My Job or Yours? Confusion Can Arise Over Roles of Manager, Board

My Job or Yours?

The old adage is that it takes a village to raise a child. Think about that—it takes many people, working together, to do what’s right for just one child. It’s about teamwork. The same philosophy can be applied to running a successful community association—it also takes teamwork and each member of the team has his or her own responsibility.

Management contracts typically spell out the manager’s role—taking care of the day-to-day responsibilities of a building, handling financials, contracting for services, and more. But other team members, known collectively as the board, are volunteer residents who, in some cases, can also take on some roles in managing the property.

Despite the management contract and documents that outline the board’s responsibilities, one teammate may want to do another’s job, even if it’s not his or her responsibility, while another teammate may get stuck doing the job of someone who has dropped the ball. In other words, sometimes confusion arises over the extent and limitations of a manager’s duties versus those of a community association board.

Understand Your Role

First, in order for all teammates to know their place, it’s important to actually understand the differences in the roles of the property manager and that of the board member. “The largest, and often most overlooked, difference is that the management company works for the board,” says Ian M. Gopin, president of G&G Management & Development in Needham, Massachusetts. “No decision is made by the management company without prior consent from a majority of the board or the board president. Often, this is established up front and therefore the management company isnot required to go to the board with every little detail.”

As a result, Gopin also says there must be a level of trust between the two parties. “A board member is ridinga thin line when it comes to their responsibility because they have to live with their neighbors while the management company can play the role of ‘bad cop’ so that there can be peace in the home!”

A property manager who doesn’t live on the property trusts that the board members will be his eyes and ears to report the ins-and-outs of what’sgoing on. “Nightly trash violators or dogs roaming the halls are just a couple of things that we have no way of knowing and we rely on owners to get us the information so that we may resolve it,” says Gopin.

However, while the offsite property manager must depend on the residents, and trustees, to inform him of what’s going on, the residents and trustees shouldn’t, for example, take on the responsibility to scold or warn a neighbor if a violation has occurred. On Gopin’s properties, confronting the neighbor with a warning is the job of a property manager and not the residents.

When this trust doesn’t exist, it can lead to disaster. “We recently acquired a portfolio from another company and ran into several situations where projects were being done by the trustees rather than the management company,” explains Gopin. “There was an extreme lack of trust between the trustees and the management company and the trustees felt that the management company would not be capable of managing the project effectively so they did it on their own. A year later, one particular project failed miserably and we have now been hired, hourly, to oversee the remediation of the water filtration that still hasn't been resolved, 250,000 later. The trustees are not qualified to manage a project of that magnitude but didn't feel that the fee to the management company would be warranted.”

Too Many Cooks in the Kitchen

Many in the property management industry insist that the roles of property manager and board members shouldn’t intersect, except at meetings and regularcommunication between the manager and the board.

However, Gopin says that when it comes to large special projects, the roles intersect on a daily basis. “We often supply the trustees with several issues and bids to repair the issues and they put their property manager hat on and analyze everything to ensure that their money is being spent properly. Also, most board members have a ‘real job’ and can bring several levels of expertise to the table. A great example is one where we recently attempted to acquirea loan and everything was all set but the trustees wanted to review all of the documents prior to closing and they found several issues with the docs which hindered the closing. The trustee that caught it happens to be in the financial sector and deals with banks on a daily basis.”

In Fort Collins, Colorado, Levy Consulting president Mike Levy says that one area of intersection between management and board might be on financial decisions. “The board may give the property management companylimited authority to make financial decisions provided they don’t exceed some dollar amount,” says Levy. “Some third-party contracts might be negotiated by the property management company if directed to do so by the board. It really depends on what the board ‘delegates’ to the property management company.”

But there’s another timeworn adage, “Too many cooks in the kitchen can spoil the soup,” which is hardly passé. What it means is that too many people on a project or responsibility can causeconflict—so it’s important to make sure all participants knows what’s expected of them.

“A good motto—although not always followed—is: if it ain't written down, it didn't happen,” says says Krista Capp, CPM, vice president, property management, at Hubbell Realty Company in West Des Moines, Iowa. “All real estate agreements should be bilateral contracts that are fully executed to eliminate any gray areas that could lead to litigation down the road. Boards should communicate their expectations at meetings and allow the management company to carry them out. Boards have a right to interject and vote and managers have an obligation to act accordingly and to be financially responsible. Theyare a team.”

All mottos and clichés aside, the bottom line is though that some jobs just shouldn’t be done by others. “We never prepare taxes or offer legal advice,” says Capp.

Chip Hoever, CMCA, AMS, with Somerset Management Group in Somerset, New Jersey, agrees. “Typically legal issues are referred to a lawyer or law office,” he says. “There are various legal issues that can come up, for example, disagreements with the original developer/builder, disagreements between master association and sub-association, insurance-relatedissues, collecting overdue dues and associated liens on properties, etc.”

“Managers should never make investment recommendations, legal or engineering recommendations. Leave that to the licensed professionals,” says Hoever.

Handling Conflict

So the lines have been drawn and everyone knows what’s expected of them, but it is possible to run into conflict now and then. When conflict arises between the board and managerover whose responsibility it is to carry out some task or handle some issue, there are some productive, positive ways to mediate the disagreement and get the job done.

“First, focus on the responsibilities of each person (or group) as agreed to in the original contract,” says Levy. “For example, focus on the fact that the boardis ultimately responsible for decisions and the manager is responsible for executing according to the wishes of the board. The bottom line is the manager essentially works for the board. The board, at the same time, should make sure they listen to the experiences of the manager, and appropriately weight the pros/cons of the manager’s recommendations.”

And Levy says that it is important for management to speak up without crossing lines. “Sometimes the managercan be too quiet in board meetings, just waiting for the board to make decisions and just tell the manager what to do,” says Levy. “In these situations, I recommend that the board go out of its way to make sure they ask the manager for suggestions, recommendations, and most importantly reflection on their past experiences in the particular area.”

Hopefully, when it comes to taking care of the property, everyone wants to do their job well and within its proper boundaries, for the sake of the community and its residents.

Lisa Iannucci is a freelance writer and a regular contributor to New England Condominium magazine.

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