business functions such as finance, governance, compliance and resident communications. The management company also provides dedicated service and care to its residents. It is up to the management company to ensure that these tasks are accomplished in accordance with the association’s budget, available financial resources, and of course, the directives of the Board.
It bears repeating that the rules and policies that govern your building or community are set by your association, not your property or community association management company. This is sometimes a source of confusion for homeowners, who believe that the management company sets its own agenda for community rule enforcement, and determines penalties for non-compliance. This is simply not the case. It is the association that makes the rules, decides the penalties for violations and then hires the management company to administer them if homeowners do not comply.
Association living always comes with its share of rules and restrictions, but ultimately these rules are designed to ensure the best possibly quality of life for current and future residents. This will always be the priority of an association Board, but in order to ensure that, the property management company will do what must be done to optimize service, increase property values and enhance the lifestyle of the residents. It is only when the two entities work closely together that they can create a well-run, harmonious community that you’ll be proud to call home.
For more information on how a property management company can assist your association, contact FirstService Residential.