By Ashley Dietz Gray / Published March 2022
If you are on the board of a self-managed association, the discussion of remaining self-managed (even if the board hires a manager) versus hiring a professional management company has likely come up with your fellow board members. Over the past few years there has been an increase in self-managed associations transitioning to professional management. The primary reasons cited by the associations that have made the changes have been as follows:
Let’s look at each of these areas in more detail.
Recent project failure is one of the primary motivators for self-managed associations to consider professional management. Self-managed boards regularly realize they may have avoided major time and cost overruns, scope of work errors, poor contractor selection, or other issues if they had better guidance and oversight from a management company.
By hiring a professional management company, the board is relieved of employer/personnel burden and the task of service vendor selection and supervision. Additionally, there are cost savings to the association in the selection of vendors. Many large management companies have relationships with vendors in all fields of maintenance to whom they give a great volume of business. Many times, they can secure substantial discounts which are passed on to the association due to the volume of business the management company is overseeing with that vendor. The management company will only recommend experienced, proven vendors—people who have earned their respect and who have a good track record with the management company at other associations.
Another primary motivator to consider professional management is personnel issues. In a self-managed community, the board becomes an employer and must deal with the resulting personnel issues including staffing levels, performance, accountability, and responsiveness. A self-managed board may have difficulty finding and retaining the appropriate combinations of skill and experience in employees to coincide with the existing budget. There are also additional costs incurred due to the need for replacement employees because of illness, vacations, and disruptions resulting from unexpected terminations. Management companies are better qualified to hire, train, develop, and when required, terminate employees than a volunteer board.
A management company can implement procedures and systems to streamline operations and ensure accountability, customer service, and proper maintenance of the building common areas and infrastructure. Also available is a depth of personnel to prevent disruption of service because any one person is not available.
Operational inefficiencies may be costing a self-managed association more than initially thought, as well. Legacy processes that are paper-based or manual systems create bottlenecks and inefficiencies that end up costing the association. Lack of appropriate technology and reliance upon memory of key staff are also significant issues.
Some of the most common benefits for self-managed condominiums that hire professional management are the improvements in communication, efficiency in operations, and automation of previously manual processes. Self-managed condominiums don’t typically have the resources and experience to develop best practices and implement industry-specific programs. By hiring professional management, associations can benefit from process improvements, including vendor management, communications, and hurricane preparedness procedures. IT issues are also fixed much more quickly, with information being made more visible through digitization of records and costs savings being realized on insurance and other areas.
Knowing what the problems are and identifying the solutions are only part of the challenge. Most board members and property managers don’t have the expertise or scale to implement the procedures and systems described above.
A state-of-the-art management company should be able to address these challenges effectively. Leading management companies like Campbell have support teams with varied expertise available at any given time to assist the on-site manager and the board of directors or committees as needed. The support team would be available to assist the manager or board of directors in developing policies and homeowner’s handbooks and assisting in holding annual election meetings and special homeowners’ meetings, etc. This “behind the scenes” support team also assists by proactively guiding the association with preventive maintenance plans, effective front desk procedures, and enhanced financial management.
The degree of board involvement can also be an issue in some self-managed associations. Many board members do not have sufficient time to commit on a day-to-day or month-to-month basis. Alternatively, there may be board members who are too involved in day-to-day operations by micromanaging the manager on key issues. This could result in difficulty in establishing priorities due to conflicting input or taking away focus from major common area issues that impact property values.
If you let the community manager manage, then the time involvement for the board and/or their appointed committees will be less. Remember, as the board of directors, one of your main functions is to direct and advise the management comp-any. The many hours per week involved in accomplishing property tasks will be the responsibility of your new management company and its staff.
Recently, it was a pleasure to host a roundtable discussion with three presidents of condominium associations in South Florida who moved from self-management to professional management with Campbell Property Management in 2019. (For the full roundtable, visit tinyurl.com/CampbellPM).
The three high-rises were Seagate Towers in Delray, Sky Harbour East in Fort Lauderdale, and The Carlton in Boca Raton. It was decided that two years later was a good opportunity to check in and discuss the transformation they each experienced with professional management.
The roundtable discussion covered the following topics:
All three presidents of these associations agreed that making the change from self-management to professional management was a great decision. The transition to professional management resulted in cost savings, improved vendor relations, more efficient project management, and an improved quality of life for the board members. If your board is considering making the change from self-managed to professional management, consider the items listed above to assist in the decision-making process.
Campbell Property Management
To watch the full roundtable panel discussion with the three presidents mentioned on page 145, please visit Campbell Property Management on YouTube or tinyurl.com/CampbellPM. Founded in 1953, Campbell Property Management is South Florida’s highest-rated community association management company and one of the largest and most experienced, locally owned property management companies in South Florida. With seven fully staffed offices and more than 800 full-time employees, Campbell serves more than 400 associations in Miami-Dade, Broward, Palm Beach, Martin and Port St. Lucie Counties. For more information about Campbell Property Management, call (954) 427-8770 or visit www.CampbellMGT.com.