Bylaw enforcement Governance: Management companies are hired by homeowner associations to help keep an eye on everything from rules violations by residents to landscaping that needs fixing.

August 23, 1998|By Charles Belfoure | Charles Belfoure,SPECIAL TO THE SUN

A homeowner paints the front door a strange shade of green. The rules of the homeowners association state it's supposed to be hunter green, not lime green. That's a violation.

Another homeowner owns too large a dog for the condominium building. A violation.

In a townhouse community, the trash cans can be put out only the morning of collection. The family next door always drags them out the night before. Another violation.

Some people abide by the rules of the community. Some don't. And when they don't, homeowners associations turn to the management company, the people they pay to keep order in the community.

"We're always the third party, the bad guy, but that's a good thing because if a community doesn't enforce their covenants, it can go quickly downhill," said Don Murphy, vice president of marketing for First American Management, a firm in Columbia that specializes in managing communities.

With the number of community associations increasing by almost 6,000 annually, new homeowners and condominium associations will have to make the decision whether to hire outside management to help govern their communities or tackle the whole job themselves.

"Not everyone needs a management company, but many decide to use one," said Donna Reichle of the Community Association Institute, a professional organization that encourages the successful operation of community associations.

A development may be so small that it can handle the management itself.

"If there's very little common area to maintain, the work can be done by volunteers," said Reichle.

A community association is run by a board of directors that often tries to take on all the management duties.

"Good luck to those who think they can do it themselves," Murphy said. Instead of it being a joint effort at self management, he said, the job usually falls to one or two board members who wind up doing all the work. "It's hard to work 10 hours at a regular job, then come home and deal with your neighbors' problems."

"A professional management group," according to Jonas Brodie of Brodie Management Inc., "can collect the assessments from homeowners, do all the recordkeeping, monitor all service contracts like grass cutting and snow removal, keep insurance in force, and pay all the bills."

Often, board members don't have the experience to handle these functions.

Aside from handling the financial aspect of association management, an important role of outside management is dealing with the neighbors.

"People problems," remarked Jim Faust, chief executive officer of Comanco Inc., a management firm he founded 25 years ago. In the case of architectural violations, yard upkeep or problems with dogs, the management group deals with the offending owner instead of having neighbor pitted against neighbor.

"We take the heat instead of the neighbor," Brodie said.

A community association is the typical legal entity formed by the developers to carry out these and other functions. Membership in the association is automatic by virtue of owning a lot in the development and is specified in the deed.

Each association has a set of bylaws that govern the development. The rules can cover everything from architectural controls and landscaping to how many dogs are allowed in a unit. Every homeowner pays a fee to the association, ranging from less than $100 a quarter to several hundred dollars per month.

For many associations, the bulk of fees collected goes to a management company for its services. This is often a sore point in the eyes of the homeowner. Many question whether the fees are justified and whether the management group is worth the money.

"Everyone wants their assessment to be lower," said Greg Fabella, a board member of Montgomery Meadows in Ellicott City.

"People always ask why they pay so much. But what's the alternative? It comes down to volunteers vs. paid workers. You're going to get a better result from someone whose livelihood is based on performance."

"Management is vital; it's like pulling teeth to get volunteers to do the same work," Fabella added.

The fee is based on how much work the management group does. It could involve only the financial side of the association or architectural enforcement and maintenance as well.

Strong selling point

Besides maintaining common areas, the role of the community association is to preserve and enhance the development's property values and architectural integrity and to maintain security, according to Reichle.

A well-thought-out plan for community maintenance and governance is a strong selling point for a new development. Buyers see a well-maintained neighborhood and it can influence their buying decision.

"Many developers recently have been choosing the management group for their community associations," said Faust of Comanco. "But sometimes, it's just dumped into the lap of the association, and it has a hard time choosing a firm."

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