As the name implies, a self-managed condo is a condominium association that chooses to manage itself without the cost or use of an outside property management firm. Self managed condos face unique challenges by not having a third party property manager involved in the day to day business dealing of the association. Some of these challenges are simple and others require the Board of the self managed condo to be particularly savvy in their business and interpersonal skills. It is one thing when a neighbor gets a fine from a property manager; quite another when the fine comes from the Board member who lives next door. In this article, we’ll examine several of the benefits and drawbacks of living and serving on the Board of a self managed condo.
Pros of Self Managed Condos
Lower monthly costs in the form of decreased common fees. Property managers do not work for free. Depending on the size of the property and the level of services required, monthly property management fees can account for a significant portion of the monthly common fees associated with any common interest community. Self managed condominiums save their residents these fees by assuming the duties that the property management firm is contracted for in managed condominiums.
Tighter control of condominium association assets. Self managed condos do not rely on a third party to manage their finances. Typically, the Treasurer becomes the association’s banker and is tasked with keeping records of income and expenses as well as managing the financial reserve fund of the self managed condo. Tighter control of the self managed condo’s monies often brings greater peace of mind to residents.
Full control of Condo Board Meetings and Agenda. Self managed condos set their own agendas when it comes to issues of governance. There is no property manager directing the Board’s activity at meetings. This requires the Board members to be better trained and able to handle the correct methods of community association governance which often results in a better run community. The community’s only leaders come from within. There is no external management component.
Cons of Self Managed Condos
Completely volunteer managers. While this seems a simple enough concept, Property Managers that have completed certification through CAI’s prestigious NBC-CAM program are professionals with specific experience at running community associations. Volunteers who mean well but are untrained can absolutely damage the condo living experience for residents. Lack of training can actually cost self managed condo residents more in the long run if that lack of training causes the association to experience financial pitfalls that might have been avoided with a professional manager.
No second set of eyes on the books. Believe it or not, having a professional property management firm manage association finances can actually help protect the association’s finances better than just having the Association Treasurer handle the banking alone. Additionally, if the management company is bonded and insured, the association’s assets may actually be safer in the hands of a third party.
Compliance with state law. Depending on the state that your self managed condo is in, you may be required to file taxes and or minutes of meetings with local and state government. Professional property managers are familiar with these requirements and routinely file these documents on behalf of their clients. As a self managed condo, a volunteer Board member, likely the Secretary, is responsible for handling these important filings.
Of course, there are other considerations a condominium should take into consideration before deciding to self manage. We hope this brief listing of pros and cons gives you food for thought before your condominium makes this important decision.
