FAQ

What is a “management company,” what do they do?
Why do I need a management company?
What are some of the reasons that I would want a management company?
What does fiduciary duty or responsibility mean?
Can you give me an example of a Fiduciary Duty?
What happens if a board member is not doing his/her Fiduciary Duty?
What are the responsibilities of a Board President?
What are the responsibilities of a Board Secretary?
What Is a Reserve Study?
How do I obtain or view a copy of my community’s financials?
How do I obtain another copy of my community’s governing documents?
What are Assessments?
How is the Board of Directors Elected?
What is the purpose of a Board of Directors and what do they do?
What is a homeowner’s association?
What are my options of communication when it comes to contacting my UNITED PROPERTIES or Board of Directors?
How does UNITED PROPERTIES handle issues and complaints?
What are Deed Restrictions?
What are the Bylaws?
What is the Board of Directors?
Are there any other rules?
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What is a “management company,” what do they do?

A management company is contracted by the Board of Directors to provide such services as: collection of assessments, supervision of subcontractors, obtaining bids for subcontracted services, providing financial statements and collection reports, as well as a general clearing house for problem solving, communications with homeowners and the Board of Directors and to serve in an advisor capacity. The management company reports directly to the Board and all decisions are made by a majority vote of the Board of Directors.

Why do I need a management company?

Different Associations need management services for different reasons and they want different types of services. A few of the main reasons most associations hire a management company is because it can be very difficult to be objective on a board and carry out their fiduciary duty. The second reason can be that the board does not have the time or resources to do all the work that needs to be done. The third reason can be that most of the time a management company can save the association money for services including insurance.

What are some of the reasons that I would want a management company?

Financial

Annual Budget and Reserve Preparation
Financial Statements and Reports
Establish and Maintain Bank Accounts
Collect and Deposit Assessment Fees
Follow up on Delinquent Accounts
Timely Review and Payment of Obligations
Maintain Individual Owner Account Records
Direct Preparation of Tax Returns
Establish Disbursement Approval Procedure with Treasurer and Board

Maintenance

Emergency 24 Hour “Hot-Line”
Develop Maintenance Specifications
Regular Property Inspections
Obtain and negotiate Bids, Proposals and Contracts
Monitor Contractors Performance

Administrative Services

General Administration of Association
Assistance to Board of Administrators
Maintain Association Files and Records
Assist with Communications and Mail outs
Owner and Resident Rosters Maintained
Rules and Regulations Enforcement
General Correspondence
Resolve Owner Problems
Legal Counsel Liaison
Membership and Board Meetings
Annual Meeting and Election
Tenant and Owner Application Approval
Insurance Review and Administration
Document Disclosure for Resale

What does fiduciary duty or responsibility mean?

Fiduciary Duty means that “The board members are bound under state law, to act within their authority, to exercise due care and to act in good faith, taking into account the association’s best interest.”

Can you give me an example of a Fiduciary Duty?

There are several that can be summarized under the following 3 headings, and if not followed, can expose the Board to a lawsuit.
One of the most common we see is if one or more board members does not give the association his/hers “Undivided Loyalty”. Undivided loyalty is the most important one for all the board members to understand. As a fiduciary, a board member cannot in any sense be in conflict with the association; he or she must act for the sole good of the association at all times.
Another common one is; “Covenants Enforcement”. It is the board members Fiduciary Duty to enforce all provisions in both the State of Michigan Condominium Act 59 of 1978, by-laws and other governing documents to ensure that they, themselves, are in absolute compliance.
The third Fiduciary Duty can be called “Business Judgment Rule”: The Business Judgment Rule imposes on boards the responsibility for understanding association operations and researching every business decision they make before acting. This includes making decisions in the best interest of the association, in a thoughtful deliberative, prudent manner and after reasonable inquiry.

What happens if a board member is not doing his/her Fiduciary Duty?

