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What is a “management company,” what do they do, and how do I reach them?
A professional management company is contracted by the board of directors to properly maintain
the common areas and conduct the business affairs of the association. A management company provides
services such as: collection of assessments, oversight of subcontractors, obtaining bids for
subcontracted services, providing financial reports, as well as serving a general clearinghouse
for problem solving, communicating with property owners and the board of directors, and serving
in an advisory capacity. The management company reports directly to the board and all decisions
are made by a majority vote of the board of directors.
(Please note that services provided by a management company will depend on the individual
agreements between a community association management company and the client association.)
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What is a homeowner’s association?
It is a corporation registered with the state and managed by a duly elected board of directors.
It is governed by Chapter 720 of the Florida Statutes. Most associations are registered as nonprofit corporations.
Its purpose is to maintain all common areas and to govern the community in accordance with the provision of the
governing legal documents: declarations of covenants, conditions and restrictions (CC&R), bylaws and articles
of incorporation. The corporation is financially supported by all members of the homeowners association.
Membership is both automatic and mandatory. Most homeowner’s associations are made up of single family homes
or townhomes, or a combination thereof.
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What is a condominium?
It is a corporation registered with the state and managed by a duly elected board of directors.
It is governed by Chapter 718 of the Florida Statutes. Most associations are registered as nonprofit
corporations. Its purpose is to maintain all common areas and to govern the community in accordance
with the provision of the governing legal documents: declaration of condominium, bylaws and articles
of incorporation. The corporation is financially supported by all members of the association.
Membership is both automatic and mandatory. Most condominiums are either cat-walked buildings or
high rises, but can be almost any physical type of multi-family housing.
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What is the Board of Directors?
The Board is an elected team of unit owners charged with the governance of the association.
The powers and duties of the board include: set and collect annual assessments; use and expend
the assessments collected to operate, maintain, repair replace, modify, care for, manage and
preserve the common areas; procure, maintain and pay premiums for insurance; contract for and
discharge management of the association; amend and add to the rules and regulations governing
the use of the common areas; purchase equipment; and more.
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What are the Bylaws?
The bylaws are the guidelines for the operation of the homeowners or condominium association.
The bylaws define the duties of the various offices of the board of directors; how elections will be
handled; the terms of the directors; the memberships’ voting rights; required meetings and notices of
meetings; and the principal office of the association, as well as other specific items that are necessary
to run the association as a business.
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Are there any other rules?
In addition to the Declaration and the By-Laws, there may also be Rules and Regulations established by the Board.
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Are Board Meetings open to all residents? If so, where and when are they held?
Meeting “sunshine” laws apply when a quorum of the association’s board (and certain committees) gather to “conduct” association business. It is not necessary for voting to take place in order for business to be conducted. The Florida Condominium Act (Ch 718) provides that notice of all board meetings must be posted on the property at least 48 hours in advance (and as of July 1, must also be posted online, if the Association is at least 150 units), and are open to all unit owners. Unit owners have the right to speak at meetings of the board, with respect to all designated agenda items, although the condominium association may also adopt written reasonable rules governing the frequency, duration, and manner of unit owner statements. The By-Laws of the Association generally specify when they are held, so check your documents for details.
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What is my due/assessment?
The assessment is the periodic amount due from each owner to cover the operating
expenses of the common area or areas and to provide for reserve funds for replacement
of common facilities in future years. Your assessments are due on the first of the month
(or quarter, or semi-annually or annually as outlined in the governing docs). Statements
are typically sent for assessments as a reminder of the amount due.
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How is the amount of my dues/assessment determined?
After developer turnover of the association, it is the responsibility of the
Board of Directors to annually determine the amount of dues each member will pay
during the next year. Unless otherwise specified in your governing documents, the
Board also determines how the dues will be paid – quarterly, or monthly.
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Will my dues/assessment go up?
They say nothing is certain but death and taxes, but it’s fairly safe to say your
dues will go up, although not necessarily every year. The dues are simply the
expenses of the association split over all the unit owners. As the association’s
bills go up due to inflation and other economic factors, then the assessment will
have to increase as well to compensate.
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What happens if I do not pay my dues/assessment?
The maintenance of the Association is dependent upon timely receipt of the assessments
due from each homeowner. Late payments will result in a late charge depending on your
Association's collection's policy, as assessments are due on the first of the month of
your assessment cycle. In addition, the CC&R’s (covenants, conditions and restrictions)
generally allow the Association to charge interest, and proceed with a lien on your
property or foreclosure proceedings for nonpayment of assessments. They may also be
able to accelerate the remaining amount of the annual assessment, making the entire
budget year due in full immediately. Please remember the association has lien rights
on your property, and is effectively a “mortgage” on the property. If you don’t
pay, they have the right to foreclose.
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What expenses are paid with dues?
The annual budget of the Association states the expenses anticipated each year.
Usually the expenses provide for items such as insurance, operating and maintenance
of common facilities (such as pools, clubhouses, etc.), storm water ponds, common areas
and entrances. The funds are not used to maintain any individual home or unit.
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Who makes the decisions about association matters?
The Board of Directors determine the policies, rules & regulations involved in the
operation of the association’s business affairs. Any amendments to the governing documents
themselves, however, must be approved by a vote of the unit owners.
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What is an H06 Condominium Insurance Policy, and why do I need one?
A HO-6 policy is like a regular homeowner’s policy, but for a condominium unit, and with a lot more extras. HO-6 insurance policies cover the interior of the unit and personal property inside–commonly known as “studs in” or “walls in” coverage. Under the new
Fannie Mae (FNMA) and
FHA overhaul of condominium lending guidelines, lenders are now requiring HO-6 policies for new condo unit purchases. Sounds like common sense, but HO-6 policies weren’t always required by lenders, and many condominium unit owners were under the mistaken impression that the master condominium insurance policy covered all damage to the interior of their unit as well as damage to furniture, appliances, etc. That isn’t so. In most cases, that master insurance policy covers common areas such as the hallways, roof, basement, elevator, boiler, and common walkways, for both liability and physical damage–but not the inside of units.
