Mgmt.

Association Management

Managing large complex multicondominium associations requires a licensed CAM with comprehensive knowledge of statute requirements and procedures. The CAM could be independent or part of a property management firm.

Successful Association management and owner interactions require knowledge of:

Community Association Management

As stated in the Roles & Functions page of this website, "A condominium association in Florida that has more than 10 units or a budget of $100,000 or greater is required to have a property manager or management firm licensed by the Florida Department of Business and Professional Regulation."

The property manager (i.e., Community Association Manager) or management firm works at the discretion of the board. The board provides the manager or management firm with the authority to manage, but the board is not transferring responsibility for the affairs of the community.

Normally the management duties are to implement the directives of the board and to provide administrative services for the maintenance and operation of the community. These duties need to be clearly and specifically defined in the contractual agreement between the parties, whether an employment contract or a management company contract. (See examples of both below.) The manager is bound by the contract with the association and also must abide by the authority provided in the governing documents, the relevant laws, and the administrative rules.

In order to be licensed in the state of Florida, a Community Association Manager (CAM) must receive education, pass a state exam, and be competent in the following areas:

  1. Condominium Law,
  2. Procedures,
  3. Budgeting & Financial,
  4. Insurance, and
  5. Management & Maintenance.

The CAM's training and skill-set makes him/her uniquely qualified to address the complex issues associated with condominium property management.  Information on the Roles and Functions page demonstrates the wide range of knowledge and skills required.

Property Manager (CAM) Employment Agreement

Self-managed associations place additional burden on the board, where board members are required to perform some functions normally performed by a management firm (see chart below). One of the self-management functions is to interview, hire, and manage a property manager (Community Association Manager). As part of the hiring process, very specific employment terms and conditions need to be established so that the manager fully understands his/her responsibilities and authority.

Attached is a sample management employment agreement, provided by Gray Systems, Inc., that spells out typical employment terms. Before using this agreement, it should be reviewed by competent legal counsel for the parties to the agreement.

Please click on the following link: Employment Agreement Contract

Property Management Firm Agreement Requirements

Per Florida Statute 718.3025(1), No written contract between a party contracting to provide maintenance or management services and an association which contract provides for operation, maintenance, or management of a condominium association or property serving the unit owners of a condominium shall be valid or enforceable unless the contract:

(a) Specifies the services, obligations, and responsibilities of the party contracting to provide maintenance or management services to the unit owners.

(b) Specifies those costs incurred in the performance of those services, obligations, or responsibilities which are to be reimbursed by the association to the party contracting to provide maintenance or management services.

(c) Provides an indication of how often each service, obligation, or responsibility is to be performed, whether stated for each service, obligation, or responsibility or in categories thereof.

(d) Specifies a minimum number of personnel to be employed by the party contracting to provide maintenance or management services for the purpose of providing service to the association.

(e) Discloses any financial or ownership interest which the developer, if the developer is in control of the association, holds with regard to the party contracting to provide maintenance or management services.

(f) Discloses any financial or ownership interest a board member or any party providing maintenance or management services to the association holds with the contracting party.

Property Management Firm Agreement Terms

  1. If the party contracting to provide maintenance or management services fails to provide such services in accordance with the contract, the association is authorized to procure such services from some other party and shall be entitled to collect any fees or charges paid for service performed by another party from the party contracting to provide maintenance or management services.
  1. Any services or obligations not stated on the face of the contract shall be unenforceable.
  1. A party contracting to provide maintenance or management services to an association, or an officer or board member of such party, may not purchase a unit at a foreclosure sale resulting from the association’s foreclosure of association lien for unpaid assessments or take a deed in lieu of foreclosure.
  1. If 50 percent or more of the units in the condominium are owned by a party contracting to provide maintenance or management services to an association or an officer or board member of such party, the contract with the party providing maintenance or management services may be canceled by a majority vote of the unit owners other than the contracting party or an officer or board member of such party.