First, meet with the member that is in violation and give them information on how serious this can be to the association, work with them to make sure they understand their Fiduciary Duty. If after working with them and they do not change, then it becomes the Fiduciary Duty of the other board members to replace the offending member. This member should be dealt with according to the by-laws of the association. This can be a very difficult situation and a management company can help tremendously by being a third objective party.

What are the responsibilities of a Board President?

There are books written on this subject and some very good training, following are the highlights:

Establishing short and long term goals and priorities
Governing
The Association Spokesperson
Keeping everything organized
Working with the Board
Developing Board Members’ Abilities
Cultivation Potential Board Members
Working with Committees
Nominating Candidates
Working with Professional Managers
Working with Other Community Association Professionals
Conducting Board Meetings
Reviewing the Agenda

What are the responsibilities of a Board Secretary?

Maintaining a Membership List
Meeting Notices
Maintaining Meeting minutes
Preparing the Agenda
Taking Minutes
Writing Resolutions
Transcribing Notes
Formatting Minutes
Distributing Minutes
Letter Writing
Maintaining Association Records

What Is a Reserve Study?

A reserve study is an in-depth evaluation of a property’s physical components and an analysis of its reserve funds. Based on a thorough on-site inspection, a reserve study details anticipated replacements or repairs to common-area elements and recommends annual reserve funding to cover capital expenditures for the next 30 years.

A properly funded Reserve Plan eliminates the need of special assessments which are unfair to those that have to pay them. If an association does not have proper funding because they do not have a reserve study, current co-owners are not paying for the deprecation and when a new owner comes in, they have to pay for something that was used before they got there.

With adequate funding, maintenance gets done when it needs to be done instead of piecemeal or deferred. Conversely, the Board that does not have or follow such a plan is guilty of negligence and failing in its fiduciary duty. The implications are clear and significant and the wise Board chooses the high road.

Reserve studies give community association managers, board members and property owners assurance that future major property expenses are identified early and that a funding plan is in place to pay for those expenses.

How do I obtain or view a copy of my community’s financials?

All owners have the ability to see their account 24/7 on line from anywhere in the world. The community financials has a separate log-in that is also available 24/7 from anywhere in the world. The community financial log-in is normally provided by your board secretary, some boards all the management company to provide the code as long as the owner is in good standing.

How do I obtain another copy of my community’s governing documents?

Contact UNITED PROPERTIES utilizing any one of our contact methods outlined in the website for additional copies of your Governing Documents. If your Association has a website you may be able to view a copy of the documents there.

What are Assessments?

Assessments are routine monetary charges to all homeowner association members which go into a fund used to properly administer the affairs of the association. Some activities funded would be regular maintenance, repairs, obtaining insurance, routine administration & management of the community, maintaining an adequate Reserve Fund for major repairs and/or replacement of capital items. These funds are established through an annual budget prepared by the Board of Directors. As a member of the association, you are required to pay a share of the costs outlined in your annual budget.

How is the Board of Directors Elected?

Your Board of Directors are elected at the Association Annual Meeting. Board members generally serve two-year or three-year terms. When positions become vacant, they are normally filled during your Annual Meeting, where a ballot is distributed for the nominees who are running for a position on the Board. All votes will be counted and results announced prior to the conclusion of the meeting. Your Officer positions i.e.; President, Vice-President, Secretary, Treasurer and Director at Large are decided amongst the Board of Directors.

What is the purpose of a Board of Directors and what do they do?

The Board of Directors is the governing body of your homeowners association and is elected annually by members of the association. They have three broad areas of responsibility: financial management, day-to-day operation, and the administration of the community governing documents. Some of the main duties they are empowered to do may include, but are not limited to:

Prepare the annual budget
Collect routine assessments
Establish rules and regulations for the association
Contract for services to maintain the association including management, ground maintenance, building maintenance, etc.
Use and disburse association funds
Establish committees
Enforce the governing documents including rules and regulations
Elect officers for the association
Ensure the association has adequate insurance
Invest in your reserves for future capital improvements
Establish an architectural review committee

What is a homeowner’s association?

