Achieving balance between board and management is vital in maintaining a healthy collective. A community run by elected representatives requires a combination of experience and professionalism—and that support is frequently provided by a hired party: the manager or management firm. In addition to handling legal, financial, and policy matters, for the residents of a condominium or cooperative, knowing which of those two pillars of leadership to address for maintenance issues or in times of emergency is a truly crucial piece of information.
The high-stakes relationship between board and management can be made immeasurably smoother and more effective by developing clear lines of dialog to complement and clarify the various functions each is entrusted with. Better communication and understanding between boards and managers not only improves the day-to-day function of a building or HOA, but it also helps to maintain and increase property values and resident morale.
Setting the Stage
The operations of a board in a condo, co-op, or HOA make the community what it is: a collective of elected volunteers serving the mutual needs and functions of their neighbors and, by extension, themselves. Board responsibilities range from drafting budgets, addressing needed maintenance and repair projects, and, in many cases, hiring a managing agent. As a hired representative, managers are meant to act in a supportive capacity to the board, carrying out their directives. They provide advice and guidance to the board in navigating practical, logistical, or legal avenues beyond the board’s expertise.
“Boards, which consist of volunteers elected by the association members or corporation shareholders, have a direct responsibility to the owners or shareholders of the property to protect the community and its physical plant,” says Jaime Sikorski, a vice president of management at Manhattan-based property management firm AKAM. “They in turn bring in a property manager to handle the day-to-day operations of the association. It’s the responsibility of management to support the board in the board’s efforts to enhance the standard of living for the residents, uphold fiscal responsibility, and execute projects and initiatives undertaken by the board on behalf of the community. Ultimately, this cohesive collaboration results in the residents benefiting from a well-run community and protecting the value of the owners’ individual investments.”
Relationships can get complex, but the thing to note is the board has final say, full stop. “[They] implement decisions, period,” says Jim Stoller, president at The Building Group, a management company based in Chicago. The board is a governing body; they establish an agenda as a collective and implement actions in accordance with their community’s bylaws.
“The board is charged with the overall financials and operations of the association, including the management thereof,” elaborates Keith Hales of Hales Property Management in Chicago. “[They] have the option to hire a management company to help oversee the general operations and financials of the building, as well as to advise on general upkeep, issues, and maintenance of the building. However, the board members should make all of the decisions on behalf of the building. Management companies will often define those topics in their management agreement to make it easier for the board to understand what their role is, versus the management company’s role.”
Riding the Line
To frame this in another way, the managing agent or company functions more as the implementation arm of the board, carrying out its decisions and rarely making their own, unless otherwise instructed. That’s not to say managers don’t have a certain level of autonomy. If a board agrees, a manager may sign contracts on behalf of the board for things like repairs and maintenance work. Their function in those scenarios, however, is largely limited to bidding out jobs and obtaining quotes from contractors, which the board will then consider before reaching a consensus and authorizing the chosen contractor to be engaged. In cases where a project is smaller or where bidding out the work would be too time consuming, managers may be cleared to hire from a pre-approved list of credible vendors without additional board involvement. Again, managers are there to provide guidance, not to run the show.
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Read More: Clear Expectations + Clear Communication = Success – The Board-Management