Owning a condo is not the same as renting an apartment.
Thank you, Captain Obvious.
But we feel it needs to be said, because we have seen time and time again that new condo owners expect that condo living will be the same as apartment living, except for the fact that they own the unit and can eventually pay off the mortgage and live rent-free. While that part is true, there is a lot more to condo living than just a mortgage. One of those differences is how the community is managed.
New condo owners may see that the community association has a management company, and assume that it’s the same as the management company that ran their apartment building. Not true. There are some pretty big differences between community association management companies and property management companies. Let’s take a look:
What is a Property Management Company?
A Property Management Company works for a homeowner or landlord. Property Management Companies can run entire apartment complexes, or they can manage single units or homes for an investment owner. The Property Management company’s job is to keep the units filled, collect the rents for the owner, enforce the owner’s rules, maintain the property, and manage the day-to-day operations of the property.
In practice, that means that the property management company is involved in every aspect of apartment living. They checked your credit before you could move in, they collected your rent, and they were the first call you make when anything went wrong in your apartment. Got bugs? Call the management company. Plumbing issues? Call the management company. Dishwasher broken down? Call the management company.
Because you, as a renter, did not own the unit you were living in, you were not responsible to maintain it, or pay when something went wrong – that was on your landlord, and their agent, the property management company (and the property managers who worked for them).
How Condo Associations Work
A condo association may look like an apartment at first blush, but legally, and in practice, it is very different.
When you buy a unit in a condo association, you are not just buying the rooms that are behind your front door. Because a condo association is member-owned, every part of the building, the grounds, and the facilities is owned by the members. That means that you, as a condo unit owner, also share part ownership of the pool, the parking lot, the elevator, the roof, etc.
All of the condo unit owners are members of the association who collectively own the property and are responsible for it. That is why you are required to pay condo assessment fees (or maintenance fees) alongside your mortgage. Your condo fees, along with those of the other unit owners, go into a collective pot that is used to maintain the property and pay for the community’s needs.
The Board of Directors are your elected representatives whose job it is to determine where association funds need to be spent and to make decisions on how best to run the association. They are guided by a set of rules called the Governing Documents, which dictate the collective expectations of the owners in how the association should be run.
The Board of Directors is made up of unpaid volunteers – unit owners who have been elected to run the community association. That is why they hire a community association management company to help them run the day-to-day operations of the community.
What is a Community Association Management Company?
A Community Association Management Company is engaged by the board of directors to run the community. Typically, this includes collecting assessments on behalf of the association, maintaining the accounting books, performing administrative tasks, managing vendors (such as landscapers and maintenance), enforcing the rules set forth in the governing documents, ensuring legal compliance, and advising the board.
The Community Association Management Company, and by extension, the community association manager, works for the board of directors on the community’s behalf. As the Board’s agent, the management company does what has been laid out in our contract by the board, and we get paid based on the terms of that contract.
While the management company can make some decisions allowed by the board, we are, at the end of the day, an agent of the board of directors – following the rules set forth by the board, and beholden to the board’s decisions. When you get a letter from your management company, that communication was sent at the direction of your association’s board.
As a homeowner in the condo association, your interactions with the management company may be limited to receiving invoices for assessments, making maintenance requests or receiving citations for violating the association’s rules. However, behind the scenes, your management company is constantly working as an agent for the community. Any vendors you see throughout the property, any work being done, any payments being made, have probably gone through and been managed by your management company.
How Does This Affect Me as a Condo Unit Owner?
Now that you own your condo, you have more responsibility inside the unit itself, although there are still areas where the management company can step in for you. The lengthy governing documents, often written in legalize, will determine the maintenance responsibilities of owners vs. the Association. We recommend that Condo Associations develop a “Maintenance Matrix”, an easy-to-read chart explaining if the unit owner or the Association is responsible for each aspect of the Unit and community.
The rules typically define that you are responsible for your unit from the walls-in. That means that anything that happens inside your unit, such as your wall getting a hole in it, or your water heater failing and flooding the unit, or your refrigerator breaking is your responsibility. Your management companies may provide a list of approved vendors to work in your unit to make repairs, but even then, any repairs or cleanup would be your financial responsibility.
So if you have a problem inside your condominium unit, don’t call the management company. Chances are if you do, you will find out that the responsibility falls on you. Welcome to the joys of homeownership.
Conversely, anything that happens outside of the walls of your unit may be the responsibility of the community association (remember, that’s you too since you own a share in the entire property.) That means the association may be responsible and will pay for repairs or cleanup out of the assessment fees they collect from all the owners (this may also cause an increase in the next year’s assessments). Common examples of repairs that fall under the walls-out clause would be plumbing issues that originate in the common pipes in the walls between units, holes in the walls in the hallway outside your unit, or damage to the roof that affects all units in the building.
If you have an issue that affects your unit but originates outside of the walls, you should call your community association management company to address the issue but please know it may still be your responsibility to resolve. For example, if you have water coming into your unit from the unit above, as a homeowner, it is your responsibility to work with your neighbor to resolve the issue between neighbors, but if it is coming from a common pipe used by all, then the Association would resolve the issue
Your community association management company may carry some similarities to your old apartment’s property management company, but it is helpful to understand the differences to smooth your transition into condo life.
We are always happy to answer any questions our homeowners have about the responsibility split, or what we can do for you. Feel free to contact us!