Condo Media - April 2017 - 28

KNOW YOUR LIMITS
In this era of instant access to
information about everything via the
internet, it is easy for unit owners to fall
prey to the DIY philosophy. There are
endless instructional videos posted by
anyone and everyone showing how to
do everything yourself.
Sometimes members of the boards
of self-managed associations approach governing the community with
a similar mindset. They erroneously
believe that self-management is "Do
It Yourself." This could not be further
from the truth. Self-managed communities must guard against thinking that they must figure things out
on their own or reinvent the wheel.
Property management is a multifaceted endeavor that requires discrete
knowledge of accounting, finance,
communication, insurance, maintenance, law, and governance, as well as
an overall understanding of the gestalt
of the community and its unit owners
and residents.
Self-management means that the
board, rather than delegating the job of
operating the community to a professional management firm or property
manager, takes on the responsibility of managing the operations of the
community in addition to establishing
policy and governing the association.

Although the success of a self-managed
community requires the hard work,
energy, and commitment of its board
members, it also means recognizing
one's limitations and using good judgment in making decisions that are in the
best interests of the community, including utilizing outside experts.
UNDERSTANDING THE CC&RS
The self-managed board must understand their condominium documents.
The trustees are charged with serving
the unit owners, as the beneficiaries
of the trust. Each board does have
decision-making power but under very
specific authority, as well as responsibilities under its particular set of
Covenants, Conditions & Restrictions
(CC&Rs).
There are also municipal, state, and
federal laws and regulations that impose standards and prescribe methodology for governance and operation of
the community. Boards have a fiduciary
duty that requires acting in a manner that will maintain, enhance, and
preserve the community while staying
within the limitations of these laws.
Beyond the documents, local, state
and federal regulations, the board of
trustees has certain duties imposed by
common or statutory law. The law of
agency requires loyalty, care, obedience,
accounting, and disclosure. The duty
of loyalty requires the board members
to put the interests of the association
of unit owners first, above his/her own
interests. The duty of care requires that
trustees exercise a reasonable degree
of skill in all their actions. The duty of
obedience requires that the board carry
out, in good faith, the actions that re-

spect the desires of the unit owners. The
duty of accounting requires the trustees
to accurately report on the status of all
funds received or expended on behalf
of the association. Disclosure requires
the board to keep the unit owners fully
informed of all material facts regarding
the management of the property.
Self-managed boards should consult
with legal counsel to ensure that their
actions are in line with these guidelines
in governance of their community.
UTILIZING RESOURCES
As volunteers, it is unlikely that the
trustees will have the expertise to fulfill
these responsibilities without input
from industry professionals. Each
board is expected to use "good business
judgment" in governing the community.
That means that the trustees must recognize their limitations and understand
the importance of the guidance of an
expert with comprehensive experience
to serve as its consultant. The board
can reach out to an attorney for legal
advice, seek financial guidance from an
accountant or auditor, review risk management, policy coverage and building
limits with an insurance agent or insurance carrier risk management specialist, plan construction projects with an
engineer, and obtain other specialty
services from industry consultants.
In the self-managed association, with
no property management company to
provide operational input, it is especially important to utilize the resources
available from outside experts and contractors rather than depending upon
YouTube videos or non-credentialed
community members. Community Associations Institute (CAI) provides sup-

In the self-managed association, with no
property management company to provide
operational input, it is especially important
to utilize the resources available from outside
experts and contractors.
28

CONDOMEDIA

Condo Media - April 2017

Table of Contents for the Digital Edition of Condo Media - April 2017