In my capacity as an active industry participant I go to a lot of conferences, seminars, board meetings and I’ve read hundreds of articles about how to best manage and govern a community association. It has almost become a cliché to state that communication is the most important aspect in managing an association.
While I don’t disagree, I also believe that accurate data is just as important, and is a commodity that is sorely lacking.
Because this industry is fluid, transitory, and dynamic; boards of directors and management companies are likely to have a lot of bad data on file regarding the the status of their associations; specifically rosters of owners with proper addresses phone numbers & contact information, aging of accounts, status of occupants (are they renters or owners), mortgage registries and even ownership of properties.
Are unit owners in bankruptcy? Are units in probate? Yes, I have seen situations where management and boards have not been advised that an owner has passed away, and what the status of that property is.
So how do managers and board of directors know what is what, who is who, and obtain all the pertinent information to keep operations running smoothly? The first thing to know is what information is necessary, and the second thing is to find it and, most importantly, to have a policy to keep it current. This is important not only for community association collections but for good community governance as a whole.
So how do managers and board of directors know what is what, who is who?
What Every Association Needs to Know:
- The most important data set is a roster of the owners of the association and all their up-to-date contact information.
- A bank mortgage registry. What banks have mortgages on the units (if any) and how much are these first mortgage loans for.
- How much equity is there in each unit?
- Who is the holder of the certificate of title of each unit in your association?
- Has the unit owner filed for bankruptcy?
- Is the unit owner alive or deceased and is the property in probate or not?
- Foreclosure information on a unit and a case history of where this action is at.
- Is the resident in the unit an owner or a renter?
- Is there a squatter in the unit and is that person seeking “adverse possession”? (yes, it happens).
- Have the taxes been paid by the owners and are there tax lien or tax deed activity going on.
- The aging of the accounts receivable. And are your ledgers accurate with all late fees, late interest, fines and violations properly applied?
Most of this information is available on the public records and is obtainable. Some information requires an investigation of information that is out there but is not easily found. A lot of this information requires a serious survey by the association’s management, be it self-managed association or one with a management company.
Once this information is gathered it needs to be analyzed so that the significance of these data points are apparent. A policy needs to be established that states clearly what data the board wants to have and keep fresh, the methodology on how it is obtained, how often is it refreshed, how it is kept, who has access to it, and who is tasked to maintain this policy.
Rest assured that possessing this information is NOT a violation of privacy rights. It is most certainly the right of the community association to have it. Not knowing what is what, who is who, and where everything is puts your association in harm’s way.
Yes, it’s a good thing to communicate well with everybody and be transparent about all the dealings in a community association, but you cannot do it properly if the board of directors and management are working in the dark.
Good communication depends on having the fact pattern right and that requires that the board and management have a handle on the property they are governing.