THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, August 5, 1995 TAG: 9508030385
SECTION: REAL ESTATE WEEKLY PAGE: 04 EDITION: FINAL
SOURCE: BY KATHLEEN BUTLER, SPECIAL TO REAL ESTATE WEEKLY
LENGTH: Long : 113 lines
In the mid-1970s, the seeds of a relatively new development in the real estate industry took root in Hampton Roads as condominium complexes were planted throughout the region.
Condos became the buzzword of the '70s and the '80s. They offered residents all the amenities and conveniences of living in an apartment complex with the benefits of home ownership and the security of governance by a residents association.
Sometimes, residents serving on the condominium board of directors voluntarily manage the complex's finances, maintenance and legal issues. But through the years, some condominium associations have discovered that condo management is an often complicated field and have begun seeking outside help.
``People come home after working all day, and they don't want to do all the things you have to do in condo management,'' says Tim Gifford, president of Coldwell Banker Gifford Realty Inc., which has a property management division.
Brad Brady, president of Community Group Inc., a Richmond-based condominium management company, says he is seeing an increase in the number of condominium complexes that are seeking outside management assistance.
``There is a very definite trend of many self-managed associations that have come to us, and I can think of none that has gone the other way,'' Brady says. ``It's become a very specialized field that requires a specialized knowledge.''
Managing a condominium requires an understanding of accounting, budgeting, insurance, working with contractors, solving disputes between residents and supervising such maintenance routines as landscaping, roofing and paving.
``It's hard to find volunteers to bring together who have enough expertise in all these areas,'' says Brady, who for four years has taught association management courses for the Virginia Association of Realtors and across the country.
Harbour Gate owners Association Manager Barbara Everette agrees that managing all the legal and financial aspects of a condominium complex can be overwhelming. ``It's a lot for a manager to handle,'' Everette says.
Like other condominium associations, Harbour Gate has hired an outside property management firm to help.
She calls the management company her support team; they write checks, handle finances, attend association board meetings and help keep her updated on the operations of other condominiums.
Boards of directors can run into trouble if they do not understand all aspects of condominium law and of their own bylaws, says Doris Agee, owner of Agee Management Associates and a 20-year veteran of condominium association management.
``The biggest problem we have with these documents is that for the most part, the people who wrote them didn't know what they were doing,'' Agee says.
Agee was a member of the California task force that rewrote that state's condominium act. She says misunderstandings and misinformation when the bylaws were written have led many associations to re-examine their documents now.
A common problem she says, is defining which areas of the complex are designated as limited common elements - areas that serve only a few residents such as a stairway or railing.
For example, residents need to know who is responsible for maintaining icy stairways, or who pays for the hall carpeting in a building that houses only two units. But often the bylaws themselves are vague, she says.
And, she adds, the bylaws are not easy to update, because doing so typically requires a vote by residents, and many condo associations have trouble drawing residents to their meetings.
``The problem we have is getting people to vote to change the documents,'' Agee says. ``Usually just the board shows up (to meetings). Residents are not as involved. They pay their fees and figure everything is OK.''
In addition to crunching numbers, management teams say they can help prevent - or at least mitigate - disputes among residents.
Trying to collect association dues from a neighbor may put board managers in awkward positions.
``If your neighbor is not paying his fair share, it's hard to turn him in,'' Brady says. ``So communities fall behind on their collection efforts.''
By hiring an outside management team, condominium association boards make policies but do not have to enforce those policies, Gifford says.
``We're the buffer between the board of directors and the homeowners,'' Gifford says.
In addition, property management firm representatives say their experience in the industry often gives them more clout when negotiating with contractors. If a contractor does a poor job for a single condo, a few people may find out, but if a contractor does a poor job for a property management group, he will not get hired by any of the management group's properties, Brady explains.
But outside management teams may not be right for everyone, experts say. Condominium complexes of between 10 and 50 units are often too small to make hiring a management team worthwhile, Agee says.
Brady agrees. He says smaller communities are actually penalized because management firms usually do not scale back their fee since managing 10 condo units takes as much time as managing 100.
Still, Agee says small condo associations should not necessarily shy away from outside help if they think they need it. Instead, she says they should consider hiring a management firm to consult with them on a short-term, hourly fee basis.
And, she says, some association board members do make good managers.
``I've seen board presidents who are better than any managers I've known, but they are few and far between,'' she says.
Ultimately, condo associations are relatively new and, despite a few bugs, Brady says, they have been successful.
``Community associations are here to stay,'' Brady says. ``They are part of what we have learned in living together in neighborhoods. Most people live pretty well together, but you have to make sure individual rights don't interfere with the rights of your neighbors.'' ILLUSTRATION: [Cover]
CONDO QUANDRY
[Drawing by] KEN WRIGHT/Staff
by CNB