A homeowner association is your community’s management entity typically charged with developing community rules, enforcement and maintenance expectations. A homeowner association is set up as a legal corporation and is guided via your community’s governing documents which include, but are not limited to, Articles of Incorporation, Master Deed, By-Laws, Site Plans, and Rules and Regulations. When you purchase a home within your community, you automatically become a member of the homeowners association. Membership is mandatory and is effective from the date you purchased your home. As a member of the association, you are required to read and understand your responsibilities as a homeowner and member of the association.

What are my options of communication when it comes to contacting my UNITED PROPERTIES or Board of Directors?

Should you need to communicate directly with UNITED PROPERTIES you may call 616-965-2300 or send an e-mail thru the e-mail service link located under Contact in the website navigation. UNITED PROPERTIES generally facilitates communications to your Board of Directors thru the monthly Board Meetings. You may also put your request, issue or concern in writing to UNITED PROPERTIES, 1348 Front Ave NW, Grand Rapids, MI 49504.

How does UNITED PROPERTIES handle issues and complaints?

Issues and complaints should be submitted in writing to UNITED PROPERTIES, 1348 Front Ave NW, Grand Rapids, MI 49504. or thru the e-mail service link located under Contact in the website navigation. Complaints regarding violations of the by-laws need to be thoroughly documented, including the identity of the offending homeowner and the date of the offence. Typically, UNITED PROPERTIES will send a friendly reminder notice to the offending homeowner. Should the violation continue the offending party will be called to a hearing before the Board prior to any further action to enforce compliance.

What are Deed Restrictions?

The Deed Restrictions are the governing legal documents that set up the guidelines for the operation of the planned community as a non-profit corporation. The Deed Restrictions were recorded by the County Recorder of Deeds office in which the property is located and are included in the title to your property. Failure to abide by the Deed Restrictions can result in a fine to a homeowner by the Association or legal action.

What are the Bylaws?

The Bylaws are the guidelines for the operation of the non-profit corporation. The Bylaws define the duties of the various offices of the Board of Directors, the terms of the Directors, the membership’s voting rights, required meetings and notices of meetings, and the corporate office of the Association, as well as other specific items that are necessary to run the Association as a business.

What is the Board of Directors?

The Homeowner’s Association again is a corporation and therefore a governing body is required to oversee its business. The Board of Directors is elected by the homeowners, or as otherwise specified in the Bylaws. The limitation and restrictions of the powers of the Board of Directors is outlined in the Association governing documents.

Are there any other rules?

Most associations have developed Rules and Regulations as provided for in the Deed Restrictions and adopted by the Board of Directors. Rules are established to provide direction to the homeowners for common courtesies with regard to parking, vehicles, pets and pool use hours, etc. In addition, your Association will adopt Architectural Guidelines with procedures for submitting requests to make exterior changes to your home. Such changes may include patio covers, decks, landscaping, exterior color changes or extensive interior changes and additions. These rules and guidelines are set up to maintain the aesthetic value and integrity of the community on behalf of all owners, and hopefully protect the market value of your investment as well. Violations of these rules may result in action by the Board of Directors and a fine. In addition, if you proceed with an exterior improvement or change, without written approval of the Board of Directors, or Architectural Committee, as applicable, you will be required to remove or correct the alteration and/or be fined for the violation.

I received a violation letter, now what do you do?

Read the letter
Realize it is not personal
Evaluate the letter by asking yourself these questions:
- Is the violation still there?
- Do you have a plan to correct the violation?
- When do you plan to correct the violation?
Contact the management company and let them know the status of the violation and your plan to address the issue

Remember: The management company together with your architectural control committee and board of directors are here to help keep your neighborhood a desirable place to live. They are here to work with you.