Property Management Firm Sample Contract

Hiring a property management company requires negotiating and executing a management contract. This contract must adhere to the above requirements, specifically defining the relationship between the association and management firm.  Attached is a sample property management contract, provided by Gray Systems, Inc., that spells out typical contract terms. With modifications, this contract can be used for virtually any type of community association. Before using this agreement, it should be reviewed by competent legal counsel for the parties to the agreement.

Please click on the following link: Property Management Contract

Management Company vs Self-Management

As stated above, Florida condominiums can be managed by a Property Management Firm or Self-Managed. In both cases the Board is ultimately responsible for management of the Association. The difference is whether the Property Management Firm or the Association employees report directly to the Board.

Advantages

Disadvantages
1.   Helps assure professional consultation, advice, guidance and management.

2.   Requires less hands-on involvement by association’s Board members.

3.   Provides a larger labor pool to meet association maintenance and administrative needs.

4.   Eliminates Board’s need to deal with staffing issues such as hiring, promotions, performance reviews, disciplinary actions, salary adjustments, bonuses, etc.

5.   Generally, provides more continuity through changes of property managers.

6.   Helps assure maintenance and administrative staff quality through broader interviewing, candidate selection and training.

7.   Takes advantage of economies of scale in payroll processing and vendor negotiations.

8.   Helps assure compliance with governing documents, Florida Statutes and government regulations.

9.   Usually provides systems and tools for managing work orders, processing rent/transfer applications, and providing community websites.

10. Better and more-professional financial and records management, generally through improved systems and controls.

 1.   Adds a monthly property management fee, staffing fees, and extra service fees which increase total cost.

2.   Reduces association income by directly receiving payment for member support/interface transactions such as delinquency notices, estoppels, transfer fees, collection fees and attorney turnover fees.

3.   Reduces Board flexibility to make decisions and control costs.

4.   Is generally more difficult for members to have their problems receive attention and get addressed. (They’re dealing with a large “impersonal” company instead of their fellow association member.)

5.   Management company is not as familiar with the property, local issues and history as a resident board member.

6.   More difficult to change property management vendors or to switch to self-management.

 

 

 

 

 

Compliance with Florida Employee-Related Laws

An article in the August 13th, 2012 publication of the Florida Sun Sentinel listed the following laws as applicable for associations that have one or more employees:

  1. Fair Labor Standards Act of 1938.  This law establishes minimum wage, overtime, record-keeping and youth employment standards. This law also prohibits wage discrimination based on sex as well as prohibits retaliation against employees who exercise their rights under this Act.
  1. Occupational Safety and Health Act of 1970.  This law establishes minimum workplace safety standards for private sector employers and prohibits retaliation against whistle-blowers.
  1. Fair Credit Reporting Act of 1970.  This law promotes the accuracy, fairness and privacy of information in the files of consumer reporting agencies. This law prohibits employers from using a third party to obtain a consumer report on an applicant or employee unless the individual gives authorization by signing a separate disclosure and consent form. This law also requires an employer to provide the applicant with a copy of the consumer report and written summary of rights before denying employment or taking any adverse action based in whole or in part on the consumer report.
  1. Employee Retirement Income Security Act of 1974.  This law establishes minimum standards for most voluntarily-established health and welfare benefit and pension plans in the private sector. This law requires employers to provide plan participants with information about plan features and funding. This law also imposes fiduciary responsibilities on those who manage and control plan assets and requires plans to establish a grievance and appeals process.
  1. Immigration Reform and Control Act of 1986. This law prohibits the employment of individuals not authorized to work in the U.S by requiring employers to verify the identity and employment eligibility of all employees.
  1. Employee Polygraph Protection Act of 1988. This law prevents employers from requiring or requesting employees to submit to  lie detector tests either for pre-employment screening or during the course of employment, with certain exceptions. This law also prohibits retaliation against an employee or applicant who refuses to take a lie detector test.
  1. Uniformed Services Employment and Reemployment Rights Act of 1994. This law protects civilian jobs and benefits for veterans and reservists. This law requires employers to re-employ returning service members in the job that they would have attained had they not been absent for military service with the same seniority, status and pay, as well as other rights and benefits determined by seniority. This law also requires employers to make reasonable efforts to accommodate a disability which has been incurred or aggravated during military service. Lastly, this law requires employers to make reasonable efforts (such as training or retraining) to enable returning service members to refresh or upgrade their skills to help them qualify for re-employment.
  1. Florida’s Minimum Wage Act. This law establishes state minimum wage standards for employees.
  1. Florida’s Unemployment Compensation Law. This law provides monetary benefits to individuals who are unemployed through no fault of their own. This law suggests that employers should establish standards of conduct for employees and implement a 90-day probationary period for new hires.
  1. Florida Health Insurance Coverage Continuation Act. This law provides employees and covered family members not covered by COBRA with a temporary extension of group health care coverage under certain circumstances.

