The Condo Association: Management Company v. Self-Management
If you own a condominium in the city of Chicago, you probably are fortunate enough to have a condominium association. Some associations hire a management company for day-to-day operations while others are self-managed by an organized group of homeowners. In both cases, association dues are collected and those in the management company or in your self-managed group must oversee the budget, provide for a number of city services, and properly maintain the building.
Many buildings in Chicago that have twelve or fewer units are self-managed. If you live in such a condominium building, you will understand the question: “To self-manage or not to self-manage??
Proper Management Means Better Home Values
Lately, I have heard several horror stories where condominium owners fail to maintain the building or better yet, are nosey and fail to get along with one another. Many disputes have arisen from being angry at neighbors who play their music too loud or stomp around on hard wood floors in high heels, to a third floor unit owner letting their dog use their back deck as a bathroom (letting the waste seep down to the units below), to a top floor unit having roof problems that the rest of the condo owners oppose fixing through additional assessments. I have also heard of associations not maintaining their bank accounts or having their association charter revoked by the state of Illinois.
When you choose to self-manage, you and your neighbors no longer have to pay those association assessment fees to a third party. When setting up a self-managed condo association, make sure that you have a president as well as a treasurer. These two positions should never be the same person. Once the association is set up, from first ensuring condo owner participation to filing the proper legal documents, make sure you budget enough money for the following:
- New roof (some day down the road the roof will need to be replaced)
- Water Service
- Scavenger (if you have over four units in the building)
- Common building insurance
- General maintenance items (painting, tuck-pointing, etc)
This simple list is for smaller buildings that do not require much maintenance. Remember, potential buyers will appreciate a robust and active association that has properly maintained the building and has a decent amount of cash reserves.
When to Hire a Management Company
You might consider a management company when you find that you are arguing with your neighbors too much or you feel that the association board is treating you unfair. A management company may be able to step in and act as a mediator to your situation – but keep in mind that with a management company comes higher association dues.
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