Convenience and saving money are just a couple reasons why an association would choose to self-manage a property. Though, outside managing firms and property managers are hired and employed for good reason. The job requires collecting monthly condo fees, hiring and managing staff, responding to residents’ issues, among other expected and unexpected tasks. Before a board chooses to self manage, there are many factors to consider.
The Pros and Cons
The primary advantages of self-management are a significant expense savings for the association. “The biggest benefit I've found after working with self-managed associations is cost,” says attorney Charles T. VanderVennet, whose practice is in Arlington Heights. “However, the associations that decide to [self-manage] must really be willing to put in the time and labor that management would do for an association in order to save that money.”
Another benefit of self-management is the ability to take control over the direction and operations of the building. Often, management companies have their own set protocols for dealing with delinquencies or hiring contractors that may conflict with the needs and preferences of a particular board. “The advantage is that you are in total control,” says Angela Falzone, a property consultant at Association Advocates, Inc., a Chicago-based firm that provides residential property consultation and project facilitation services. “You don't have a person to pass the buck to so you get to know everything that's supposed to be done. However, a self-managed association will have to follow the same laws as professional managers, they can't make it up. So while you can be in total control and you can make decisions, it's still going to be based on the law and the declaration around your documents.”
The direct involvement required of self-managing boards can create very committed, aware and engaged board members presuming it is run properly and efficiently, says James Erwin, a Chicago attorney and the founding partner of Erwin & Associates, LLC. “This can create a better sense of community because board members are communicating well and often with their ownership. If a self-managed community is running well, it means they have developed a system for communicating and responding effectively with their ownership without overwhelming themselves.”
A self-managed board may be more involved with its residents, since they are neighbors who are in charge, but having an emotional involvement can be tricky. Falzone says that often it is very difficult for board members to face other owners when they are delinquent or violating the rules. As a consultant, she receives many phone calls from board members who are hesitant to fine or reprimand their neighbors. “That's very, very hard for owners to do on owners. And what we try to explain to them when I teach self-managed seminars is, use the law as the third person. This not a we and you. This is you doing your job. And the job says that I have to keep the property safe, I have to retain the value, and I have to keep it maintained. This isn't me against you, this is me doing my job. To take that personal stuff out of it is very difficult for some self-managed boards, very difficult.”