Condo Media - June 2012 - 44

SELF-MANAGED ASSOCIATION BOARDS

by Patricia Brawley, CMCA, AMS, PCAM

THE FIGHT
Why is Our Condo Fee so High?
f all the questions a self-managed board has to answer, this is probably the most difficult. Often, it comes from homeowners at a meeting that evokes the memory of angry townspeople armed with torches and pitchforks storming Dr. Frankenstein’s castle. In any association, increasing fees due to the cost of operation and future replacements may stress the financial resources of the unit owners, causing a clamor of protest. But in the self-managed association, there is much more direct pressure on the board to keep the unit owners’ wallets as primary in the budgeting process. Because the board of a self-managed association is conducting business without the assistance of a professional property manager, it must take credit or blame for budgets directly and often personally when homeowners are not happy with the outcome. These trustees, who are already expending many personal hours working on behalf of the self-managed association, have been known to sneak out of their homes before dawn and after dark to avoid confrontations with irate neighbors over increasing condo fees. The board members themselves may even be conflicted, feeling caught between a rock and a hard place. As fiduciaries, trustees must make decisions based on their best business judgment; they must place the interests

FOR FUNDING
of the trust and its beneficiaries, the unit owners, foremost. But what happens when the board’s broader responsibilities for maintaining, preserving and enhancing the assets of the association and the individual unit-owners’ personal financial interests diverge? How does the board communicate the “big picture” to homeowners who are having trouble making ends meet? ments and building systems will lead to major financial shortfalls. Without an adequate reserve to fund future replacements, resolution of the monetary crisis will likely require a special assessment of unit owners. The association that fails to properly fund reserves should start including lottery tickets in the annual budget. Lots of them!

O

Short-Term and Long-Term Expenses
The board of a self-managed community cannot ignore its responsibility for ensuring that there is money in the short-term to pay the utility bills and funding for the long-term to replace the roofs. This means that increases in the cost of operation must be matched by increases in fees, while still keeping in mind funding for the future capital needs of the association. The board may be tempted to focus only on meeting the current expenses and ignore the long-term capital project costs that can seem overwhelming. The trustees may feel that taking a middle path by funding for capital projects each year on a short-term, “mustbe-done” basis will handle the problem. This is a strategy that is often rationalized by the “I won’t be here in 20 years” attitude. Both of these methodologies will surely lead to disaster, as failure to plan for the end of the useful life of essential common ele-

Can You Hear Me Now?
For the self-managed board, communication with unit owners is key. Inform homeowners at every opportunity, from the very beginning and throughout the budgeting process. This will prevent, or at least minimize, the shock factor when the final budget and fees are presented to the community.

Communicate Clearly, Consistently and Constantly
The more the unit owners hear about the cost of necessary expenses like contracted services, insurance and utilities, the better they will understand the need to increase fees. A presentation of the capital replacement plan by your reserve specialist at a homeowner forum or special meeting will educate your community on the need for long-term planning and funding options. A yearly recap of capital projects completed and planned in the next five years at each annual meeting will keep this program fresh in the minds of unit owners.