The foregoing laws impact associations who have even just one employee. Naturally, the more employees an association has, the more government regulation to which it will be subjected. Associations with two or more employees will be subject to the National Labor Relations Act of 1935, the Immigration and Nationality Act of 1954 and the Florida’s Workers’ Compensation Law. If an association has fifteen or more employees, it will be subject to Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act of 1990 as well as the Florida Civil Rights Act of 1992.

Systems & Procedures Requirements

Human Resource Management

Professional management of Condominium Association staff requires at least the following:

  • Employee Handbook, providing information on the association's HR policies & procedures;
  • Position Descriptions listing position objectives, responsibilities, skill requirements, and job dimensions/scope;
  • Employee performance appraisal process/forms measuring quality/quantity of work, teamwork, job knowledge, initiative, interpersonal relations, health & safety compliance, communication abilities, planning & organizing, problem analysis & decision making, and dependability;
  • Merit salary-increase planning;
  • Payroll processing;
  • Time and attendance recording;
  • Staff work assignments;
  • Safety procedures/training;
  • Regular staff meetings (generally weekly); and
  • Employment interviewing/processing procedures and standardized employment application.

The Forms page of this website provides templates for many of the HR and other required forms.

Systems

Various manual or automated systems help assure smooth operation of the Association:

  • Work order processing & aging system,
  • Preventative maintenance programs/schedules,
  • Lease processing systems and tenant check-in procedures,
  • Unit sales/purchases and transfer of responsibility procedures/forms, and
  • Project management & tracking process.

Financial Procedures

Many of the Association's financial procedures are included in the Financial Policies document.  Some of the routine financial processing procedures include:

  • Invoice review, approval and posting,
  • Contract review and approval,
  • Monthly financial reporting,
  • Monthly & annual journal entry,
  • Reserve schedule spreadsheet update,
  • Generation of delinquency notices,
  • Estoppel preparation,
  • Delinquent account turnover to attorney for collection,
  • Check request,
  • Check signing,
  • Coupon book generation & mailing, and
  • Annual budgeting.

Miscellaneous Procedures

Other required standard operating procedures and policies include:

  • Owner inquiry response,
  • Unit alteration approval,
  • Property inspection process,
  • Website Policy and updating procedures,
  • Hurricane Preparedness & Recovery Plan,
  • Bulletin board notices posting procedure, and
  • Newsletter preparation and publication process.

Databases

Besides financial records, the Association is responsible for maintaining several databases including:

  • Unit owner roster, including name, address, phone number and email address;
  • Parking permits issued, including condo unit number, name(s) of occupants, drivers license information, and automobile make, model, color & registration information;
  • Approved Unit alterations (filed by unit);
  • Standard vendor list, including phone number(s), address, contact(s), etc;
  • Vendor master file of correspondence, invoices and contracts;
  • Unit damage reports and insurance claims; and
  • Unit sales and purchases.

Standards

The Association must maintain unit and limited common area alteration standards including:

  • Screen doors,
  • Window replacements,
  • hurricane shutters,
  • sound-absorbent under-laying
  • patio painting
  • patio flooring