CAI-NJ June 2022 Community Trends

Top 5 FAQs for COMMUNITY ASSOCIATION MANAGERS

By Jackie Thermidor, CMCA, AMS, PCAM, President - Associa Community Management Corp. of New Jersey, AAMC

Q: What is a management company and what do they do for an association? A: A management company is engaged by a board of trustees to manage the day-to-day operations of a com mon-interest association in place of that governing body administering their own responsibilities and decisions. The range of services a management company provides can include but is not limited to financial oversight and administration on the collection of assessments, payment of association expenses, and preparation of the budget; maintenance of common grounds; vendor management; human resource administration; and governance and conflict resolution. Q: What are some steps a board should take when considering the financial health and stability of their association? A: The financial health of an association is critical to ensuring that the board of trustees can properly and reasonably administer its responsibilities. Financial man

agement is a multi-faceted approach that starts with the adoption of an operating budget where assessments are set at a level to pay for expenses that an association can expect to incur as well as building in a contingency amount for unforeseen expenses. The operating budget should be reviewed on an annu al basis and adjusted as required, including increasing maintenance fees. Once the assessment amount is set, owners should be billed at an interval that is suitable to pay their expenses promptly and take appropriate steps to collect those assessments if an owner does not pay. The board should adopt protocols to address those in arrears in a fair manner and avoid making decisions that can be perceived as arbitrary. Another step an association should take is reviewing its Reserve Study by a Reserve Specialist and incorpo rating the recommendations in the operating budget every 3-5 years, according to industry standards. This will reduce the need for emergency special assessments when a capital asset needs to be replaced. CONT I NUE S ON PAGE 20

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