44

CONDO MEDIA • JUNE 2012



Condo Media - June 2012

Table of Contents for the Digital Edition of Condo Media - June 2012

Condo Media - June 2012
Contents
From the CED’s Desk
Editorial Board
CAI News
CAI Regional News
Asked & Answered
Homeowner’s Corner
Finance
Green Monster
Vendor Spotlight
Energy
Maintenance
Legal
Self-Managed Association Boards
Volunteer Spotlight
Advertisers Index
Classified Service Directory
Condo Media - June 2012 - Condo Media - June 2012
Condo Media - June 2012 - Cover2
Condo Media - June 2012 - Contents
Condo Media - June 2012 - From the CED’s Desk
Condo Media - June 2012 - 3
Condo Media - June 2012 - Editorial Board
Condo Media - June 2012 - 5
Condo Media - June 2012 - CAI News
Condo Media - June 2012 - 7
Condo Media - June 2012 - 8
Condo Media - June 2012 - 9
Condo Media - June 2012 - 10
Condo Media - June 2012 - 11
Condo Media - June 2012 - 12
Condo Media - June 2012 - 13
Condo Media - June 2012 - 14
Condo Media - June 2012 - 15
Condo Media - June 2012 - CAI Regional News
Condo Media - June 2012 - 17
Condo Media - June 2012 - 18
Condo Media - June 2012 - 19
Condo Media - June 2012 - 20
Condo Media - June 2012 - 21
Condo Media - June 2012 - Asked & Answered
Condo Media - June 2012 - 23
Condo Media - June 2012 - Homeowner’s Corner
Condo Media - June 2012 - 25
Condo Media - June 2012 - Finance
Condo Media - June 2012 - 27
Condo Media - June 2012 - Green Monster
Condo Media - June 2012 - 29
Condo Media - June 2012 - 30
Condo Media - June 2012 - 31
Condo Media - June 2012 - Vendor Spotlight
Condo Media - June 2012 - 33
Condo Media - June 2012 - Energy
Condo Media - June 2012 - 35
Condo Media - June 2012 - 36
Condo Media - June 2012 - 37
Condo Media - June 2012 - Maintenance
Condo Media - June 2012 - 39
Condo Media - June 2012 - 40
Condo Media - June 2012 - 41
Condo Media - June 2012 - Legal
Condo Media - June 2012 - 43
Condo Media - June 2012 - Self-Managed Association Boards
Condo Media - June 2012 - 45
Condo Media - June 2012 - Volunteer Spotlight
Condo Media - June 2012 - 47
Condo Media - June 2012 - 48
Condo Media - June 2012 - 49
Condo Media - June 2012 - 50
Condo Media - June 2012 - Classified Service Directory
Condo Media - June 2012 - 52
Condo Media - June 2012 - 53
Condo Media - June 2012 - 54
Condo Media - June 2012 - 55
Condo Media - June 2012 - 56
Condo Media - June 2012 - Cover3
Condo Media - June 2012 - Cover4
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202307
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202306
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202305
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202304
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202303
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202302
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202301
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202212
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202211
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202210
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202209
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202208
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202207
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202206
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202205
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202204
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202203
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202202
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202201
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202112
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202111
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202110
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202109
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202108
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202107
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202106
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202105
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202104
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202103
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202102
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202101
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202012
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202011
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202010
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202009
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202008
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202007
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202006
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202005
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202004
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202003
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202002
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_202001
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201912
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201911
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201911_v2
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201910
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201909
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201908
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201907
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201906
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201905
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201904
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201903
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201902
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201901
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201812
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201811
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201810
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201809
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201808
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201807
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201806
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201805
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201804
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201803
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201802
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201801
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201712
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201711
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201710
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201709
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201708
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201707
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201706
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201705
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201704
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201703
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201702
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201701
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201612
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201611
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201610
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201609
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201608
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201607
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201606
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201605
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201604
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201603
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201602
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201601
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201512
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201511
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201510
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201509
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201508
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201507
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201506
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201505
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201504
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201503
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201502
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201501
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201412
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201411
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201410
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201409
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201408
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201407
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201406
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201405
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201404
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201403
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201402
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201401
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201312
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201311
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201310
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201309
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201308
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201307
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201306
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201305
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201304
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201303
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201302
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201301
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201212
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201211
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201210
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201209
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201208
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201207
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201206
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201205
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201204
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201203
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201202
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201201
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201112
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201111
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201110
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201109
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201108
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201107
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201106
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201105
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201104
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201103
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201102
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201101
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201012
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201011
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201010
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201009
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201008
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201007
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201006
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201005
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_200904
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201003
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201002
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_201001
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_200912
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_200911
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_200910
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_200909
https://www.nxtbook.com/nxtbooks/mcneill/condomedia_200908
https://www.nxtbookmedia.com