Musical Chairs & Management Stability

management at association

To be on a board of directors for a community association is not an easy job. Yes, “job.” Although these are positions filled by volunteer owners, it is a job.

Many community associations share this job with the assistance of a professional management company and a Community Association Manager (CAM). In Illinois, a CAM must be licensed with the State of Illinois in order to manage any community over ten units. There is a code of ethics with every license, and the CAM must uphold these ethics. The main qualification of a board member is to be a member of the community by owning a unit. There is a code of ethics for board members which is defined in the ownership Declaration and the Illinois Condominium Property Act and the Common Interest Community Association Act. There is no license required to be a board member.

Even though a licensed CAM is working with the board in the management of the community, the board is the governing body of the community and has all of the authority in making decisions. It is not the CAM who makes the decisions. The CAM provides information, secures bids for services, offers knowledge, experience, and resources in assisting the board of directors in making their decisions for the overall management of the community. The CAM and the board are a team with the board always acting as the decision-making body.

So far, it is clearly stated that the board of directors is the governing body of the community association and that the CAM is part of the working team, yet not part of decision making.

Now we have a board which is entertaining bids from management companies, for the third time in 9-years. (The typical term of the management contract is 3-years). This association is 20-years old. The current board has been seated for the last 12-years, with few changes.   There have been three different management companies at this community association in 9-years, and now the board is out for bid; again.

Ask yourself: What is wrong with this picture? Why this game of musical chairs? Why is this board choosing to change management companies every 3-years? It takes at least 6-months to 1-year to become familiar with the overall needs of a community. The board and management, as a successful team, need to develop a working relationship. This too takes time.

Other questions come to mind: Does the board allow management to “do their job?” Is the management company performing in compliance with their contract and scope of services outlined? Did the board and management have a working meeting to discuss and review the day to day scope of services expected, along with the long-term goals of the board relating to the financial position of the community? Did discussion include major projects in progress or intended; how to review a contractor’s performance; and, what is expected from the contractors/vendors working with the board and management? These are only a few topics which the board and management should discuss and finalize as to the objectives of operating the overall business of the community.

Changing your management company is not a simple or easy task. It is very time-consuming. Did you sit down with your current management company/manager and discuss issues of concern before going out for bid? Most of the time this type of discussion on a regular basis offers a positive outcome, rather than at the point of frustration when the desire to play musical chairs kicks-in again. Oftentimes you will find that management does not fully understand the direction of the board. The board may have a perception that is clouded by some action, inaction or misunderstanding, and now the board might be throwing the proverbial “baby out with the bathwater.”

The point is: Before you make a change, try and work things out. It is most often easier to work with what you know than to jump into a sales presentation which may lead to a less than optimal change that offers no improvement, or is sometimes worse than what you already have.

Always communicate with your board and your management company/manager on a regular basis. If your company or the manager is not performing at the expected level, make that known. Meet. Talk. Discuss. Arrive at a conclusion that is beneficial to the management and life of your community.

Changing managing agents is sometimes necessary. There are situations when services are simply not being performed, even after several attempts to work it out. There are times when a management company needs to resign or terminate a contract for cause; lack of decision on the board’s part; harassment by owners with little or no board support of management; in-fighting of board members whereby “nothing gets done” and too many nonproductive meetings with boards for hours at a time; finger-pointing and ongoing statements of displeasure with management as well as other vendors, etc. The successful management of any community is a team effort. The board and management have to work together toward a common goal for the whole of the community. Everyone has their role. Everyone has their “job.”

Playing musical chairs with management companies or managers is not always the best avenue for success. When one plays musical chairs, there is always one less chair than players, leaving one person out. Don’t fall short of getting your seat and spend more time trying to find a chair. Sit down with the chair you have first, and you may find this works well for all!

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